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A Colorado judge has declined to impose new requirements on the state’s cannabis regulator to suss out illicit-market products being sold by licensed marijuana stores.
But the ruling by 2nd Judicial District Judge Jill Dorancy – first reported by Courthouse News service – doesn’t stop a lawsuit brought in March by Mammoth Farms, the state’s largest cultivator, against Colorado’s Marijuana Enforcement Division over claims that the $1.4 billion state market is compromised by illicit product.
As MJBizDaily has reported, Mammoth Farms and its CEO, Justin Trouard, claim to have identified methods by which cannabis grown outside the state and its legally mandated track-and-trace system is entered into retail channels.
The practice is known as “inversion.”
In the company’s March lawsuit and in interviews, Mammoth and Trouard claim that regulators have been unable or unwilling to thwart an alleged “blueprint for laundering marijuana” into regulated sales channels.
As a result, Colorado’s distillate market has been “illegally taken over by synthetic THC from outside” the state, according to Mammoth’s suit.
Regulators’ failure to catch wrongdoers is subsequently causing economic distress for licensed operators who obey the law, the suit alleges.
In addition, the suit claims that the Marijuana Enforcement Division (MED) is failing to test for methylene chloride, a potentially toxic compound that’s used to extract THC from hemp.
To combat this situation, Mammoth filed a lawsuit asking that the MED be ordered to “ramp up testing for black market synthetic THC products.”
But Dorancy declined to take such action in April 30 hearing, Courthouse News Service reported.
Trouard and Mammoth are “requesting better testing, proper tracking, a better way for the state to monitor what’s going on in the marijuana industry,” Dorancy said during the hearing, according to Courthouse News Service.
But, she added, MED appears to be following its own rules.
The suit was still pending as of May 6.
Dorancy has yet to rule on a motion from the state to dismiss the suit entirely.
Sponsored cannabis industry news from MJbizdaily.com
Judge won’t force Colorado cannabis regulator to halt alleged ‘inversion’
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