Federal authorities raided VIP Cannabis in Denver, November 21, 2013. (Hyoung Chang, Denver Post file photo)
Officers remove evidence from VIP Cannabis in Denver, November 21, 2013. Federal authorities executed search warrants and seizure warrants at multiple Denver-area medical marijuana facilities, according to the U.S. Department of Justice. (Hyoung Chang, Denver Post file photo)
State regulators have moved to shut down four interconnected medical marijuana operations under scrutiny since being raided by federal agents in late November.
The businesses, some of which have had license applications pending since 2010, were sent notices of denial from the state last week and ordered not to sell or transfer any of their marijuana. They have 60 days to request a hearing to challenge the state’s determination.
The businesses include VIP Cannabis in Denver, a high-volume dispensary that reopened a few weeks after the raids — and continued to be open for business Tuesday.
Sources have told The Denver Post that federal investigators are looking at possible connections to Colombian drug cartels, which the targeted businesses and individuals have denied. None of the 10 men named as subjects have been charged in the case.
The businesses were part of a final batch of pending license applications that date as far back as summer 2010, when the state began regulating the medical marijuana industry. The businesses were allowed to operate while the state processed their licenses, and only recently have officials cleared the backlog.
Most of the alleged violations against VIP Cannabis pre-date the Nov. 21 raid, according to a copy of the notice of denial obtained by The Denver Post in an open records request.
In October 2012, a state inspector discovered multiple after-hours sales of medical marijuana, the documents show. Inspections in November 2012 and April 2013 found incomplete records and failures to track inventory, maintain proper video camera coverage or provide documentation justifying plant counts above the norm.
One additional visit after the raid, in December, uncovered more violations, including a failure to activate the state’s new mandatory inventory tracking system.
The state issued notices of denial on the following license applications, according to records:
• VIP Cannabis at 2949 W. Alameda Ave. in Denver, three related grow warehouses and the associated license of owner Carlos Solano.
• Grateful Meds in Nederland, one related grow and the associated licenses of owners David Furtado and Robert Gimenez.
• Kushism, at 2527 Federal Blvd. in Denver, and an associated grow.
• Highlands Cannabis Company at 3355 W. 38th Ave. in Denver, a related grow and the license of owner John Esmeral.
Two of the dispensaries, Kushism and Highlands Cannabis Company, have been shuttered since the Nov. 21 raids. The Nederland dispensary closed when its lease expired last month, Furtado said.
The notices — sent in the middle of last week — included orders that the businesses not sell or transfer any marijuana, effective immediately. VIP Cannabis, however, was advertising specials on Facebook over the weekend was open for business Tuesday.
Businesses may receive court orders allowing them to remain open while the process is ongoing, said Julie Postlethwait, a spokeswoman for the enforcement division. But it was not immediately clear whether VIP Cannabis had taken such a step.
After being informed VIP Cannabis was open Tuesday, Postlethwait said she would notify the agency’s investigative staff.
Denver lawyer Sean McAllister has represented Gerardo Uribe, who records show owns a grow connected to VIP Cannabis and the building that houses the dispensary.
McAllister declined to comment Tuesday on the case involving VIP and related businesses but in general said the state is providing vague allegations, making a response impossible.
“The agency is going through a sham process without due process,” he said.
Furtado said he is attempting to sell Grateful Meds and is considering either requesting a hearing or withdrawing his license application, an option for those that are issued denial notices. He also said some of the violations were either fixed or minor.
“If they can nitpick on stuff like this, they can deny every shop in the state,” he said. “Come on. Nobody is trying to commit any crimes here.”
Eric Gorski: 303-954-1971, [email protected] or twitter.com/egorski
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