A three-hour hearing on Thursday ended with a victory for medical marijuana advocates when El Paso County commissioners allowed a dispensary and two grow operations to remain open despite past violations.
Commissioners voted unanimously to renew licenses for the three facilities, owned by Forrest Charlesworth of New Age Medical and Humbolt Care and Wellness, and impose a two-week suspension on the license for Charlesworth's Space Village Avenue dispensary.
Charlesworth feared his enterprises would be forced out of business for what he called a clerical error after commissioners refused in May to renew another dispensary's license due to violations.
A "no" vote from county commissioners also would have shuttered his dispensary on West Garden of the Gods Road, which is served by one of the grow operations. All together, about $1.6 million in annual revenues was at stake, Charlesworth said.
"I think they made a fair and reasonable decision," said his attorney, Cliff Black, who specializes in marijuana issues.
Black presented 59 letters of support for the license renewals and a petition with more than two dozen signatures urging commissioners to keep the facilities open. The county also received three opposition letters, which he said came from disgruntled ex-employees.
Charlesworth's employees violated state law in 2014 and 2015 when they shipped medical marijuana products directly from one of the grow houses to another dispensary he owns in Edgewater. At the time, the products should have been transferred to a local dispensary before going to the Denver area center. A manager told the state's Marijuana Enforcement Division that he thought the transfers were legal because the establishments shared the same ownership.
Charlesworth agreed to pay a $10,000 fine to the division for the violations, which came to light during an investigation that began after he discovered a Denver-area employee had stolen a joint and reported the theft to authorities. Though no more product was discovered missing, some of the dispensary's inventory was improperly accounted for.
He later failed to disclose the fine on an application he filed with the county for an annual license renewal in 2016.
"You should have known as you were filling out the form that you had a judgment against you and you had fines levied against you," Commissioner Mark Waller, a former state legislator known as a marijuana industry opponent, told Charlesworth before recommending the suspension. "You should have filled that out correctly."
Ron Ainslie, an investigator with the enforcement division who was called as a witness, acknowledged that avoiding violations is "extremely difficult" for medical marijuana facilities, especially because the state-mandated record-keeping system isn't user-friendly.
"I'm going to support renewal because I do think you're doing the best you can on the system that exists here," said Commissioner Longinos Gonzalez Jr.. "But I've got to be honest, the more I learn about the marijuana industry in the state, the less faith I have in the marijuana industry in the state."
Commissioners Gonzalez, Waller and Stan VanderWerf voted in May to deny a license renewal for New Horizons dispensary on Woolsey Heights, marking the first time the board had refused a renewal for a medical marijuana facility. The owner of the shuttered center, Shane Zacher, sued the county in July arguing that the board abused its power by rejecting the application due to "minor" violations. Last year, investigators found New Horizons exceeded its plant count and had inaccurate inventory and vegetation records. Additionally, a security camera glitch prevented cameras from monitoring the sales area.
Charlesworth is finalizing the sale of eight of his licensed facilities in the Denver and Colorado Springs areas to another company, Prima Brands.
He said he plans to petition for commissioners' approval to pay a fine in lieu of serving the suspension.
Contact Rachel Riley: 636-0108