{"id":8740,"date":"2019-04-02T12:56:41","date_gmt":"2019-04-02T12:56:41","guid":{"rendered":"https:\/\/www.denverpost.com\/?p=3401435"},"modified":"2019-04-02T12:56:41","modified_gmt":"2019-04-02T12:56:41","slug":"denver-company-avoids-colorado-ban-on-publicly-traded-pot-companies","status":"publish","type":"post","link":"https:\/\/cannitrol.com\/blog\/denver-company-avoids-colorado-ban-on-publicly-traded-pot-companies\/","title":{"rendered":"Denver company avoids Colorado ban on publicly traded pot companies"},"content":{"rendered":"<div id=\"wp_fb_like_button\" style=\"margin:5px 0 5px 5px;float:right;height:100px;\"><script src=\"http:\/\/connect.facebook.net\/en_US\/all.js#xfbml=1\"><\/script><fb:like href=\"https:\/\/cannitrol.com\/blog\/denver-company-avoids-colorado-ban-on-publicly-traded-pot-companies\/\" send=\"true\" layout=\"standard\" width=\"450\" show_faces=\"false\" font=\"arial\" action=\"like\" colorscheme=\"light\"><\/fb:like><\/div><div class=\"media_block\"><\/div>\n<div><img src=\"https:\/\/cannitrol.com\/blog\/\/wp-content\/uploads\/2019\/04\/denver-company-avoids-colorado-ban-on-publicly-traded-pot-companies.jpg\" class=\"ff-og-image-inserted\" \/><\/div>\n<p>As Colorado\u2019s legislature considers whether to allow publicly traded cannabis companies to operate in the state, one such company in Denver has been doing so for months.<\/p>\n<p><a href=\"https:\/\/www.denverpost.com\/2016\/05\/07\/its-a-billion-dollar-market-whether-im-here-or-not\/\">Founded in 2010<\/a> by John Fritzel, then a bankrupt former Subway franchisee, and two of his friends, MJardin has become a significant player in North America\u2019s cannabis industry. In Colorado alone, it manages 13 cultivation facilities, 14 acres of outdoor growing operations and seven dispensaries, according to a slideshow presentation it gave to investors in January that was obtained by The Denver Post.<\/p>\n<p>In mid-November, <a href=\"https:\/\/www.businesswire.com\/news\/home\/20181115005444\/en\/MJardin-Group-Begins-Trading-Canadian-Securities-Exchange\">MJardin went public<\/a> on the Canadian Securities Exchange, seemingly causing a conflict with the spirit \u2014 if not the letter \u2014 of Colorado\u2019s prohibition on publicly traded cannabis companies. There are a half-dozen mentions of the restriction in the <a href=\"https:\/\/www.colorado.gov\/pacific\/sites\/default\/files\/1%20CCR%20212-2%2001012019.pdf\">state\u2019s marijuana rulebook<\/a>.<\/p>\n<p>Jeannette Harkin, a senior vice president at MJardin, said in an email that the company consults, advises and assists in marijuana cultivation in Colorado but does not operate or own licensed marijuana businesses. MJardin \u201ccooperates fully with applicable laws and regulations,\u201d she said.<\/p>\n<p>That line between operator and consultant is thin, where it exists at all.\u00a0MJardin\u2019s seven Buddy Boy dispensary locations in Denver are <a href=\"https:\/\/www.colorado.gov\/pacific\/sites\/default\/files\/MGrow%20190301_0.pdf\">registered to<\/a> several different companies with obscure names, like TWOG-Walnut LLC and 3B-38 LLC. What those seven companies have in common is the man who holds their state marijuana license: Fritzel, the co-founder of MJardin.<\/p>\n<p><strong>RELATED:<\/strong> <a href=\"https:\/\/www.denverpost.com\/2018\/12\/27\/colorado-marijuana-tax-dollars-schools\/\">\u201cWhere\u2019s all that marijuana money?\u201d Colorado\u2019s pot dollars help schools, but maybe not as much as you think<\/a>\n<\/p>\n<p>Fritzel is currently an MJardin shareholder, Harkin says. The co-founder also holds the marijuana license for PotCo, one of MJardin\u2019s seven-acre grow facilities.<\/p>\n<p>\u201cThere\u2019s not really a black and white line there but if a publicly traded company is managing a store in the usual sense of the word, then it probably has some sort of control over the licensed entity and that would not be permitted,\u201d said Daniel Garfield, a leading cannabis attorney in Denver.