Friday, December 9, 2022

Denver Arrests Highlight Cannabis Industry’s Legal and Financial Tightrope

Denver Arrests Highlight Cannabis Industry’s Legal and Financial Tightrope

Police in Denver have raided multiple locations of the Sweet Leaf marijuana dispensaries, arresting 13 employees, or “budtenders”. Five have since been charged with selling marijuana products over four ounces — a class 4 felony even in legalized Colorado, with a potential six-year prison sentence and $500,000 fine. A further five were charged with lesser offenses, but which still carry possible prison terms.

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America’s Often-Legal but Tightly Regulated Industry

The raids, which reportedly came after a year-long investigation, highlight the precarious legal environment Colorado’s cannabis industry inhabits. The issue is set to become even more prominent when California, the most populous state in the U.S., joins Colorado as a fully-legalized jurisdiction in a few days on January 1st, 2018.

Sweet Leaf logoEven though it’s legal to cultivate, distribute and sell cannabis products for either medical or recreational use in the state, conditions are tightly regulated.

Visitors from non-legal jurisdictions are at first surprised to see Denver’s open attitude, and branded retail outlets. However, everyone working in the industry’s supply chain follows a strict set of rules which must be obeyed to the letter at every step, at risk of penalties.

Westword reported Sweet Leaf operated 26 cultivation, processing and dispensary locations in Denver and Thornton. All Denver licenses were suspended and physical locations closed, though the company website still lists others in other locales, including Portland Oregon.

Crowdfunding Campaign and More Money Issues

Current and former Sweet Leaf employees (who are now themselves unemployed) have organized fundraising events and started a GoFundMe campaign to raise funds for their arrested colleagues’ legal defense.

The GoFundMe page presents another legal question — will the crowdfunding platform allow the campaign to continue? The company has reportedly prohibited campaigns in the past that appeared to endorse marijuana use, adult industry work, or legal abortion.

The site’s terms and conditions say GoFundMe does not allow promotion of illegal drugs or controlled substances, or pharmaceuticals and “health products” which claim benefits not verified by regulatory bodies.

However there appear to be a number of active campaigns related to marijuana issues on GoFundMe today, some of which have been running for some time.

Industry Deals With Federal, State, Local Law Clashes

Bitsonline visited Denver in October 2017 for an in-person investigation into how the industry is run and regulated. As a sponsor of the CryptoCannabis 2017 conference, we also looked at the financial oddities these legal businesses face, and whether bitcoin and other cryptocurrencies offer a viable solution.

It’s a fascinating topic whether you live in a legalized jurisdiction or not, and one that deserves more thorough examination.

Cannabis was decriminalized in Colorado in 1975 and legalized for medical and recreational use from 2012-14. However this state law often clashes with federal law, which still considers marijuana a schedule one illegal drug, and even local government regulations, which may prohibit the industry from certain areas.

As a result, dispensaries and growers often face banking challenges, with national financial institutions (such as banks, credit card companies, PayPal and even bitcoin exchanges) usually declining to serve them. Many dispensaries are forced to use cash-only, which presents logistical and security problems.

Many suggest bitcoin and cryptocurrencies as the obvious solution, but it’s not a silver bullet solution. There’s still awareness and infrastructure to build — not to mention plenty of opportunists trying to pump new cryptocurrencies specifically targeting the industry.

Is working in the legal cannabis industry worth the hassle and risk? Let’s hear your thoughts.

Images via Sweet Leaf, Pixabay

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