The state agency charged with licensing and regulating Colorado’s medical-marijuana businesses has recently moved into office space owned by an attorney whose law firm represents a number of dispensaries.

The state Department of Revenue’s Medical Marijuana Enforcement Division will pay attorney H. Alan Dill nearly $1.3 million in rent over the five-year term of the lease, which was signed in December. The agency moved into the space in May, after remodeling work done at Dill’s expense. The leasing documents list Dill as the landlord.

Dill is managing partner of the Denver law firm Dill Dill Carr Stonbraker & Hutchings, which has its offices directly across the hall from the Medical Marijuana Enforcement Division’s new space at 455 Sherman St.

On its website, the firm says it provides “medical marijuana business consultation and licensing services for all aspects of the industry,” in addition to expertise in other legal areas.

The coziness of the quarters has raised some eyebrows in the medical-marijuana community and given critics of the Medical Marijuana Enforcement Division, or MMED, new ammunition.

“As high of standards as the MMED tries to hold the industry to, they should also try to hold themselves to high standards and avoid even the appearance of impropriety,” said Laura Kriho of the Cannabis Therapy Institute.

But Department of Revenue spokesman Mark Couch denied that the lease arrangement creates a conflict of interest.

“The fact that they may have business before the state doesn’t mean they will get special treatment from the state just because they’re our landlord,” Couch said.

Dill did not return a call for comment.

The MMED is responsible for administering Colorado’s laws and regulations for the medical-marijuana industry, which proponents have described as the most comprehensive in the nation. Agency employees oversee thousands of dispensaries, makers of marijuana-infused products, and growing facilities.

MMED officials began searching for new office space last summer. The state’s tenant broker rounded up a list of 40 possible locations in the metro area, and state officials toured 20, Couch said.

But early in the process, MMED officials already had their eyes on the 455 Sherman location, according to documents provided to The Denver Post as the result of an open-records request. On Aug. 9, Dan Hartman, who is now director of MMED, sent an e-mail to the tenant broker asking the broker to make sure 455 Sherman would be on the list of candidates.

“I have seen this space and think it really works well for us,” Hartman wrote. “We may have to carve our space out of it but that is acceptable to the landlord.”

A month later, officials appeared to have settled on two finalists — the space at 455 Sherman and another at 990 S. Broadway. In an e-mail, the tenant broker, Joe Hollister, describes the Sherman offices as “a gut and rebuild” and the Broadway offices as “an existing Plug’n’Play space.”

Couch said he didn’t know specifically why state officials chose the Sherman space over the Broadway space.

The Department of Revenue declined to make Hartman available for an interview. Couch said the Sherman offices required only a “minor remodel.” And, while an advertisement for the Broadway offices listed a lower rent price of $14.50 per square foot per year, the amount settled on for the Sherman offices — a first-year rate of $16.20 per square foot per year — is in line with the advertised rates on the other locations considered, according to the records.

“We chose what we thought was the best fit for our need at the best price we could get,” Couch said.

While Dill’s law firm’s website says the firm represents “a number” of medical-marijuana businesses, the documents provided paint a foggy picture of how much contact the firm’s attorneys have had with MMED officials.

In one e-mail, an MMED staffer forwards Hartman’s contact information to Alan Dill, noting that Hartman “mentioned that he recently met with you.”

In another e-mail, an MMED employee sends another attorney at the law firm, Robert Dill, a letter from Hartman thanking Dill for his participation in the agency’s rulemaking advisory group.

“Your assistance in creating the first round of Medical Marijuana rules is very much appreciated,” Hartman wrote.

Several people in the medical-marijuana industry declined to comment on MMED’s lease deal, not wanting to be seen as critical of an agency that regulates their businesses. Hartman, in particular, has a reputation among industry members as someone who listens to and is responsive to their concerns.

Medical-marijuana attorney Sean McAllister said he had heard about the lease arrangement but said it would be unwise to jump to conclusions.

“I have total and complete faith in the integrity and ethics of Dan Hartman and the Medical Marijuana Enforcement Division,” McAllister said.

John Ingold: 303-954-1068 or jingold@denverpost.com