Marijuana regulators are warning the industry’s cultivators, manufacturers and sellers that they will investigate any perceived issues with the state’s inventory tracking system and signs of hemp inversion — two concerns they say threaten public safety and the integrity of Colorado’s legal market.

In mid-April, the Marijuana Enforcement Division (MED) issued a bulletin outlining its enforcement priorities and, while they are not new, spokesperson Kyle Boyd said certain issues, such as inversion — using cannabinoids like THC and THCA from hemp to make regulated marijuana products — can be difficult to investigate. The bulletin puts operators on notice that regulators are monitoring inventory tracking and anything they consider suspicious activity.

That includes marijuana transfers between cultivators and manufacturers that are priced below market averages, “in some cases as low as $1,” the bulletin states; transfers that are mislabeled or misrepresented in the tracking system; and cannabis concentrate transfers from retail companies to medical ones, which regulators say constitutes an attempt to avoid paying an excise tax.

Additionally, regulators reiterated that hemp inversion is strictly prohibited. That includes any synthetically-made cannabinoids, such as CBD from hemp that has been chemically converted into THC. In 2021, the agency suspended one company’s license for three years for inverting hemp into marijuana products.

Boyd said by email that the majority of Colorado’s cannabis operators are compliant, but the division is working to identify and weed out bad actors who create an unlevel playing field, introduce public safety concerns, and drain valuable resources.

“Failure to meet basic regulatory requirements, such as accurately tracking source material, maintaining proper transfer records, or having functioning surveillance, will not be dismissed as simple oversight. Instead, we view such deficiencies as evidence of a concerning pattern and practice that warrants our continued attention,” Boyd said. “Any deviation from the standard practices a reasonable business would implement to mitigate its own legal and operational risks warrants our close attention.”

How contaminated weed gets by Colorado’s strict cannabis testing guidelines

MED’s warning comes after its enforcement efforts have come under scrutiny in recent years. Colorado was the first to legalize recreational cannabis in 2012 and paved the way in terms of figuring out how to regulate a state-legal but federally-illicit substance. But critics say oversight has not kept up with an evolving market.

Last year, an edibles manufacturer sounded the alarm about the state’s testing requirements, which it believes too often allow contaminated products to reach dispensary shelves. Separately, a cultivator sued MED, alleging the agency has failed to uphold its statutory duty to protect consumers and prosecute bad actors. (The lawsuit was dismissed.)

Boyd said regulators published the recent bulletin to share more details about how the agency, which employs 26 investigators to monitor roughly 2,100 medical and recreational businesses, is working to maintain the integrity of the local industry.

In 2025, the division investigated 160 companies for product safety-related concerns and an additional 300-plus based on complaints made directly to regulators, according to a January report. It also conducted 778 checks related to preventing underage sales and youth access and reported 99% of stores were in compliance. As of July, cannabis concentrate manufacturers must also test their products for additional residual solvents that could help indicate whether or not the product was derived from hemp.

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