US Attorney Troyer: Colorado Legal Isn’t ‘A Shield’ For Black Market Marijuana Activity

P. Solomon Banda/AP
Investigators load marijuana plants onto a Colorado National Guard truck outside a suspected illegal grow operation in north Denver, April 14, 2016.
Photo: Marijuana Black Market Busts 1 | Denver 2016 Bust - AP
Investigators load marijuana plants onto a Colorado National Guard truck outside a suspected illegal grow operation in north Denver, April 14, 2016.

Colorado’s top federal prosecutor says his office may take legal action against licensed marijuana businesses that violate state law or use their status under state law “as a shield” while selling their product on the black market.

U.S. Attorney Bob Troyer acknowledged that until now, federal officials in Colorado have largely focused on prosecuting the people running entirely illegal marijuana grows. The operations are often concealed on federal forest land or inside houses, spurring regular complaints from local law enforcement in some parts of the state.

“Now that federal enforcement has shot down marijuana grows on federal lands, the crosshairs may appropriately shift to the public harms caused by licensed businesses and their investors, particularly those who are not complying with state law or trying to use purported state compliance as a shield,” Troyer wrote in an op-ed published late Friday.

After voters approved a constitutional amendment in 2012, Colorado became the first state to broadly allow the sale of marijuana to adults alongside its existing medical marijuana industry. State-tracked sales now total more than $1 billion per year.

The industry has only grown since, with a total of eight states and Washington, D.C., permitting adult use. Marijuana also is allowed for some form of medical use in 31 states. The trade publication Marijuana Business Daily estimates legal marijuana sales topped $5.8 billion last year in the U.S.

But pot remains illegal under federal law, and Troyer suggested even Colorado businesses operating within state law could face federal action.

“We make decisions based on safety,” Troyer said. “Sometimes compliance with state law is relevant to that, and sometimes it’s not. We do not make decisions based on labels like ‘compliance with state law.’ Labels are not relevant to us — people’s safety is.”

He did not give more detail on how a company could come under federal scrutiny.

Jacque Montgomery, a spokeswoman for Gov. John Hickenlooper, said Saturday that state officials have a solid relationship with federal partners and “share their concerns about abuses in the industry.”

“We remain committed to maintaining the integrity of the system we’ve built,” Montgomery said. “That means attentive regulatory oversight and enforcement and, where necessary, criminal enforcement against anyone who abuses our rules.”

Industry representatives also said authorities should root out those using state law to hide illegal sales. But it would be unfair to focus on state-licensed companies that do strictly follow its laws, said Kristi Kelly, executive director of the Marijuana Industry Group, a trade association.

“Targeting legal dispensaries that are doing their best to follow the letter of Colorado’s laws makes no sense without meeting with the owners and discussing their interpretation of the laws,” she said. “We would have extreme concerns about that.”

Troyer also told The Denver Post that his office plans to take action soon against a Denver-area chain of marijuana dispensaries.

He described the issue as an illegal drug-trafficking organization disguised as a legitimate business under state law. He did not name the company or provide more detail about its operations.

It’s unclear how long Troyer will remain in charge of the office. He took the post in 2016 when former U.S. Attorney John Walsh, a nominee of President Barack Obama, resigned.

Jason Dunn, a former deputy attorney general to Republican John Suthers, was nominated in June to fill the post.

Dunn’s nomination is awaiting U.S. Senate confirmation.