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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.

33 comments

  • Vincent Mineault

    thats not right to spend Welfare cash from the state to get pot, Welfare cash is for bills, household items, when i was on it, i spent my Welfare cash to rent cell phone bill, bus pass, and household items, if i have little bit of Welfare cash, i buy something for myself but no beer and smokes and pot

    • neil stamm

      What’s the difference if they received the cash from a liquor store and boght booze with it. It’s the welfare dept thaT’S AT FAULT. gO BACK TO FOOD STAMPS!!

  • Jenny Lee

    Is there not enough stores that take credit cards in Colorado and through out the U.S.? There is no reason why people on welfare should be able to use their cards to withdraw cash. They can use the card as a debit/credit card at most stores. Utility companies allow debit/credit cards to be used to pay their bills. What difference does it make if they get the cash from an ATM machine in a pot shop or a gas station down the street. Once their welfare money is transferred to cash it can be used to buy anything including alcohol, cigarettes, illegal drugs, at strip clubs, for prostitutes and so no. Beggars cannot be choosers. There is no reason they should be able to receive cash from a welfare card.

  • D.R. Commish

    Regardless of the location of the ATM…. Welfare EBT Cards holders simply should not be able to withdraw cash from any of them.
    What ever happened to “Principal”, “Credibility”, “Honor”, and “Pride”?

    The “Safety Net” seems to have turned into a Lottery Win.

  • Tom Sanders

    Perfect example how corrupt your government is…..anything to create poverty pimps to buy votes by letting people spend taxpayers money on anything they want …the republicans wanted to pass a bill to prevent this but democrats said no.

  • Kevin Wood

    why wouldnt it be ok to buy mmj from a medical despencery i guess some people here want our tax money to go out of state to the pill lobys at the white house people should really do some research on mmj usage just look at all the drunk drivers to do there and kill 1000s of people inocent people everyday people should really get with the times homosexuals can get married and you can by beer on every corner but people always want to bash the pot head so so sad people

  • Kevin Wood

    i have a job crybaby thats why i was up at 5 30 and the fact is all the these people have payed there own taxes and its not just your money its theres also and with that being said they can spend there money on what they want and when i get to where i cant work anymore thats i will take my tax money back from uncle sam thats why i payied all them years lol and btw i work 70 plus hours a week and pay my bills and pay for my kids and pay my own way lol and oh i like to smoke pot and not be a drunk driveing killer and 2000 lb bomb aimed at some inocent child all i am saying is grow up and stop being so petty

    • Codswallop Hogwash

      Hey dummie, why not learn before you mouth off. People on Welfare DON’T PAY INCOME TAX, and that is what funds Welfare. And they have NO RIGHT WHATSOEVER TO SPEND THAT MONEY ON ANYTHING BUT SENSIBLE FOODS.
      This is more stupidity from the Democrats who are running this country into the ground.

  • Melissa Hornung

    Maybe it’s time to start implementing drug tests for welfare/aid. Most businesses require them for employment. Those who have a legit need for certain substances would have documentation stating the need.

    • Jeff Bender

      I agree with Melissa, we need to drug tests for welfare/aid. We can no longer finance people getting high with taxpayers money. There is enough welfare fraud without adding to it.

  • Bryan Berkowitz

    Chris Halsne – What percentage of the total January money paid out on QUEST cards does this $3,895 represent?

    We can all agree that having ATM access on these QUEST cards is a bad idea; as cash withdrawn from ATMs can be used for anything (alcohol, gambling, strip clubs, marijuana…). With the exception of paying rent all other purchases can be made without cash.

    Fraud will always occur with these types of programs. It’s time for the state to step up and create a system that will prevent ATM use for QUEST cards. In doing so also create a mechanism that will allow for rent to be directly paid from these accounts on a monthly basis like many now do with their personal checking accounts and direct bill pay.

    Colorado State Government – Using yesterday’s technology tomorrow!

  • Steve Bloss

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

  • Anthony Volpe

    Well we can’t really say what they used the money for you can withdraw from any atm with your cash ept card. But it wouldn’t be a surprise that some people would use there ept to buy pot. Come one I seen them used their cards all the time to buy thing like cigarettes and beer all the time.

  • Robert Mitton

    This is a reich-wing BS story to create upset, nonthinking people! I am a medical marijuana Patient of seven years. I depend on MMJ to survive. I get all my medical care now for free, excepting my MMJ, which is basically the only pain prescription I have!

    Each and every welfare recipient that needs medical care and qualifies for care should be getting their MMJ for free and not have to use their assistance for the purchase of their medicine!

    MAN YOU REDNECKS are evil bleeping people! Get real and have some compassion! Oh yeah, redneck GOPpers have no compassion.

    I’m actually sickened by this article and it is a great example why I avoid Faux news.

  • Dan Welsh

    How did the ATM give out $3,895 dollars? Also 0.02% of Colorado Welfare bought pot? I bet more people at Fox consume than 0.02%. Next can you let me know if my kids are buying Starbucks instead of lunch at School. Thanks.

  • Web Prescience Media (@PrescienceMedia)

    Every time I go into a grocery store in Downtown Denver, someone approaches me and asks me if they can purchase some of my groceries for me using their food stamp card if I will reimburse them in cash when we get outside the store. Usually the reason is to purchase alcohol and they are usually straight up about it. Same sort of conversion but requiring a more extroverted personality and more risk. However, just because you are receiving government assistance doesn’t mean that you aren’t entitled to recreation and enjoyment of your life in some measure. Perhaps the poor deserve to relieve themselves of the burden of “merely surviving” more than any of us needs to escape our “first world problems”.

  • Donna Ann

    I don’t understand. When I had an EBT card (for one month last year) I couldn’t get cash. I could use it to buy stuff. I couldn’t buy liquor (I don’t drink, but they gave me a pamphlet explaining stuff) or cigarettes ( I don’t smoke) I had one guy at the General Relief tell me that if I wanted cash, I could take a friend to the grocery store, buy them what they needed and have them give me cash.

    I am pretty sure I couldn’t get cash.

  • Tipsy McStagger

    The whole Fox news story is based on false statements. A article by the Tampa times rooted out the false hoods. EBT & Snap cards cannot be used to get cash. End of story. Stop watching the False News Network.

    • D.R. Commish

      Dearest “Typsy”…. On your recommendation, I did indeed read the Tampa Times article…. Funny thing… It seemed to reiterated the fact that you CAN get cash from EBT / Snap usage… adding that….

      “The agency estimates that nationwide, this type of fraud accounts for millions of dollars of misused taxpayer money”.

      “END of story.”
      Thanks for the great tip….
      I might suggest that YOU Stop watching MSNBC.

  • Dale Berg

    Once again the liberal media make a BIG thing out of a real life story. Reality is reality, get a grip people, your new liberal society allows it so whats the big shock. People do what they need to do to survive in their world. End foreign suppsidies and take care of your own people.

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