In re the Marriage of Kelsey M. Yates, Petitioner-Appellee,
Michael S. Hartman, in his official capacity as the Executive Director of the Colorado Department of Revenue and State Licensing Authority for the Marijuana Enforcement Division, Intervenor-Appellant. and Kiri A. Humphrey, Respondent, and Concerning Sterling Consulting Corporation, Receiver, Appellee,
and County of Denver District Court No. 16DR30252 Honorable
Lael Montgomery, Judge
Griffiths Law PC, Carolyn Witkus, Jon Eric Stuebner, Lone
Tree, Colorado, for Petitioner-Appellee
Fairfield and Woods PC, John M. Tanner, Denver, Colorado, for
Cynthia H. Coffman, Attorney General, Claudia Brett Goldin,
First Assistant Attorney General, J. Alan Call, Senior
Assistant Attorney General, Denver, Colorado, for
1 The question before us is whether a court may appoint a
receiver for a marijuana business if that receiver does not
possess the licenses required by Colorado's marijuana
licensing laws. We hold that, although courts have the
equitable power to appoint receivers, they must make such
appointments in compliance with the marijuana licensing laws
enacted by the General Assembly.
2 Because the district court erroneously concluded that its
power to appoint a receiver trumped the marijuana licensing
laws, we reverse the receivership order.
Relevant Facts and Procedural History
3 Petitioner-Appellee Kelsey M. Yates (Wife) filed a petition
to dissolve her marriage to respondent-appellee Kiri A.
Humphrey. She requested the appointment of a receiver over
marital property, which included the "Frosted Leaf"
group of businesses (the marijuana businesses). The marijuana
businesses included a number of licensed medical and
recreational marijuana entities.
4 The court granted Wife's request for a receiver and
appointed appellee Sterling Consulting Corporation
(Receiver). The Receiver's principal is Richard Block.
The receivership order authorized the Receiver to "take
immediate control of the [businesses] and operate the
[businesses] on the Court's behalf in custodia
legis." The Receiver had the "powers and
duties" to "manage, operate, maintain, repair, and
otherwise control the [businesses] as necessary to preserve
5 It is undisputed that when the court entered the
receivership order, neither Mr. Block nor his employees held
the licenses required by section 12-43.3-103(2)(e), C.R.S.
2017, of the Colorado Medical Marijuana Code, and section
12-43.4-104, C.R.S. 2017, of the Colorado Retail Marijuana
Code, to own, operate, manage, control, or work in a licensed
6 After it learned of the receivership order, appellant, the
Executive Director of the Colorado Department of Revenue,
officially acting as the State Licensing Authority (SLA),
moved to intervene under C.R.C.P. 24. The SLA moved to modify
the receivership order by removing Sterling Consulting
Corporation as the Receiver, at least until Block and his
employees obtained the requisite licenses.After a hearing,
the court granted the SLA's motion to intervene, but
denied the motion to modify the receivership
order. The SLA now appeals that
7 We begin by distinguishing what is at issue in this case
from what is not. The SLA does not challenge the district
court's authority to appoint receivers for marijuana
businesses. Instead, the SLA only challenges the court's