A Colorado cannabis company, Mammoth Farms, has filed a lawsuit against the state’s Marijuana Enforcement Division, alleging that the agency has failed to protect consumers and prosecute bad actors in the industry. The company claims that some licensed businesses in Colorado are diverting legal marijuana to illicit markets in other states and substituting hemp-derived THC for marijuana in regulated products.
According to the lawsuit, the Marijuana Enforcement Division has ignored companies that are engaging in these practices and has instead punished whistleblowers who try to raise concerns. The company also alleges that the agency’s marijuana tracking and testing protocols are insufficient, allowing potentially dangerous products to reach consumers.
Mammoth Farms claims that some licensed companies in Colorado are using “ghost tags” to create fake inventory in the state’s tracking system, Metrc, and then labeling products as containing THC naturally derived from marijuana when they actually contain THC derived from hemp. The company also alleges that the agency failed to investigate a “ghost facility” in Moffat that was selling cannabis distillate without having the necessary equipment to extract it.
The lawsuit seeks to compel the Marijuana Enforcement Division to take action to protect consumers and licensed businesses, and to change its leadership. The agency does not comment on pending litigation.
This is not the first time that concerns have been raised about the lack of oversight in Colorado’s cannabis industry. In 2020, a report by the Colorado State Auditor found that the Marijuana Enforcement Division was not doing enough to prevent illegal activity in the industry. The report recommended that the agency improve its tracking and testing protocols, as well as its enforcement efforts.
The lawsuit filed by Mammoth Farms highlights the need for greater oversight and regulation in Colorado’s cannabis industry. As the industry continues to grow and evolve, it is essential that the state takes steps to ensure that consumers are protected and that licensed businesses are held to high standards.
