Compliance Matters

The cannabis industry has been reeling both locally and nationally following the massive raid on Sweet Leaf, a dispensary chain with locations in Colorado and Oregon. A recently released affidavit from the sting reveals more information about the major bust and why it occurred.

If the allegations of looping are true, then it is good for the legalized industry when those not following the rules are shut down.”

The Sweet Leaf businesses that were raided are currently suspended due to allegations of “looping,” or allowing the same individual to come back multiple times to purchase more than one ounce of cannabis flower per day. While looping is illegal and customers are only allowed to purchase a maximum of one ounce of flower per day, the law is considered difficult to enforce, given the fact that in a fast-paced retail environment, it is often hard to determine the transaction history of every single customer.

According to the affidavit, however, the alleged looping occurring at Sweet Leaf may have been more than run-of-the-mill returning customer purchasing attempts. The investigation first began when a man noticed suspicious activity around the 2647 W. 38th Ave. Sweet Leaf location in Denver. He noticed the same people coming in and out repeatedly, which was indicative of looping.

This led to an investigation that has been developing since November of 2016. The arrest of a convicted felon, who was purchasing pounds of cannabis at a time, gave the police even more information than what they collected through observing customers outside of the store. The employees at Sweet Leaf were allegedly encouraging customers to return to the store and make multiple purchases as long as they parked their cars off-camera and walked to and from their car to stash previously purchased product after every transaction.

Nick Richards of Dill, Dill Carr Stonbraker & Hutchings P.C. in Denver is not affiliated with the case, but is involved in local cannabis law. He feels that businesses operating illegally should rightfully be shut down.

“If the allegations of looping are true, then it is good for the legalized industry when those not following the rules are shut down,” Richards explained to CULTURE. “If true, then this type of policing is what is required under the United States Cole Memo. The Memo requires that state officials robustly enforce their state regulations. Absent [of] such enforcement, the Colorado industry would not be in compliance with federal guidelines that designate state legalize cannabis as a low priority for the United States Department of Justice.”

While the Cole Memo may now be dead, this leaves the industry even more vulnerable to federal attacks if the state is not compliant. The affidavit alleges that the practice of looping took place at multiple Sweet Leaf locations, and it also alleges that employees at these locations either seemed aware of what was going on, or they never stopped or questioned the undercover officers when they made multiple purchases. It remains to be seen what will happen regarding the individual charges that the budtenders are facing, as well as the fate of the company in general.