How Colorado Failed to Regulate and Keep Intoxicating Hemp Off the Shelves — ProPublica

The owner of a marijuana testing lab called a top regulator in Colorado on his cellphone in April 2024 with an urgent situation.

“We’ve got something that’s kind of a big deal,” he remembers saying.

During a routine test of a manufacturer’s products, Bona Fides Laboratory in Denver had found a toxic chemical in a popular brand of marijuana vapes sold at dispensaries in Colorado. The chemical, methylene chloride, is prohibited by Colorado’s marijuana regulators and for most uses by the U.S. Environmental Protection Agency because it can cause liver and lung cancer and damage the nervous, immune and reproductive systems. The owner felt he had a duty to call immediately rather than just submit a report through the state’s online system.

As state regulators investigated, they discovered a second problem: The product wasn’t derived from marijuana at all. It came from hemp, a close cousin of marijuana that is much cheaper to produce and that Colorado had banned companies from using to make intoxicating products for sale in the state. 

Congress had legalized hemp in 2018 for other uses, such as clothing and rope, and because people believe its high levels of the nonintoxicating compound CBD can help them with seizures, pain and sleep. Hemp has extremely low levels of THC, the psychoactive compound found in marijuana that gets people high. And federal lawmakers thought allowing it would support farmers and rural jobs without the risks posed by marijuana. 

But hemp manufacturers quickly figured out how to convert CBD into THC through a process that involves toxic solvents, creating products that sometimes contain harmful chemicals and that can be more potent than products made from marijuana.

Colorado was one of the first states to ban intoxicating hemp products made by chemical processing, initially with regulatory advisories and then with legislation in 2023. In doing so, lawmakers and Gov. Jared Polis boasted that Colorado — which had created the first regulated recreational marijuana market in the nation — was once again a model for how to smartly regulate cannabis, generating billions of dollars in tax revenue while keeping consumers safe.

But despite the ban, the legislature and regulators failed to adopt many critical regulations that other states have employed to keep hemp products off the shelves. 

Unlike some other states, Colorado’s lab testing system operates largely on an honor code, with marijuana manufacturers free to choose the samples they send for analysis. Colorado won’t require labs to test those products for the toxic chemicals used to convert hemp to THC until this summer. The state is also now scrambling to set up its own testing program to randomly purchase products from dispensaries to verify safety.

The 2023 law also had an exception that allowed registered hemp companies to continue manufacturing intoxicating hemp products, but only for sale outside the state. Thuy Vu, a compliance consultant who once spearheaded the city of Denver’s marijuana manufacturing inspection regimen, warned lawmakers at the time that the carve-out “was an open invitation for bad actors” that would result in “misbranded products” proliferating in Colorado.

The cumulative effect of these gaps means hemp-derived vapes, gummies and other edibles, which may be more dangerous than traditional marijuana products, are making their way to consumers in Colorado, according to regulatory filings, independent testing and lab results filed in litigation against companies and the state.

Comparing Marijuana and Hemp

Officials with the state Marijuana Enforcement Division declined requests for an interview. Agency spokesperson Heather Draper said in a statement that the agency updates its testing program on “a nearly annual basis” and “intends to pursue additional regulatory updates to the testing program this year.”

She said the division continues to investigate allegations of companies using hemp-derived THC in marijuana products but noted that the inquiries take time because “they can be highly complex and require significant resources to complete.”

After the passage of the 2018 federal farm bill, many states were caught off guard as people could buy hemp-derived vapes and gummies similar to marijuana products online or at gas stations across the nation, sometimes without age restrictions.

That sparked safety concerns as calls to poison control centers and emergency room visits related to known hemp products surged.

“When you have a market that is unregulated, difficult to assess and evolves very quickly, that is a calling card for nefarious agents to step in and make money,” said Michelle Peace, a toxicologist at Virginia Commonwealth University. “So, if they can make something that might have a little bit better of a kick, why not?”

With concerns mounting and states creating a hodgepodge of rules governing intoxicating hemp, Congress passed a law in November banning nearly all hemp-derived products starting in the fall of 2026. But how the government will implement that is an open question. In December, President Donald Trump issued an executive order to increase medical marijuana and CBD research, tasking his aides to develop regulations with Congress that would allow some hemp products while barring those that pose serious health risks.

For now, it remains up to the states to regulate hemp. And Colorado’s experience underscores how difficult that task is. The hemp derivatives have jeopardized a key promise made to the state’s voters: that marijuana legalization would drive out the black market and create a safer environment through regulation.

With hemp, the opposite has happened, marijuana industry representatives say.

Following the lab owner’s warning in April 2024, it took state regulators about two months to issue a public health advisory about the toxic vapes. The once-prolific vape manufacturer surrendered its marijuana license in January 2025. Last year, state regulators suspended two more marijuana operators after finding they used hemp-derived THC in products.

The Denver Gazette and ProPublica conducted their own testing on products purchased at legal cannabis dispensaries in August and September. Three of the 14 vape products tested contained compounds and chemical residues that several experts said were indicative of hemp. A fourth vape had a solvent often used to process hemp into THC.