<\/p>\n<p>Garfield, speaking generally about Colorado\u2019s cannabis statutes and not MJardin specifically, said publicly traded companies can make loans to cannabis operations or act as a landlord but cannot draw revenue. MJardin\u2019s presentation to investors in January touted Buddy Boy\u2019s profitability.<\/p>\n<p>In December, MJardin Chairman and CEO Rishi Gautam <a href=\"https:\/\/www.youtube.com\/watch?v=81HQjPYHOHw\">told an investment show<\/a> that as MJardin expands, it\u2019s doing so as a \u201cprincipal owner-operator\u201d of retail stores in the United States and beyond, a move that would more clearly violate Colorado statutes if done so here.<\/p>\n<p>A spokesperson for Colorado\u2019s Marijuana Enforcement Division declined to comment directly on MJardin, saying only that ownership structures for all cannabis companies are subject to evaluation. The agency routinely reviews the ownership interests and investments of licensees, the spokesperson said.<\/p>\n<p>Luke Niforatos with Smart Approaches to Marijuana, which opposes marijuana legalization, said Colorado\u2019s cannabis industry has, on many occasions, displayed a blatant disregard for the law.<\/p>\n<p>\u201cWe have called upon the Department of Revenue to punish these offenses as well as enact tougher regulations, but routinely the industry gets off scot-free,\u201d he said. \u201cIn the case of MJardin, we are renewing our call on our state\u2019s regulators to get serious and hold this industry accountable.\u201d<\/p>\n<aside class=\"related right\" \/>\n<p>MJardin\u2019s public ownership and its possible conflicts with state statute, which were <a href=\"https:\/\/www.bostonglobe.com\/metro\/2019\/03\/21\/beyond-massachusetts-states-struggle-limit-marijuana-behemoths\/iXHUbUN0Qyf0CuqZmLBb8L\/story.html\">first reported<\/a> by the Boston Globe, come at a time when the General Assembly is again trying to end the state ban on publicly traded cannabis companies, which was put in place to better monitor the owners of Colorado\u2019s cannabis businesses.<\/p>\n<p><a href=\"https:\/\/www.denverpost.com\/2019\/03\/04\/colorado-marijuana-publicly-traded-companies-bill\/\">House Bill 1090<\/a> has considerable bipartisan support and is similar to legislation that passed through the General Assembly last year before being vetoed by then-Gov. John Hickenlooper. This year\u2019s bill has the support of Gov. Jared Polis and appears to be on track toward becoming law in the coming months.<\/p>\n<p>On Wednesday, the House Appropriations Committee voted unanimously, 11-0, to pass the bill and send it to the full House. It previously passed the chamber\u2019s Finance Committee unanimously.<\/p>\n","protected":false},"excerpt":{"rendered":"<div class=\"media_block\"><\/div>\n<p>As Colorado\u2019s legislature considers whether to allow publicly traded cannabis companies to operate in the state, one such company in Denver has been doing so for months. <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[5062,52,7337,6907,7347,6811,6857,7317,6813,77,5577,9,5019,441,1,3,61,1736],"tags":[5063,2632,7338,6909,7348,6816,6859,7318,6818,2655,5580,5022,3015],"_links":{"self":[{"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/posts\/8740"}],"collection":[{"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/comments?post=8740"}],"version-history":[{"count":0,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/posts\/8740\/revisions"}],"wp:attachment":[{"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/media?parent=8740"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/categories?post=8740"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/tags?post=8740"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}