At Highland Health medical-marijuana dispensary in Denver, the renovations are only barely completed.

A new yoga room. A new healing area for a hypnotherapist.

The upgrades are the realization of co-owner Diane Irwin’s vision for the business. But they’re something she’s going to have to walk away from within the next month if she wants to stay out of federal prison.

Irwin owns one of 23 dispensaries statewide that received a letter from the U.S. Attorney’s Office warning that their proximity to a school puts them in line for federal prosecution and asset seizure if they do not close by Feb. 27.

Irwin said she feels upended.

“We’re looking for a place to move,” she said. “We don’t really know what to do. Do we stay? Do we call their bluff? Do we go to jail?”

The 23 warning letters — the most aggressive federal action yet against dispensaries in Colorado — have sent a jolt of panic through the state’s medical-marijuana industry. Dispensary owners who received them are scrambling to figure out what to do. Dispensary owners who didn’t receive a letter also are wary about what federal prosecutors might do next.

U.S. Attorney for Colorado John Walsh has said he sent the letters because he’s worried about the impact medical marijuana is having on kids and said he is serious about clearing dispensaries out from near schools. He also has hinted that more letters — over different concerns — could soon be sent to other dispensaries, as federal prosecutors define the parameters within which they will tolerate the businesses.

Judy Negley, who owns Indispensary in Colorado Springs, said she sees the letters as an unjust invasion of the federal government into state affairs. Negley’s downtown location received one of the letters, and she said she has thought about staying open just to raise the fight.

“If I could do anything I wanted to and had the resources to fund it, that is certainly tempting,” Negley said. “The most rational choice is a change of location. But it’s unclear, to my mind, from the letter what they intend to do next.”

Julie Postlethwait, a spokeswoman for the state’s Medical Marijuana Enforcement Division, said dispensaries can move to new locations, as long as they comply with their cities’ rules. And medical-marijuana attorney Warren Edson said he believes dispensaries that are forced to move still have places they can go.

But if federal prosecutors announce new crackdowns — for, say, dispensaries near parks — the available real estate will disappear.

“As more waves come out, they’re going to run out of places real quick,” Edson said.

The uncertainty about what’s coming next is just another worry now for Irwin.

She said her son, who also is her business partner, is trying to find a place to move to. But she laments that it won’t be the same — or as discreet. Though Highland Health is near a school, it is on the fourth floor of a nondescript office building off of Speer Boulevard in northwest Denver. There’s no gaudy sign out front. The shop is basically invisible from the street.

“I feel like fighting,” Irwin said, “but I don’t want to go to jail, either.”

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

