A Denver cannabis lounge that was at risk of losing its license will remain open and has instead been ordered to pay a $10,000 fine by the city’s Department of Licensing and Consumer Protection.
Tetra Lounge, located at 3039 Walnut St., was fined after a hearing last November in which it had to respond to allegations that violated several laws during special events it held on April 20 and July 10, both notable cannabis holidays.
The business has been ordered to pay $10,000 within 90 days and is effectively on probation for a year. If it incurs another violation, Tetra Lounge will have to pay an additional $10,000 and close for 60 days, according to a final decision issued Thursday by Molly Duplechian, executive director of the Department of Licensing and Consumer Protection.
This is the first licensing discipline case for a marijuana hospitality business in Denver, according to department spokesperson Eric Escudero. Tetra Lounge owner Dewayne Benjamin said he plans to appeal the decision.
Last year, city officials issued Tetra Lounge an “order to show cause,” prompting a hearing in which the business had to defend itself and explain why its license “should not be suspended or revoked.” In the order and subsequent hearing, city inspectors said they visited the business on April 20 and July 10 of last year and witnessed unlawful activity, including the sale and sampling of marijuana onsite.
Opened in 2018, Tetra Lounge is what’s technically called a cannabis hospitality business; however, marijuana sales are not permitted under the conditions of its license. Instead, patrons bring their own weed and pay an entry fee to smoke on the lounge’s outdoor patio.
Inspectors alleged that cannabis consumption was happening inside Tetra’s building – which is not part of the licensed premise – and that vendors at both events were unlawfully distributing marijuana products. They said there were also booths selling psychedelic substances such as psilocybin and DMT, which is illegal. (One of the officials lost their position with the city after consuming a mushroom gummy on the job during the April 20 inspection. Technically, the booth was located outside of Tetra Lounge’s property.)
While the inspectors provided circumstantial evidence, such as pipes with burnt marijuana sitting inside Tetra Lounge and booths with listed product prices, they purportedly didn’t see sales transactions happening first hand, according to testimony presented at the hearing. One inspector was, however, told marijuana products were for sale. He also saw people congregating inside the space, which did not have a certificate of occupancy, on April 20.
Reached by phone Thursday, Benjamin denied the allegations and said media coverage of the enforcement action has caused Tetra to experience drops in event bookings, sponsorships and daily visitors.
This is not the first time Tetra Lounge has come under scrutiny from Denver officials. Although the spot operated as a private club for many years, allowing people to smoke inside, it was forced to close in 2022 after Denver changed requirements for what was then a new type of license for “marijuana hospitality” establishments. In 2023, Tetra was issued a ticket for not having the appropriate license.
Benjamin said this latest dispute “showcases the city is continuing their predatory and discriminatory behavior toward Tetra Lounge.”
In the decision, Duplechian said the fine was warranted because “Mr. Benjamin fails to take responsibility for any of the violations. He argues that because he did not personally commit the violations involving the sale or distribution of marijuana, that he should not be held accountable.”
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