Medical marijuana: When it comes to dispensary-owner background checks, it's game on

isle of capri hotel and casino.jpg
When is a dispensary like a casino?
The medical marijuana legislation grinding through the Colorado House and Senate continues to fire up debate -- note these recent back-and-forths between Senator Chris Romer and MMJ advocate Rob Corry over the issue of licensing requirements for patients age 21 and under.

But plenty of other nuts-and-bolts questions remain. Such as: What kind of background checks will be mandated before the state will license medical marijuana providers?

Romer asked the Colorado Department of Revenue about that and was told the likely structure will resemble the one used in the casino business. To that end, Division of Gaming personnel shared three documents, which feature plenty of hoops through which applicants must jump. At least 23 of them.

That number doesn't including filling out forms such as a business checklist or an associated or key background checklist. (Note: Accessing these documents requires Microsoft Excel.) Instead, it pertains to the list contained in a sample letter from the Division of Gaming's criminal enforcement section.

The items in the letter can get mighty detailed. As an example, here's number twenty:

List the full name and address of every person, including lending agencies, who have a right to share in the revenue of limited gaming, whether as an owner, assignee, landlord, or otherwise or to whom any interest or share in the profits of limited gaming has been pledged or hypothecated as security for a debt or deposited as a security for the performance of an act or to secure the performance of a contract of sale.

That hasn't dissuaded you from getting into the dispensary business? Then read the entire document below:

Colorado Division of Gaming Criminal Enforcement Section

Lakewood Office
1881 Pierce Street, Suite 112
Lakewood, CO 80214-1496

Phone: (303) 205-1300
Fax: (303) 205-1342

Month Day, Year

Applicant Name
Physical/Mailing Address
City, State Zip Code

RE: Manufacturer/Distributor, Operator, Retail License Application

I have reviewed the business application for Applicant Name and have found that additional documentation is necessary in order to proceed with the investigation of this application. Please provide the following information as requested:

1. A copy of the vendor's list for Applicant Name, its subsidiaries and associated businesses. Please include a current aged accounts payable schedule with this list.

2. A copy of the customer list for Applicant Name, its subsidiaries and associated businesses. Please include a current accounts receivable schedule with this list.

3. The payroll register/listing for Applicant Name, its subsidiaries and associated businesses. Please include all consultants and independent contractors with a business or contractual relationship with your company, currently or within the past 5 years.

4. A narrative describing the relationship between Applicant Name, its subsidiaries and associated businesses. Please include a description of the nature of each business and its location.

5. A listing of all foreign bank or investment accounts or investments in foreign companies by Applicant Name, its subsidiaries and associated businesses.

6. A listing of all material financial agreements that exceed $25,000 to include lease agreements, loan agreements or any other agreements that are material to Applicant Name, its subsidiaries and associated businesses. Please include the name of each contractor/contractee and a brief statement describing the nature of each contract.

7. A listing of all petty cash accounts maintained by the company and their balances. Also include a listing of all petty cash disbursements over the past year.

8. A copy of board/management committee/partnership meeting minutes that have taken place in the last three years.

9. A copy of audited financial statements for the last three fiscal years for Applicant Name (ending with the most recent year-end).

10. Copies of all internal audit or compliance reports prepared during the past three years for Applicant Name, its subsidiaries and associated businesses.

11. A listing of all existing operating bank accounts for Applicant Name, its subsidiaries and associated businesses. Please include the account balances as of the date of your response. Also include any lines of credit, which may exist for these entities.

12. A list of current shareholders/partners for Applicant Name, its subsidiaries and associated businesses.

13. A list of the current ownership, breaking out all persons that hold 5% or more ownership in Applicant Name. Please include each investor's initial and aggregate capital investment.

14. A list of all encumbrances against Applicant Name, its subsidiaries and associated businesses. Please include all UCC filings, liens or related items.

15. A copy of all articles of incorporation or partnership filings with the Secretary of State for Applicant Name, its subsidiaries and associated businesses.

16. A copy of all trust agreements associated with ownership in Applicant Name, its subsidiaries and associated businesses. Please include a listing of all trustees and beneficiaries of these agreements.

17. A copy of all due diligence information gathered by Applicant Name on all persons associated with this license application, including subsidiaries and associated businesses.

18. A listing of all corporate credit card accounts and employees assigned a credit card for each account.

19. A listing of all persons supplying goods, equipment, devices, or services to Applicant Name, its subsidiaries and associated businesses in return for payment of a percentage, or calculated upon a percentage, of limited gaming activity or income.

20. List the full name and address of every person, including lending agencies, who have a right to share in the revenue of limited gaming, whether as an owner, assignee, landlord, or otherwise or to whom any interest or share in the profits of limited gaming has been pledged or hypothecated as security for a debt or deposited as a security for the performance of an act or to secure the performance of a contract of sale.

21. A list of all items of value given to public officials by the entity or its associated persons. Please include items such as campaign contributions, complimentary dinners, gift baskets, trips, etc.

22. A listing of all approved and pending gaming applications in jurisdictions outside of Colorado. Include the date of application, status of application, and the name and address of the regulatory entity where the application was made.

23. Please complete associated business applications for Name of Company and Name of Company. These applications can be obtained by visiting the Division's website at www.revenue.state.co.us/Gaming. If you need assistance downloading these documents, please do not hesitate to call me.

Please provide the information and/or documentation requested in this letter to Investigator Name by no later than Month Day, Year.

Your cooperation and assistance in providing these documents will help to ensure a timely completion of your background investigation. If you have any questions or additional concerns, feel free to contact me at (303) 205-13XX.

Sincerely,

Investigator Name
Title

cc: Local Counsel for Applicant (if applicable)

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