How the Feds Are Closing In on Colorado's Medical Marijuana Industry

April 2011

The state's medical marijuana dispensaries have avoided the financial inquisitions of their counterparts in places like California and Washington, but that may change with the launch of what their advocates call a federal "guerilla campaign." The IRS recently opened an audit of an unnamed local dispensary, questioning whether it's allowed to deduct business expenses, says the dispensary's attorney (Denver Post). Lawmakers' efforts have created "the most well-codified medical-marijuana regulatory system in the nation," and providers should consider it a "warning," says state Attorney General John Suthers.

The audit—a first in Colorado—is expected to set a precedent that some in the medical marijuana community see as a two-pronged federal crackdown that includes raids on growers. Surely, a letter from U.S. Attorney John Walsh to local legislators will only fuel the accusation. At issue is a House bill that proposes to "close loopholes and fix portions of the state's medical marijuana laws" (Post).

Raids are having a particular impact on Montana dispensaries, leading Rob Corry, perhaps Colorado's most respected MMJ attorney, to accuse the federal government of trying to drive marijuana "back underground" (Michigan Messenger). And it's political: "Obama said in 2009 that he would devote no resources to prosecution of medical marijuana cases, and now, here we are," Corry adds. "Some say the day is coming very quickly that they will move in to shut down every medical marijuana business in Colorado."

Meanwhile, the broader legalization movement stole the spotlight yesterday at the state Capitol, where some pro-pot activists tried to plant a rather unconventional message in connection with Sexual Assault Awareness Month: that marijuana prohibition leads to alcohol consumption, which in turn leads to rape and sexual assault (Associated Press). The demonstration provoked a clash with the Legalize 2012 campaign (CS Indy).