A top regulator for Colorado’s Marijuana Enforcement Division acknowledged in a private meeting with industry representatives that the amount of chemically converted hemp being illegally sold as marijuana is far greater than the agency has publicly disclosed.

The remarks confirmed testing by The Denver Gazette and ProPublica, which found signs of hemp in marijuana vapes sold at dispensaries, as well as reporting that regulators have discovered that some hemp-derived vapes were contaminated with a toxic chemical.

The virtual meeting, an audio recording of which was reviewed by the news organizations, was convened by members of Colorado Leads, a marijuana industry trade group, in March to discuss a problem they said had “metastasized” and now posed an “existential threat” to the nation’s first legal recreational marijuana market.

During the meeting, Kyle Lambert, the enforcement division’s deputy senior director, said the number of hemp-derived products is “larger than we can quantify.” He said the agency feared the prevalence of banned hemp was driving down the price of marijuana in the state and helping facilitate the diversion of high-grade marijuana out of Colorado and into the black market in other states.

Describing anomalies in the system the state uses to track marijuana production and sales, Lambert told the industry players that the extent of suspicious transactions in the system “would probably explode your minds.”

Two weeks after that meeting, the division sent a bulletin to the industry that it plans to crack down on companies that illegally sell cheaper and potentially hazardous hemp products as marijuana and that it would pursue emergency rules.

But it hasn’t done so yet, and other reform efforts failed during this year’s legislative session. Despite the regulators’ concerns, Colorado lawmakers, who weren’t at the March briefing, abandoned a bill that would have let voters decide whether to........

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