Colorado marijuana industry regulators under fire as underage buying checks nosedive in pandemic

On about 600 occasions in 2019, state marijuana industry regulators sent hired operatives, aged 18 to 20, into Colorado dispensaries to check that the law barring sales to people under 21 was being followed.

Then the COVID-19 pandemic hit, and in 2020 state regulators reported only 118 of those checks. Last year, the number dropped to 80. This year, the Marijuana Enforcement Division says it’s on pace for 52 checks, having completed 14 through March.

The reported compliance rate was above 95% each year, but some state lawmakers say the drop-off in total checks is alarming — and they told the division’s leaders that directly in a state Senate committee hearing late last month.

“You now have a big old spotlight on you,” said state Sen. Sonya Jaquez Lewis, a Democrat of Boulder County. “You’ve got the whole Senate looking at you now.”

“It sounds like you guys are too busy to get the work done,” said state Sen. Rhonda Fields, an Aurora Democrat. “You’re just throwing your hands up… with whatever fire that’s in your face. And some things are dropping through the cracks.”

State Sen. Barbara Kirkmeyer, a Brighton Republican, suggested the Marijuana Enforcement Division be audited by the state — something lawmakers formally requested after the hearing, and which could be approved as soon as June.

But the division’s leadership says the story is much more nuanced than can be understood by looking at the sharp drop in underage compliance checks.

In an interview with The Denver Post on Friday, Senior Director Dominique Mendiola and Deputy Director Kyle Lambert said they’ve pivoted in recent years to monitoring compliance in different ways that don’t always involve an under-21 operative.

They said that in 2021, the division’s 80 underage compliance checks were supplemented by 160 other times in which, rather than send in an operative, investigators checked that dispensaries had tools like ID scanners and working surveillance cameras. These investigators, they said, also reviewed surveillance footage to ensure compliance.

Responding to the lawmakers’ concerns, Mendiola said, “We wouldn’t categorize this as a problem.”

Added Lambert, “One tool is the underage compliance checks… and we plan on ramping back up, but we’re also employing a more comprehensive strategy.”

Data compiled by nonpartisan state budget staff shows that the division’s enforcement actions overall did not dip during the pandemic and in some categories are above and beyond 2019 numbers. Tallies of various enforcement actions related to other age-restricted products, liquor and tobacco, have also mostly recovered, if they even dipped at all.

It’s the underage compliance checks related to marijuana that appear to be the outlier. Budget staff showed that liquor compliance checks rose 72% in the state between 2020 and 2021, while marijuana checks fell by 32%.

Denver Democratic state Sen. Chris Hansen doesn’t find the Marijuana Enforcement Division’s explanation convincing. He requested the audit along with Henderson Republican Sen. Kevin Priola.

“The other enforcement divisions have come back to what looks more like a pre-pandemic level of checks. MED has not done that and they don’t seem to be on that trajectory. It’s falling even further,” Hansen said. “That, to me, is not fulfilling their mission of carefully regulating that industry.”

Hansen and Priola were disappointed when the Senate Health and Human Services Committee killed their bill, SB22-149, titled Improve Marijuana Industry Regulation. That bill sought to require at least one mandatory compliance check per dispensary, per year.

But the bill was much more ambitious than that. It sought to make public a free and searchable online database of the division’s enforcement actions; to compel the division to issue more detailed annual reports about its enforcement; to convene a rulemaking task force to, among other things, set new rules for how and when alleged license violations must be reported to dispensaries and then resolved.

In addition to a slew of other proposals, the bill originally sought a new, anonymous tipline where people could tell on dispensaries for breaking the Marijuana Enforcement Division’s rules, though that was later pulled by amendment.

During the hearing on this bill, many who opposed it noted that the marijuana industry is already subject to myriad regulations, and that the rulebook for the sector is about four times thicker than for those in the liquor business.

“We are on the receiving end of constantly changing regulations, and many inspections,” Samantha Walsh, a lobbyist representing cannabis business owners of color, told The Post.

Dispensary owner Wanda James said the bill was not only unnecessary and misguided, but likely to produce racist outcomes; she’s one of the few Black people to own a marijuana business in Colorado, and she said that enforcement will be — and already is — disproportionately levied on operators of color.

“Our data does not in any way support any assertion that we are targeting any particular category of licensees,” Mendiola told The Post. “There’s absolutely no intention” of racism.

Those in the marijuana industry also take exception to any suggestion that their political opponents are the ones looking out for children. The sponsors of SB22-149 both said they were running the bill in part because of their own experiences with their kids. Hansen said his son can easily access marijuana via Snapchat, where, he claimed, his son might see 10 sales offers a day.

Among the sponsors’ backers were advocates with Blue Rising Together, the same group that was a driving force behind HB21-1317, last year’s landmark marijuana regulation overhaul that passed overwhelmingly out of the legislature.

Dawn Reinfeld, co-founder of the group, said she is “shocked and appalled” that the Marijuana Enforcement Division has only performed 14 underage compliance checks this year. She asked lawmakers to support a more public database on the division’s enforcement activity, and said she had to file costly Colorado Open Records Act requests in order to obtain the data that would inform SB22-149.

“We need transparency,” she said. “People need to have that information without having to file CORA requests for it.”

The bill sponsors succeeded at convincing their colleagues that the enforcement division’s trend on underage compliance checks is a problem. Just before the committee voted, Jaquez Lewis called out Mark Ferrandino, director of the Department of Revenue, which oversees the division.

“I hope he’s listening,” she said. “This is unacceptable, so it needs to be fixed. It’s now on my personal radar screen.”

But she, like others, said she felt the bill was not well-targeted, and that the perceived problem could be solved without a bill. The Marijuana Enforcement Division could make changes on its own, lawmakers said, and some hope the audit goes through and reveals even more information.

Chair Joann Ginal, Democratic state senator of Fort Collins, said she wants to give the division at least another year to improve its underage compliance check numbers. The Senate committee voted 6-1 to kill the bill.

The next morning, Hansen said that his colleagues needed to answer for their votes.

“I can only conclude that the members didn’t think it was a serious problem,” he said. “I try my level best with legislation I bring to clearly identify an issue that needs attention, and to bring a solution. I think we did that with this bill.”

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