The cases of manufacturers swapping marijuana for hemp have threatened Colorado’s marijuna industry so much that many companies are calling for tougher regulation. One even sued the state, asking a judge to force the Marijuana Enforcement Division to overhaul its testing regimen. In court filings, the agency argued that changing testing protocols was unnecessary and impracticable.

“The honor system is not working in Colorado,” Justin Trouard, owner of Mammoth Farms, the largest marijuana cultivator in the state, said in the lawsuit. “The strong economic incentives for hemp inversion have made it common practice in Colorado.”

“The Marijuana ‘Goods’ Have Changed”

Colorado seemed well-prepared to take on hemp after the world’s first stores licensed to sell marijuana opened there in 2014. 

The state developed a “seed-to-sale” system to track marijuana from the initial planting  to the purchase of pot, vapes and other products in dispensaries, which was meant to calm fears that marijuana grown in Colorado would be diverted to states where it remained illegal. Colorado also set up licensed private labs to test marijuana products for contaminants and potency. The tracking and testing became foundational elements that other states looked to when they set up their own legalization programs. 

The first wake-up call for Colorado marijuana regulators about intoxicating hemp came in 2021.

A Broomfield man, whose business used marijuana to make the honey-colored syrup known as distillate that goes into vapes and gummies, reported that another company, Mile High Distributing, was making distillate from hemp and selling it as a marijuana product.

Mile High’s owner, Jeffry Knight, who ran a string of Florida nightclubs and restaurants, had teamed up with retired pharmaceutical industry chemist Harold Meckler to come up with a way to convert hemp CBD into highly potent and profitable THC distillate for a fraction of what it cost to use marijuana, according to patents, a state investigation and interviews with Knight and Meckler.

After investigating the complaint, Colorado’s Marijuana Enforcement Division sought to bar Mile High from participating in the state’s marijuana industry, arguing the company had used solvents and a chemical conversion process that weren’t allowed to make a new hemp-derived concentrate for products sold in marijuana dispensaries.

At the suspension hearing, Meckler testified that Mile High’s hemp distillate was “probably safer” than what you get from “Mother Nature,” stressing that distillation should remove any chemicals used in the process.

But Heather Krug, then Colorado’s state cannabis sciences program manager, worried that did not occur and testified at the hearing about the dangers posed if chemical residue remained in the final product. “When you inhale something,” she said, “it tends to go directly into your lungs and into your bloodstream and goes right to your brain.”

Denver Fire Department officials expressed concern that if the chemicals inside Mile High caught fire or exploded, a plume of toxic gas would have reached 1 to 2 miles over Denver neighborhoods, according to a simulation run by the department’s hazmat team.

“A new breed of marijuana concentrate has entered Colorado’s cannabis market,” state hearing officer Milla Lishchuk said in her suspension order, warning that the state had failed to keep up with the changing industry. “Essentially, the marijuana ‘goods’ have changed in the cannabis market, but the laws — at least in Colorado — have not.”

She suspended Mile High’s marijuana manufacturing license for three years, and the company went out of business. 

In an interview, Knight said that after his suspension, he had tests conducted on about a dozen products from Colorado dispensaries and found that two-thirds of them were hemp derivatives. He said his competitors simply stole his company’s patented techniques and were doing what he was suspended for.

“There’s a bunch of guys in Colorado that are making it illegally,” Knight said in the interview. (Knight is facing criminal charges in Florida after a fatal boat crash last year. He has pleaded not guilty.)

Knight and Meckler contend that they didn’t endanger anyone with Mile High products but that the chemical conversion process could be dangerous in the wrong hands. “There’s a lot of people that don’t know what they’re doing,” Meckler said.  

Mile High’s case prompted Colorado regulators to issue warning bulletins about hemp-derived THC in 2021, but it took state lawmakers nearly two years before they passed legislation that confirmed regulators could ban the sale of intoxicating hemp products in Colorado.

By then, the hemp industry was already entrenched in Colorado. It had invested over $300 million in the state and generated $800 million in annual revenues, according to one industry estimate given to lawmakers. It’s unclear how much of that is intoxicating products. But an industry expert told a legislative task force that Colorado had become “the biggest provider of hemp-finished products in North America.”

Intoxicating hemp products were also spreading widely across the country. Several states took action. Oklahoma, for example, launched a secret-shopper program to ensure accurate labeling for its sanctioned medical marijuana products, including tests to detect banned solvents.

Other states that had followed Colorado’s lead in full marijuana legalization have since adopted more robust measures that Colorado did not. Of the 43 regulated recreational and medical marijuana markets in states and the District of Columbia, 24 require testing for methylene chloride.

Federal health officials also began to sound the alarm. The Centers for Disease Control and Prevention posted a public warning about the risks of hemp-derived THC in 2021 after a spike in hospitalizations, including children who had consumed hemp gummies.

