Citing rising costs chasing down delinquent licensing fees, the Colorado Marijuana Enforcement Division is imposing penalties and possible license revocation for businesses and owners.
“Over the past six months, there have been over 200 licenses that have failed to make timely payments,” said Dominique Mendiola, MED’s senior director, in a statement to CRB Monitor News.
There were 3,574 active licenses in Colorado as of April 10, including 1,514 owner/investor licenses, according to the CRB Monitor licensing database.
A law passed in 2024 allows licenses to be valid for two years instead of one. In an April 3 industry bulletin, MED said a “growing number of licensees” are failing to pay the second annual payment.
“This has created a significant resource burden for the Division, including increased legal services costs,” the bulletin said.
Now, if a licensee’s failure to pay leads to an Order of Show Cause, the division will pursue a $2,500 fine per business license and $1,000 per owner license, in addition to the outstanding fee.
“If the case cannot be settled before a hearing, the Division will recommend license revocation at the Administrative Hearing,” according to the bulletin.
A MED spokeswoman said any final fines or license revocations will be posted on their Final Administrative Actions page when available to be made public.
Delinquencies are a sign of market distress
After Senate Bill 24-076 passed in 2024, MED suggested that licensees pay the entire two-year fee in one lump sum.
“However, industry stakeholders said that paying the two-year fee upfront would be a heavy financial burden,” MED said in the bulletin.
So, the final rule required the second payment due 12 months before the license or permit expires. According to the MED rules adopted in December 2025 and that took effect Jan. 5, failing to make any payment required in connection with the biennial license is a Level I violation. It’s in the same category that includes selling cannabis to minors, illegal diversion and failing to comply with an embargo, subject to fines in lieu of suspension of up to $100,000 or license revocation.
Attorney Christian Sederberg, who recently joined Harris Sliwoski law firm, said it’s no secret the cannabis industry has been struggling, particularly in Colorado, where inversion from hemp and illegal distillates are hurting the market.
“The slow payments reflect the hard economic realities they’re in,” he said. “Some of these delinquent companies may not be operating or are on the verge of not operating.”
He and Mendiola said the intention of the notice was to alert licensees to the situation and reduce negative impacts.
Sederberg added it was “really encouraging” that MED is also addressing the diversion problem to get rid of the pricing pressure.
On April 14, MED released another bulletin identifying compliance issues with track-and-trace and illegal THC inversion.
“The Division is committed to protecting the integrity of Colorado’s regulated marijuana market, which is critical to our mission to protect public health and safety. This may include the adoption of new and/or amended regulations and supplemental bulletins designed to promote compliance in the regulated market and ensure clarity on the consequences of violations,” MED said in the April 14 bulletin.
Problem may lead to higher licensing fees
MED warned it may have to increase fees to cover the costs of enforcing licensing payments. Under state law, the division is required to review all costs of administering the state Marijuana Code annually and make adjustments to fees.
“The staff resources expended and additional costs the Division has incurred by licensees’ failure to pay outstanding fees warrant consideration of broader fee increases to cover the direct and indirect impacts of this trend,” MED said in the April 3 bulletin.
Mendiola added, “While agency costs can vary per license based on a number of factors and, in most cases, are still ongoing and growing, consistent follow-up from several teams and the pursuit of administrative action in these circumstances requires significant resources.”
MED said it takes proactive steps to help licensees comply with timely payments, including sending multiple email notices before the payment is due and making at least one phone call after it’s late.
A late payment leads to a costly process that includes:
- The creation of an official investigative report
- Staff preparation of an Order to Show Cause for the State Licensing Authority
- Serving the Order to Show Cause electronically and through first-class mail
- Retaining the legal services of the state attorney general’s office
MED advises licensees to check their state portal to see if a license fee is due.
