In January, Justin Trouard, CEO of Mammoth Farms, a licensed outdoor cannabis cultivator in Colorado, aimed to assist a struggling marijuana cultivation company by reviewing its financial records. Instead, he uncovered what he described as “the blueprint for how to launder marijuana” within the state’s regulated market, as he reported to MJBizDaily.
While examining the company’s track-and-trace records through Metrc, Colorado’s mandated seed-to-sale compliance software, Trouard noticed alarming discrepancies. For instance, the company reported purchasing 25 pounds of cannabis flower for $16,250, which aligns with average market prices in Colorado for 2025. However, in the same record, it claimed to have sold this flower for just $20, indicating a reported loss of $16,230 on the transaction.
Trouard’s investigation revealed that the company’s records indicated many similar losing deals throughout 2024. In total, the business claimed to have bought $3.4 million worth of cannabis flower but only resold it for $70,000. This prompted Mammoth Farms to file a lawsuit against Colorado’s Marijuana Enforcement Division (MED) on March 10.
Trouard suspects that the company was not genuinely struggling, but rather was likely diverting legally grown cannabis flower to the illicit market. He believes that unlicensed hemp-derived THC oil was substituted in its place and sold in vaporizer cartridges at licensed stores, effectively allowing illicit cannabis to infiltrate the regulated market. This practice is known as “inversion,” which has become a significant concern for legitimate operators in the $32 billion regulated cannabis industry.
All the transactions Trouard reviewed were reported to the MED through the Florida-based Metrc platform. However, rather than flagging these suspicious transactions, Colorado regulators allegedly took no action, according to the lawsuit filed by Mammoth Farms. A spokesperson for the MED stated that the agency was unable to comment on the allegations due to the ongoing lawsuit.
Despite the serious nature of Trouard’s findings, which were elaborated upon in his interviews with MJBizDaily, he chose not to disclose the identity of the company involved. Meanwhile, Metrc, which is not implicated in any wrongdoing, did not respond to requests for comment from MJBizDaily.