The following year, the Food and Drug Administration warned that hemp that had been chemically converted into THC “may have potentially harmful by-products (contaminants) due to the chemicals used in the process.”

And studies found THC products derived from hemp caused more harm than marijuana. A review of FDA data from 2018 to 2021 found triple the number of adverse events tied to delta-8 THC, a compound common in products chemically derived from hemp, as that in delta-9 THC, the version found in marijuana.

Like other states, Colorado requires marijuana manufacturers to have labs test their products to ensure safety. Twenty-six states and the District of Columbia require lab personnel to collect samples for testing to ensure that manufacturers don’t cherry-pick products for testing and hold back contaminated products. 

But Colorado lets manufacturers select samples for testing. The state found two dozen cases in which companies had manipulated testing in 2024 alone, according to a review of Marijuana Enforcement Division reports. The violations ranged from substituting samples that were different from what companies sold in stores to the use of unauthorized chemical treatments on submitted samples.

In an April court filing in the lawsuit brought by Mammoth Farms, the division said it saw no reason to require testing for methylene chloride since it’s already banned and that doing so would be “unreasonably impracticable.” The agency’s attorneys said state employees couldn’t collect samples for testing because they are barred from possessing controlled substances, but the filing didn’t say why private labs couldn’t gather them.

Marijuana industry officials say this resistance by regulators has made it easier for manufacturers to cheat by using hemp-derived distillates. They also say the lack of regulation makes it hard to detect whether the distillate they buy is derived from hemp.

“It has never been cheaper to get the results that I want and more expensive to get an accurate understanding of what is in my inventory,” Justin Singer, CEO of Denver-based cannabis company Ripple, said at a recent policy forum. “If you actually want an accurate number, you cannot get one today if you care about accuracy. If you just care about passing the test, you can get that for 120 bucks.”

Test Results Raise Suspicions

The gaps in Colorado’s marijuana laws have allowed hemp to keep showing up throughout the market. Time and again, Colorado has issued late warnings to the public or delayed enforcement action, even when officials were aware of the violations.

The biggest discovery of illegal hemp products occurred with the tainted vapes that Bona Fides Laboratory called about in April 2024. But it wasn’t the first time Colorado regulators had heard concerns about the company, Ware Hause. In October 2023, a whistleblower warned the Marijuana Enforcement Division that Ware Hause was chemically converting hemp to make intoxicating vapes and selling them as marijuana.

The state opened an investigation after the 2023 report, but regulators didn’t warn the public until June 2024, a couple of months after the lab reported the positive tests for methylene chloride. The Marijuana Enforcement Division told consumers to destroy or return Ware Hause vapes bought as many as five months earlier. The agency determined that samples Ware Hause had submitted for testing were not representative of what it put out to market. 

Ware Hause’s owner, Thanh Hau, declined requests for an interview and did not respond to detailed questions.

The problem was more widespread than Ware Hause, according to Mammoth Farms, which grows marijuana and has a lot to lose if hemp infiltrates the market. The company sued Ware Hause and three other manufacturers last year, claiming that independent testing showed their vapes contained distillate derived from hemp.

Mammoth Farms argued that the low-cost hemp put consumers at risk and also put it and other companies at a competitive disadvantage. The companies have denied the allegations, and Ware Hause countersued, contending that Mammoth Farms was the one using hemp derivatives to make distillate, an allegation Mammoth Farms denied.

For now, Colorado doesn’t have a testing regimen to detect hemp to help sort out such conflicts.

In March, Mammoth Farms filed another lawsuit against the Marijuana Enforcement Division, arguing that the testing system and seed-to-sale tracking program were failing to catch impostor products derived from hemp.

During a court hearing in that case last spring, an official for Purplebee’s, once the largest marijuana distillate manufacturer in Colorado, said hemp distillate was making it hard to turn a profit. James Parco, former president of manufacturing, said the price of distillate had cratered to $2 a gram. That was down 85% from what testimony in another case estimated it had been four years earlier, and he said the decline forced his company out of the distillate business.

The judge dismissed the lawsuit against the enforcement division in May on procedural grounds, stating that Mammoth Farms should have petitioned regulators for rule changes before filing the suit.

Regulators have since found other hemp cases. The Commission Cartel, a marijuana manufacturer, surrendered its license in July after the Marijuana Enforcement Division found vials of hemp-derived compounds in a refrigerator at the factory it was using. 

One of the company’s owners, Joshua Littlejohn, denied in an interview that the company used hemp in its edibles and said it had instead used hemp to manufacture body creams for another company, which state regulators said still wasn’t allowed because the hemp had intoxicating levels. He said he surrendered his license because fighting regulators would cost too much.

Colorado regulators have started taking steps to adopt regulations that other states have, with a trial of an off-the-shelf testing program to buy products from dispensaries and double-check the work of labs. 

They also agreed to require testing for methylene chloride before any products can go to dispensaries. Still, the state delayed implementation until July to give labs time to adjust their practices.

“It’s not enough,” said Singer, the owner of Ripple. “It is a start. But like, again, they’re four years late at least.”