Sweet Leaf Marijuana Centers should be stripped of licenses after illegal sales scheme, hearing officer rules

The Sweet Leaf dispensary chain, shut down in December after a police sting, was a criminal enterprise that pocketed millions from an illicit looping scheme that allowed customers to purchase the maximum amount of marijuana multiple times in a day, a municipal hearing officer ruled.
As a result, Sweet Leaf Marijuana Centers should be stripped of its 26 retail, cultivation and manufacturing licenses, according to recommendations released Monday by Denver hearing officer Suzanne Fasing.
Sweet Leafs scheme at the very least permitted the unlawful possession by its customers and its scheme was not the action of a reasonable licensee,' she wrote. Not only did Sweet Leaf fail to take action to stop the illegal purchases, but it actively aided and abetted the illegal purchases through its looping scheme.
Ashley Kilroy, the citys director of marijuana policy will have the final say on Sweet Leafs fate, following a 10-day period for objections and a five-day period for a response. Kilroys determination could come in the next few weeks.
Officials for the city of Denver and Sweet Leaf could not be immediately reached for comment.
Sweet Leafs licenses were suspended on Dec. 14, when police raided eight Sweet Leaf facilities in Denver and Aurora following a year-long undercover investigation into illegal marijuana sales. More than a dozen arrests of budtenders and customers have been made in connection with the case.
The investigation zeroed in on alleged incidences of looping, in which Sweet Leaf budtenders would make repeated sales of up to 1 ounce of recreational marijuana the maximum allowed for individual possession under Colorado law to the same customer multiple times in a day.
Looping accounted for at least $6.7 million of medical marijuana sales in the 18-month period that ended when the stores were shut down, and at least $1.5 million in recreational marijuana sales, according to the hearing officers report.
At least half of the loopers had out-of-state IDs, Fasing wrote. She found that people from Arkansas, Nebraska, New Mexico and Texas purchased large amounts of marijuana to resell illegally in their home states. Some of those customers were convicted of criminal charges after being arrested with multiple pounds of Sweet Leaf marijuana in their possession.
Fasing heard testimony in Sweet Leafs case over several days in March and April. A central issue raised then was what constituted a transaction.
Colorados marijuana rules were amended on Jan. 1 to define a single transaction as including multiple transfers to the same consumer during the same business day where the retail marijuana store employee knows or reasonably should know that such transfer would result in that consumer possessing more than 1 ounce ...