DENVER (CBS4)- Several medical marijuana dispensary licenses have been denied and many other locations have been fined after a state investigation. Those dispensaries were determined to be in violation of a rule that requires them to grow at least 70 percent of their marijuana.

There are some 800 medical marijuana dispensaries in Colorado serving 125,000 people who have been given the green light to use pot for medicinal purposes. Nine dispensaries have had their license requests denied and 50 more are being fined for not growing enough of the marijuana they sell.

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“These shops if they were truly providing medicine for their patients they were doing it from their own grows and doing it in house,” said Colorado’s Medical Marijuana Enforcement Division head Dan Hartman.

Those dispensaries being denied are from across Colorado and have lost their bid to get a license once they are issued, starting in July. They are among 91 that have been under investigation since September 2010.

Sensible Colorado, the pro-medical marijuana group, feels the 70 percent rule is not needed.

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“I don’t think it makes a lot of sense and comparable to making King Soopers grow the tomatoes they sell,” said Sensible Colorado spokesman Brian Vicente.

In July, a new law is expected to take effect regulating the dispensaries. The businesses will have to have background checks and credentials and some video monitoring, among other regulations. It’s expected 30 percent of the dispensaries may go out of business.

“It’s probably accurate that a lot of people got into this industry and didn’t think it would be this highly regulated,” said Vicente.

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The investigation of the dispensaries is not finished and more licenses could be denied.