Cannitrol – Cannabis Control Agent

Marijuana news from around the world

Sweet Leaf case puts Colorado’s marijuana enforcement system to the test

By all appearances, Sweet Leaf Marijuana Centers was a cannabis success story.

In early December, Sweet Leaf had grown to 300 employees, brought in upward of $5 million in sales monthly, and expanded across Colorado’s Front Range with an eye on markets such as Nevada and Massachusetts.

The burgeoning cannabis chain was blowing away most of its hometown competition. On a daily basis, Sweet Leaf’s recreational shops were selling 6.75 pounds of marijuana flower — nearly four times that of a typical Denver dispensary.

Then the sweet life turned sour — and Sweet Leaf became one of the highest-profile criminal cases to emerge from the legalization of marijuana sales in Colorado. The case, which the defendants say was erroneously charged, stands for now as an example of successful enforcement by Denver and state authorities. But it also raises questions about how agencies interact on marijuana enforcement and whether authorities should have discovered the alleged misdeeds earlier.

Police and prosecutors claim Sweet Leaf reaped a substantial percentage of sales via illegitimate means: The practice of “looping,” when customers make repeated purchases of the maximum allowed marijuana in short periods of time. Several of those customers, buying in bulk, then engaged in illegal trafficking across state lines, officials alleged.

In mid-December, Denver Police Department officers capped off a year-long undercover investigation by descending upon Sweet Leaf stores, seizing assets, shuttering locations and slapping cuffs on more than a dozen budtenders.

Sweet Leaf’s owners — AJS Holdings LLC, an entity headed by Matthew Aiken, Christian Johnson and Anthony Sauro — have denied knowledge or wrongdoing, noting that the state regulations in place at the time did not prohibit the practice.

This month, Denver’s marijuana policy chief moved to strip Sweet Leaf of its two dozen-plus licenses in the city limits. And on Thursday, the state’s Marijuana Enforcement Division suspended Sweat Leaf licenses in Aurora, Federal Heights and Thornton.

The Denver ruling and the outcomes of other Sweet Leaf-related judicial matters — including civil and criminal cases and grand jury proceedings — ultimately may have far-reaching effects, industry experts say.

The cases could show that the city and state’s marijuana regulatory system worked effectively, but they also could reveal shortcomings in Colorado’s maturing legal marijuana regime.

“I know that the common refrain that you hear, at least publicly from law enforcement and regulators, is that things are going well,” said Robert A. Mikos, a Vanderbilt law professor specializing in federalism, marijuana policy and drug law. “But then you see stories like Sweet Leaf, and it gives me some pause.