The DEA says 18 percent of medical marijuana center owners have been convicted of felonies.
"This business seems to have an inappropriate number of people with criminal backgrounds involved as business owners," Kevin Merrill, assistant special agent in charge for the Denver field division of the DEA, said. "I would be hard-pressed to find any other business group where their members have so many criminal violations, arrests and convictions."
DEA statistics show while 8 percent of Colorado's adult population has been arrested for drug crimes, 28 percent of the medical marijuana center owners have drug histories.
The charges include 77 cases of assault, 22 burglaries, 34 cases of domestic violence, 11 rapes, 29 weapons charges and four arrests for murder, attempted murder and/or involvement in a homicide.
Those felons will be weeded out of the medical marijuana business this weekend when new rules take effect Sunday that prohibit anyone with a drug felony conviction or anyone with a felony sentence within the last five years from obtaining a medical marijuana center license in Colorado.
Businesses that sell medical marijuana have been commonly referred to as dispensaries, but the state now official calls them centers.
Matt Obrochta, owner of Burnzwell Medical Marijuana Center on Broadway in Denver, is now scrambling to figure out what to do since he received a five-year suspended sentence for possessing pot, a felony, in 1998.
Obrochta did not want to comment on his old conviction, but a representative of the medical marijuana industry agreed to speak on behalf of owners with criminal histories.
"They don't think it's fair," Sensible Colorado Executive Director Brian Vicente said. "A lot of people have been convicted of felonies or any crime and they have done their time, they've paid their debt to society and now want to move on and work in this field and aren't able to do so."
Vicente believes someone with a criminal record for marijuana may be best suited to work in the industry because it shows they have experience working with the drug.
"Many of those people the DEA arrested themselves for growing marijuana legally under Colorado law, so I don't think they're a credible source for providing information about folks who are following state law," Vicente said.
The DEA used public records, advertisements and property records to collect the names of the owners of medical marijuana centers. Then agents ran criminal background checks to gather the data.
"The DEA investigates all drug crimes and marijuana is still a schedule one and our job is to know who we are dealing with because we may come into contact with them at some time," Merrill said.
The state expects the new rules about felons along with high licensing fees and in-state residency requirements will reduce the number of medical marijuana centers in the state by about 50 percent.
There are currently 1,100 medical marijuana centers operating in Colorado, according to the Department of Revenue.
DOR Senior Director Matt Cook is leading a team of investigators for the Medical Marijuana Enforcement Division that will be conducting an "exhaustive" check of arrest records, business associations and tax returns for anyone who applies for a medical marijuana license.
"Anybody who has a prohibited conviction will not be eligible to hold a license," Cook said. "They want to make sure that the public has confidence in the people that they're doing business with and that it's not a drug cartel selling tainted medicine to them they could harm them when they ingest it."
One of Cook's biggest concerns with the new requirements is that some owners with criminal backgrounds or drug cartels may try to hide their ownership in a medical marijuana center.
"Those persons typically that would not qualify to hold a license often times try and find somebody else to front the business for them. They will fund them through very elaborate lending schemes and reap the benefits of the business," Cook said.
"It potentially may just push the true owners under the carpet behind the closed door and make it even more difficult for investigators to determine who truly owns this," Merrill said.
The most abundant supply of marijuana is Mexican-grown and is brought into and through Colorado by poly-drug trafficking organizations, according to the Office of National Drug Control Policy data in June 2008.
In March, Erie Police arrested two suspected drug runners on charges that they moved 64 pounds of marijuana between Colorado and California involving dispensaries. One suspect, Max Hernandez, owned the Denver dispensary 'Colorado Compassionate Caregivers', according to Colorado Secretary of State Records.
Hernandez and Bryan Mark Manard have been charged in Weld County with possession of marijuana and intent to distribute, both felonies.
Anyone who lies on their Colorado medical marijuana center application will be arrested and charged for filing a false instrument, Cook said.
The state application is 22 pages long and asks for bank account numbers, education and marital information.
"I don't even know what my high school diploma has to do with providing medicine to patients, but apparently it's one of the requirements," Carl Wemhoff, president of Herbal Remedies Inc. in Westminster, said.
Wemhoff says the application is so long and complicated he has taken some of his employees off of other projects to get it done.
"We've got a four-man team working day and night for three weeks to get this done. It's that involved," Wemhoff said.
Wemhoff, who does not have a criminal history, hopes to benefit from the new regulations by buying up a couple of medical marijuana centers that will be forced to shut down.
In addition to no prior felony drug convictions, there are several other automatic disqualifiers for holding a license: if you haven't paid student loans or are in arrears for your taxes or child support.
The state says any dispensary caught operating without having applied for a state license as of Aug. 1 will be prevented from ever holding a Colorado license.
Even though the change is coming over a weekend, the Department of Revenue will be open on Saturday and Sunday to accept and start processing business applications.
The first license will be issued on July 1, 2011. Until then, medical marijuana centers are allowed to operate with their application paperwork.
If you have any news tips, please e-mail 9Wants to Know Investigator Deborah Sherman at Deborah.Sherman@9NEWS.com.
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