Sounding mildly irritated that the Chaffee County Planning Commission had dropped the issue into their laps, the Board of County Commissioners tabled the recommendation to amend Chaffee County Land Use Code (LUC) to allow wholesale marijuana growers to add marijuana medical/retail centers at their industrial-zoned sites. The decision at their March 12 regular meeting included a request for a joint session with the planning commission not later than May 15, to discuss the county’s position. It also directed staff to seek input from all three municipalities regarding any LUC changes allowing marijuana sales within county industrial zones.
“I don’t like the way we work with the planning commission. It undermines my sense of confidence in being able to make a decision when they can’t explain what they want,” said County Chair Greg Felt. “Do you see the challenge in trying to cover this? We’re not getting enough communications about the discussion (they had)…. they approved this because they wanted to poke the bear. Well, I’m not a bear – but I need more information!”
The citizen-initiated amendment was proposed by Pure Greens CEO Sterling Stoudenmire. Pure Greens is one of only three marijuana grow operation licenses currently active in Chaffee County, out of the six permits initially issued. The county has had a moratorium on permitting medical and retail marijuana centers since 2010. Salida has allowed them in limited areas, while Poncha Springs and Buena Vista voters have rejected allowing retail marijuana centers.
“There are two things going on here. One, we don’t allow any retail marijuana sales in any county areas,” Felt said. “Second, we have a moratorium on any new licenses for grows and infused products, which are the only licenses we offer.”
“This is a good starting point for the board to give staff direction on where we should go with marijuana code,” said Assistant County Attorney Daniel Tan. “The previous boards didn’t want to approve retail sales in the county … this would amend sections of the Land Use Code to allow retail center for medical/retail only in the industrial zone.”
“This (permitting) is still a state process, so changing the land use code is only the first step to allow us to sell our own product here in Chaffee County on our own property. This proposes limits it to exiting properties that are already licensed,” said Stoudenmire. “We have a 24-acre site and we use six to seven acres. Most of our site is empty. During the planning commission meeting Marjo Curgus said that if this were a distillery we wouldn’t even be having this conversation … we’ve worked hard to establish ourselves as a good player here with a positive impact – we want to sell our products on our site.”
Stoudenmire pointed out that in Denver a marijuana medical/retail center at a wholesale operation is not uncommon; that it equates to the concept of a factory outlet. He reminded commissioners that Pure Greens has another $3 million expansion of its Greenhouse 2 and the company has a vested interest in making sure it doesn’t have a negative impact on Smeltertown. “We took the approach in Chaffee County to be more restrictive than the City of Salida is – our setbacks are more strict – ours are the most conservative.”
Commissioner Rusty Granzella asked if the county were to allow retail marijuana centers, if it would mean the Salida might loose some of its sales tax (on marijuana).
Stoudenmire replied that it would mean that adding marijuana medical/retail centers would allow the county to pick up additional excise tax and that current retail centers import their stock into the county. This way the county could consider a sales tax on marijuana. “We intentionally wrote this proposal so it would stay in the industrial zones we are in. Yes, the city might loose some sales, but the county could pick up sales tax if it were to put it on the ballot. We are heavily regulated, from signage to where we are told to operate. You could say this is an industry discriminated against in many ways.”
Felt reminded Stoudenmire that years earlier he had said that Pure Greens would not move into retail sales.
“We didn’t want to, we’re being forced to,” said Stoudenmire, who explained the entire business model is changing, with plunging wholesale marijuana prices, and public fund investments allowed in other states, but not allowed by Colorado.
“The industry is integrating … this isn’t a regular commodity. But if we look at what we saw this year, a lot of people sold out their last harvest for low prices,” said Stoudenmire. “(In Denver) grows are shutting down; we’re seeing contraction on the supply side – if we have a retail dispensary here, we’re getting $1,200 to $1,500 per pound. At our store in Denver we set pricing to be some of the best in the city, and our quality is high.
During deliberation, commissioners discussed retail center issues: their ability to limit hours of operation, setbacks from street views and proximity to schools, as well as age and identification enforcement. Granzella expressed the view that he thought allowing marijuana retail centers was about helping small businesses.
“Some small business will be steamrolled by big companies,” said Stoudenmire. “It’s like craft brews – big players go after the high margin businesses. As we continue to consolidate – we’re also creating product varieties that (right now) no one in my company can try. I have to take it to a dispensary so they can sell it to someone else. A retail center would help us follow the chain of custody.”
“It seems paradoxical that we allow production, and allow it to be sold into other jurisdictions, but we don’t allow retail sales here in the county,” said Baker.