Sweet Leaf’s 26 Cannabis Licenses Suspended; Businesses Raided

Sweet Leaf’s 26 Cannabis Licenses Suspended; Businesses Raided

Denver officials this morning ordered suspension of all licenses belonging to Sweet Leaf in the state, and a search and seizure operation is currently in motion, according to city and county officials.

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December 14, 2017
CBT Staff
Legislation and regulation State by State: Colorado

UPDATE 12/15 4:11 p.m. EST: On Dec. 15, Denver Police released the affidavits and arrest warrants for 13 people arrested during Dec. 14’s crackdown on Sweet Leaf businesses in Denver. (One more person was arrested after an update from the DPD late on Dec. 14.) All the people arrested were employed as budtenders at Sweet Leaf.

Nine individuals have been charged with Distribution of marijuana of more than one ounce, a misdemeanor charge in Colorado. Their names are: Christopher Arneson, Andrea Cutrer, Ian Matthew Ferguson, Joseph Gerlick, Jonathan Sublette, Cassidy Thomas, Dana Rae Velasquez and Devin Waigand.

Additionally, four individuals were charged with Distribution of marijuana of more than four ounces, which is a felony charge. If convicted, Leeanne Henley, Krystal Mauro, Deann Miller and Stuart Walker face a prison sentence of up to two years and a $100,000 fine.

The raids were a result of an extensive sting operation over the last 12 months, which saw detectives purchase upwards of 15 ounces of cannabis in about a two-hour timeframe from the same store, and oftentimes the same budtender.

We will continue to update this story as more details become available. 

Original story posted 12/14:

Denver-based Sweet Leaf, one of the largest vertically integrated cannabis companies in Colorado, has been the subject of a multiple-license suspension, according to documents obtained by Cannabis Business Times from the Denver Department of Excise & Licenses. All 26 of its Colorado state licenses have been suspended as of Dec. 14.

The licenses in suspension include six retail marijuana store licenses; six retail marijuana cultivation facility licenses; six medical marijuana center licenses; seven medical marijuana optional premises cultivation licenses; and one medical marijuana-infused products manufacturing license, according to the suspension order.

Twelve people have been arrested in connection with the raids, according to a press release from the Denver Police Department. After a year-long criminal investigation into illegal distribution of marijuana, eight locations were targeted by the search and arrest warrants: seven in Denver and one in Aurora. The names and booking information were not immediately available as the operation and booking process are still underway.

These were the targeted locations:

• 1475 S. Acoma St., Denver

• 2647 W. 38th Ave., Denver

• 5100 W. 38th Ave., Denver

• 4400 E. Evans Ave., Denver

• 2609 Walnut St., Denver

• 4125 N. Elati St., Denver

• 7200 E. Smith Rd., Denver

• 15200 E. 6th Ave., Aurora

“The director has the authority to suspend the business license whenever we have probable cause or evidence that the licensee has willfully broken the law and that there’s emergency action that needs to take place,” said Dan Rowland, director of public affairs at Denver's Department of Excise & Licenses.

The dispensaries cannot do business while under suspension, Rowland added.

Cannabis Business Times can confirm that at least five police officers were present at the company’s 5100 W. 38th Ave. location between 12:40 p.m. and 1:20 p.m. MT. One police officer was taking video on his phone around the entire building. The police were loading contents from the dispensary into unmarked vehicles, including pick-up trucks and Jeep Grand Cherokees.

Neither Rowland nor the Denver police could comment on which specific statutes were violated, as the operation is ongoing. 

The suspension order and reports from the field, however, suggest that Sweet Leaf could be in violation of the 1-ounce per transaction policy.

Amendment 64, which legalized the adult-use of cannabis in Colorado, limits cannabis purchases to one ounce. According to the suspension order, the “Colorado Revised Statutes … makes it unlawful for any person to possess marijuana or marijuana product in excess of the amounts in Amendment 64.”

A former Sweet Leaf employee, who asked to remain anonymous, told Cannabis Business Times that Sweet Leaf had been allowing customers, allegedly referred to by the company as “loopers,” to come in multiple times a day to make 1-ounce purchases. The former employee said that “dispensary managers would ignore the loopers and tell employees to also, in order to meet sales goals.”

“We had people come in and out all day because they wanted as many transactions as possible,” the former employee said, adding that budtenders were afraid of these “loopers,” as they thought these customers were involved in the criminal drug trade and would retaliate against the budtenders personally if they were to turn the “loopers” away.

Sweet Leaf was not immediately available for comment.

Richard Martin, a medical patient who said he is registered with Sweet Leaf, echoed the former employee's experience and claimed to have witnessed the looping. He spoke with Cannabis Business Times outside Sweet Leaf’s Highlands location (5100 W. 38th Ave.) and was concerned about access to medication for himself and other patients. 

A woman at the same location who claimed to be an employee of Sweet Leaf (who declined to provide her identity) said, “[The police] have us in total communication shutdown [with the other locations].”

“Basically a suspension right now is a pause. It’s saying we’re stopping a business, putting everything on hold so the city can investigate further what’s been going on there,” Rowland said.

According to the issuance obtained by the Department of Excise and Licenses, "A hearing on the matter shall be scheduled by the Department within thirty (30) days" of the date of the order (Dec. 14). 

Rowland said this is the first marijuana business to receive a summary suspension from Denver Excise & License. 

Photo: CBT Staff