Colorado’s marijuana business owners — nearly 1,200 of them — control a quickly growing and powerful industry that is approaching $1 billion in annual sales.
Yet basic information about these entrepreneurs is not available to the public without paying hefty fees, in contrast to what is available about owners of other state-licensed businesses.
The Marijuana Enforcement Division of the Colorado Department of Revenue will disclose the names of those with ownership interests in more than 2,500 active medical and recreational marijuana licenses issued since 2014.
But the agency will not provide a list that connects owners with their businesses — information it has provided to The Denver Post in the past — or disclose the size of their ownership stakes, what kinds of marijuana licenses they hold and how many businesses they own. In response to several public information requests from The Post, the state said it would provide that information one name at a time at a cost of about $10,000.
And information about any state disciplinary actions against a marijuana business is only available by paying the state hundreds of additional dollars in fees.
“This is not supposed to be secret,” said Larisa Bolivar, executive director of Cannabis Consumers Coalition, an advocacy group. “They are giving licenses for a public business and we have a right to know who owns them.”
The same details about the owners of dozens of other state licensed industries and occupations in Colorado and any discipline meted out to them — from liquor stores and automobile dealers to acupuncturists and veterinarians — is available on request or on the state’s various websites.
For each, the public can learn — often at no cost — the name of a business owner or licensee, any infractions they allegedly committed and any penalty the state regulating authority has issued.
“There doesn’t seem to be a sound rationale in this denial of information,” said Sen. John Kefalas, D-Fort Collins. “If you can have (disclosure) for other licensees in other professions, it’s a contradiction not to do it for this.”
Revenue Director Barbara Brohl at first denied The Post’s request for the names of pot-business owners, calling them “individualized data” that were protected by law from disclosure.
“We are really required to maintain the confidentiality of … individualized data information that is provided to us by a licensee,” Brohl told The Post.
Officials eventually released a list of owner names to The Post without any additional information about them. They said their computer system does not store owners’ names matched with addresses and business names, and that courts rulings protect them from having to create a new record to fulfill such a request.
The state said it would provide ownership information on a person-by-person basis for all 1,188 people by charging $30 per hour to review each eight-page license application, blacken out information it says is protected from disclosure, and then assess a copy fee for each page.
At a half-hour per owner — the amount it took the department to process one application for The Post — the total cost would be more than $20,000.
Revenue officials later changed their estimate, saying the information The Post sought could be found on two pages of the application, cutting the time it would take to review the paperwork and copies to about $10,000.
“This makes very little sense and is hardly useful,” said Jeffrey Roberts, executive director of the Colorado Freedom of Information Coalition. “The cost is clearly prohibitive. How are journalists and the public expected to examine records and make any kind of assessment of whether a system is working or not? It’s just remarkable.”
Other states give info
Basic information on marijuana-business ownership is available free from Oregon and Washington, the other states where recreational marijuana sales are legal, spokesmen in those states confirmed.
The City of Denver provided The Post complete ownership information about each of the city’s 633 marijuana licenses within 48 hours of the paper’s request — computerized and at no cost.
A preliminary analysis of Denver’s data shows a half-dozen people control a third of the marijuana licenses issued by the city, while owning just 10 percent of the marijuana businesses there. A business can hold more than one license for various types and locations of marijuana-related operations ranging from grows to manufacturing and retail.
The state in 2013 provided The Post with a computer database of the owners behind each medical marijuana business in the state, data it says it cannot and will not provide today. The cost: $0.
Colorado regulators say a bill Gov. John Hickenlooper signed into law last year prevents them from disclosing anything more than the name of a licensed marijuana business and its owners. SB15-115 broadly amended the state’s medical marijuana laws and, regulators said, added a catch phrase that causes the secrecy.
Though each license application contains a number of personal details — an owner’s home address, phone numbers, Social Security number and date of birth among them — the law says the state may not release any “individualized data” about a licensee. That would include their answers to application questions about any criminal history or how much of an ownership stake they hold in the licensed business.
State analysis preceding the passage of the bill indicate it was to protect information such as credit-card histories and personal references.
One of the two legislators behind the bill, Rep. Dan Pabon, D-Denver, said the intent was to protect the disclosure of “sensitive information,” and that included the identities of who is licensed to grow, sell, distribute and manufacture marijuana products here.
The owners and investors of other licensed businesses such as liquor stores undergo the same background checks and submit nearly the same information as the marijuana applicants, records show. State laws do not restrict disclosing information about those businesses.
Colorado publishes the names and locations of businesses that are licensed to grow, sell and distribute marijuana products, on the state marijuana enforcement division’s website. But it offers only a corporate name, not the people behind it.
State relies on case law
The state says its computer system cannot combine the list of licensed marijuana businesses with the list of names of those who own them. And even though it had provided a similar computerized list to The Post in the past, the state now points to a pair of Colorado Supreme Court decisions dating back decades to support why it doesn’t have to.
In one, the court decided the state’s court system is not required to manipulate computer-generated data in a way that allows the public to see it. Notably, the 1999 decision deals with the state’s courts system and criminal-justice records that are not a part of Colorado’s Open Records Act.
The court held in the second case, decided in 1988, that the government had no duty to alter a record in such a way that it would create a new one that could be disclosed under the open-records law.
“CORA does not require an agency (to) create a record just for the purposes of creating a record someone wants to see in a particular manner, or manipulate data in a way somebody would like to see it,” Brohl said. “It’s pretty clear that … CORA is not going to require us to create a record that doesn’t currently exist.”
The open-records act allows agencies to charge a fee to perform such a manipulation of data.
An effort is underway to have legislation introduced in the upcoming session that would clarify how the state’s open records law addresses computerized records and what can be charged for them.
“When you charge that much money for public records, it essentially makes them not public,” said Roberts, of the Colorado Freedom of Information Coalition. “It has a chilling effect on people making requests. This is not meant to be a revenue stream.”
To learn which marijuana businesses have faced state discipline — and to see the state enforcement division’s final decision in those cases — the agency charges additional fees.
The Post asked to review disciplinary actions in 27 instances in the past year — including a $135,000 fine issued against a marijuana ownership group for inspection failures. The agency wanted $1,015 before it would release the information. Then, if The Post wished to review the paperwork at a state office, it would be another $30-per-hour charge.
“These are limited licenses for very lucrative businesses; they’re like a signed check. Most nonprofits or citizens could not afford that expense,” Bolivar of Cannabis Consumers Coalition said about the state’s fees for information regarding marijuana business owners.
“There is no other reason than the state trying to make money,” she said. “What a shake-down.”
By David Migoya - The Cannabist/Feb. 5, 2016