Welfare recipients apparently buy legal pot with taxpayer money

By Arthur Kane | Watchdog.org

Taxpayers, without knowing it, apparently are buying marijuana for some welfare recipients now that the drug is legal in Colorado.

And taking out welfare money at weed dispensary ATMs isn’t even against state law.

At least $12,000 has been withdrawn at ATMs in the state’s marijuana dispensaries in the past two years using electronic benefit transfer (ETB) cards, a state database shows.

A federal law passed in 2012 does prohibit the withdrawals in marijuana shops, and state officials are struggling to find a way to comply with those regulations, state records show.

On Thursday, Watchdog.org broke the story of how hundreds of thousands of dollars in tax money is being withdrawn in liquor stores and casinos despite state and federal laws making those withdrawals illegal.

The money at pot dispensaries pales to the liquor and gambling withdrawals, but State Rep. Tim Dore said it’s appalling to use taxpayer money to buy pot.

“At least prevent the use of these types of cards to buy marijuana,” he said. “We’re going to allow people to get money to abuse a drug that isn’t even legal federally?”

Dore, R-Elizabeth, said there have been bills and amendments to stop withdrawals from ATMs in dispensaries but none of the measures have passed. He would like reintroduce the legislation in next year.

Levetta Love, director of the Colorado Department of Human Services Office of Economic Security, said the state is working on ways to stop the withdrawals but can’t block the AMTs without action from the owners.

“We’re looking at the marijuana piece just like alcohol and gambling,” she said.

Love said CDHS is aware of the questionable withdrawals and has contacted recipients who made them, but at this point no one has lost their benefits because they withdrew money at marijuana dispensaries or other questionable locations.

Good Chemistry, a medical and recreational marijuana dispensary located less than two blocks away from the state Capitol, had the most welfare ATM withdrawals during the past two years with more than $2,500, state records show. ATM owners are not responsible for monitoring whether welfare cards are being used to withdraw money so dispensary owners have not done anything wrong.

SEARCHING: State welfare director Levetta Love said the state is looking for ways to ban welfare ATM use in dispensaries.

In the past two years, there was at least $47,000 withdrawn by welfare recipients at ATMs with the same addresses as marijuana dispensaries around the state, a joining of dispensary licenses and ATM withdrawals database by Watchdog.org shows. But many of those buildings house multiple businesses and tenants, so it’s impossible to tell whether the money was misused for pot or even withdrawn in the dispensary.

However, the $12,000 was at ATMs with the name of the dispensary on the state ATM withdrawal record so it’s clear the withdrawals happened at dispensary ATMs.

In the past two years, welfare money was taken out in more than 40 dispensaries around the state. It’s not clear from the records if the money was taken out at medical marijuana or recreational pot places as many dispensaries sell both types of marijuana.

State officials contend that just because a welfare recipient withdrawals the money at a prohibited location, it doesn’t mean he or she will use it to buy pot, liquor or to gamble.

State records show individual withdrawals at the five dispensaries with the most total withdrawals range from $20 to $500.85. Good Chemistry had the two largest one-time withdrawals with the $500.85 taken on out in September 2012 — when medical marijuana was legal but there were no recreational marijuana businesses in Colorado.

This Denver marijuana dispensary had the most welfare recipients withdrawing taxpayer money from its ATM, state records show

In April of this year, after dispensaries were allowed to sell recreational pot, someone took out $300 at Good Chemistry ATM, the state database shows. Good Chemistry’s website lists marijuana varieties like Lemon Skunk, LSD and White Strawberry Diesel selling for $240 an ounce.

About half of the 30 withdrawals at Good Chemistry happened before recreational pot was available in Colorado and about half afterwards.

Good Chemistry’s owner or manager did not return a call seeking comment.