What a tangled web they weave….
Justin Trouard thought he was doing a favor when he agreed in January to look at the books of a struggling, licensed Colorado marijuana cultivation company to see if he could help turn the business around.
Instead, the CEO of licensed outdoor cultivator Mammoth Farms stumbled onto “the blueprint for how to launder marijuana” in and out of the state’s regulated industry, he told MJBizDaily.
While examining the cultivator’s track-and-trace records in Metrc, a widely used software program that’s Colorado’s mandated seed-to-sale compliance tool, Trouard noticed some suspicious activity.
- In one column, the company reported purchasing 25 pounds of cannabis flower from an unidentified cultivator for $16,250. That’s a normal transaction at Colorado’s average market prices in 2025.
- In another column in the same row, the company entered what it claimed to have done with the market-rate flower: The cannabis was sold to another cultivator, but this time as flower intended for extraction into distillate for vaporizer cartridges – for $20.
In other words, the business reported a loss of $16,230 on the transactions.
Trouard said the business’ records for 2024 showed many similar losing deals.
In all, the business reported buying $3.4 million worth of cannabis flower that it then resold for $70,000, a claim Trouard’s Mammoth Farms alleges in a March 10 lawsuit filed against Colorado’s Marijuana Enforcement Division (MED).
Following the data leads to startling discovery
Trouard doesn’t believe the business struggled because it chose to lose millions on repeated bad deals in which it bought expensive source material and converted it to a lower-priced product.
Instead, according to the Mammoth Farms lawsuit, the business likely diverted legally grown cannabis flower to the illicit market – and then inserted unlicensed hemp-derived THC oil into the flower’s place that was then sold in vaporizer cartridges at licensed Colorado marijuana stores.
In other words, Trouard believes he found what amounts to a how-to guide for inserting illicit cannabis into the regulated marijuana market.
That’s a practice known in the $32 billion regulated marijuana industry as “inversion,” and it’s one that operators in several states say is a growing problem that jeopardizes legitimate businesses.
All the business’ transactions examined by Trouard were reported to the MED via the Florida-based Metrc platform.
But instead of flagging the transactions as suspicious and taking action, Colorado regulators did nothing, the Mammoth Farms suit alleges.
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How a Colorado operator stumbled onto ‘blueprint for laundering marijuana’
