Welfare cash pulled from ATMs inside Colorado pot shops

DENVER — Colorado welfare recipients are using ATMs located inside marijuana retail shops to withdraw cash.

The money was given to them by taxpayers to help their families survive, but an exclusive Fox31 Denver investigation found some cash benefits most likely going toward marijuana purchases.

FOX31 Denver asked the Colorado Department of Human Services for its “Quest card” database of Electronic Benefits Transfer (EBT) cash transactions for the month of January, 2014.

That is the first month in which Colorado marijuana dispensaries were regulated and open for recreational sales.

The FOX31 Denver investigative team matched the addresses of EBT cash withdrawal locations with the addresses of Colorado’s marijuana dispensaries.

In one month, records show 19 different marijuana retail stores had at least one welfare recipient walk into their business, insert a Quest debit card into an ATM machine inside the store, then withdraw at least $20 cash.

It is unknown how many dispensaries have ATMs inside their stores because the state of Colorado does not regulate the machines or keep track of their locations.

We also found welfare clients used state-issued debit cards inside marijuana retail stores to collect cash at least 56 times for a total of $3,895. Names like Medicine Man, Starbuds, The Green Solution, MMJ Uptown and The Sanctuary stood out.

A dispensary client named “Robbie” stopped to speak with FOX31 Denver outside MMJ to voice his concerns.

“It’s not discretionary money. It’s survival money. It’s for food and basic necessities and not for entertainment.”

We asked the overseers of cash assistance for low income families, the Colorado Department of Human Services, to review our findings.

Benefits director Lovetta Love told FOX31 Denver investigative reporter Chris Halsne, “What I can say is that we are very concerned about our programs — the integrity of our programs.”

Love also said until the legislature makes the rules more clear, what we found is legal under state law.

“Our research has shown that the majority of our recipients use their benefits to pay rent, to pay for household supplies, soap diapers, care for their children — those kinds of things. But we have no ability to determine what they can use their money for.”

FOX31 Denver spoke with several marijuana dispensary operators who were not too surprised by our findings, including “Brett,” who runs Starbuds on Brighton Boulevard.

“”Well if an EBT card is meant to be used at any ATM, I guess it’s to be used for whatever they think is necessary. We are a medical facility as well so if they were using it for medical applications, that’s a gray area right there.”

Another manager, who spoke on the condition we not use his name, told Halsne that Quest or EBT debit cards, used by welfare recipients, look very similar to all other debit cards.

He says he “would have no way of knowing if welfare cash was being used for the purchase.”  He added, however, that as a taxpayer, the misuse of public money bothers him. In his mind, welfare money is supposed to be used for necessities, not recreational items.

It remains possible that some Quest card users pulled cash from an ATM inside a marijuana retail store, than pocketed the cash without buying pot. However, customers who spoke with us admit it’s a stretch to think the money was being used for anything else.

We visited many of the dispensaries to find that not only was marijuana the only product on sale at the location, but access to the ATMs were often in secure or guarded locations not easily accessible by the public.

Leo Branstetter, who lives across the street from one of the recreational marijuana dispensaries on our list, could not believe his ears when we told him about how tax money was being used.

“No. No. No. That’s the last thing that should happen. Ever. No. There’s no justifying any of that. No way. That should never happen. If there’s no oversight, it’s going to happen exponentially.”

It is against Colorado and federal law for welfare recipients to withdraw cash from a casino ATM and spend it gambling.

However, Colorado state lawmakers have not yet made it illegal for such a transaction to occur inside marijuana dispensaries.

Democratic lawmakers in Colorado killed a bill several weeks ago that would have prevented such withdrawals in both marijuana dispensaries and strip clubs.