For Local Pot Growers, Ouray County’s Lukewarm Embrace May Be Too Little, Too Late

08/21/14 | By | 165 More

OURAY COUNTY – As local officials continue to grapple with how to regulate the pot growing industry, the proprietors of Ouray County’s sole grow facility say they are in limbo, and may need to expand to greener pastures elsewhere on the Western Slope. 

Grand Mesa Growers, also doing business as Acme Healing Centers, is the proud owner of a 12,000-square-foot greenhouse just south of Ridgway, which it built to grow medical marijuana just before the county adopted a resolution banning such enterprises several years ago. 

The grow facility is thus grandfathered in as a legal non-conforming use in Ouray County, as long as it remains in compliance with the laws and regulations of the State of Colorado. 

Until this year, those laws and regulations allowed Acme to grow plants only for patients serviced by its three dispensaries. Then, in January 2014, with the full implementation of Amendment 64 and its provision for retail marijuana, Acme’s pool of potential customers grew exponentially. 

Today, Acme grows dozens of strains of marijuana at its Ouray County grow facility to supply its three medical marijuana dispensaries and two retail pot shops in Ridgway, Crested Butte and Durango. The company, riding the crest of Colorado’s booming marijuana industry, is poised to further expand retail operations into new markets across the Western Slope. 

Acme is growing in other ways, as well. Since January, it has expanded from nine full-time employees to over 30, the majority based in Ouray County. “And we are looking at doubling or tripling the company from there,” Acme Manager David Niccum said.

Acme’s relationship with Ouray County has always been a somewhat delicate dance. Most recently, the company’s grow operation was curtailed by a one-year moratorium on retail pot and its cultivation, passed by the Ouray County Commissioners in August 2013. 

Under the terms of this moratorium, the county allowed Acme to divert a portion of its permitted 2,600 medical marijuana plants to retail pot, but did not allow the company to grow any additional plants. 

So Niccum and Acme owner Chris Sanchez were taken by surprise earlier this month, when the Ouray Board of County Commissioners moved unanimously to begin developing proposed new regulations that would lift the moratorium and allow limited marijuana grow operations in at least some parts of the county.

“Essentially, it was a 180-degree turn and we didn’t know that it was going to occur,” said Sanchez. “We were looking to develop other grows in other counties for our expansion. Now we are studying this to see where [Ouray County] goes. We are in a hard place. We are kind of tossed up on which way to go.”

The county’s decision was a mixed blessing as far as Acme was concerned.

In order to give staff time to develop the new regulations, the commissioners adopted an ordinance extending the existing moratorium until February 2015, dropping the limitation previously imposed on Acme pertaining to the number of plants it could grow. 

Per the terms of the State of Colorado’s regulations, Acme is now permitted to grow up to 7,000 plants. The problem is, under its current grandfathered-in status within the county, Acme can’t build a bigger greenhouse here. Its existing grow facility is maxed out, with just 2,600 plants – producing barely enough pot to supply its existing shops, let alone proposed new ones.

“Fifty-thousand square feet, 100,000 square feet, that’s where we want to go,” Sanchez said. “We need to be five to ten times larger than we are now. The bottom line is, we are a growing company and we need room to grow.”

As the county contemplates lifting its pot growing moratorium early next year, it is possible – perhaps even likely – that Acme will be able to build some kind of a new grow facility in Ouray County in the near future. But there are still huge questions as to whether or how this will occur. 

In the midst of all this uncertainty, Acme has begun the process of acquiring property on which to build a sprawling new greenhouse in Gunnison County (which started taking marijuana grow applications just last month). 

Niccum and Sanchez agree that the ideal place to expand their grow operation is in Ouray County, at their current location. Even so, the company may move ahead with its planned expansion into Gunnison County. 

“We need to break ground [on a new greenhouse] before things freeze, to be ready to start facilitating planting in April,” Sanchez explained.

“That’s where the decisions are hard, and gut-wrenching,” Niccum added. “We appreciate everything the town and county is doing. We totally are on board with what they are trying to do. But the timing is just so critical.”

Ridgway’s Growing Dilemma…

Meanwhile, the Town of Ridgway’s quest to regulate marijuana cultivation within its own jurisdiction took a new turn last week, as the Ridgway Town Council scrapped a proposal to amend the town’s water rate structure, which would have had the effect of discouraging thirsty large-scale marijuana grow operations from guzzling hundreds of thousands of gallons of municipal water.

Rather than providing a financial incentive for water conservation, council took a different tack, opting to limit the size of potential marijuana grow operations within town limits by tying into the state’s tiered system of licensing. 

Under this new approach, nothing bigger than a Tier 1 marijuana grow operation (limited to 3,600 plants or less) would be allowed to come to town. 

No commercial-scale grow operations currently exist in Ridgway, but the town’s pot-friendly stance has attracted the attention of plenty of potential growers, including one who inquired earlier this summer about setting up a marijuana greenhouse that would consume up to 50,000 gallons of municipal water every other day.

A new town ordinance, introduced for adoption in July, would have nipped that weedy specter in the bud, by prohibiting the use of municipal water for any agricultural purpose within the Town of Ridgway. But after discussing the matter in depth, council decided to send the ordinance back to the drawing board, declaring it rife with unintended consequences (including potentially putting an existing garden center out of business.)

Staff drafted a revised ordinance in its place and introduced it for first reading at its Aug. 13 council meeting. This version incorporated a financial incentive to encourage water conservation in marijuana grow facilities, by calling for commercial agricultural water users within the Town of Ridgway to pay a tenfold premium if they use more than 40,000 gallons of water per month.

But through the course of a labyrinthine discussion, council determined that this ordinance, too, would unfairly penalize some forms of businesses (pot greenhouses and garden centers), while still allowing others (such as restaurants and hotels) to consume large quantities of water.

Ridgway resident and attorney Andy Mueller objected to council’s attempts to swaddle the town’s nascent municipal marijuana grow industry in layers of new regulations, and wondered why council would want to “throw up hurdles for one of the more productive industries in our town.”

Mueller said he had several clients in the marijuana industry, “none of whom are wanting to come anywhere near this town,” because of the way council has been attempting to regulate water usage for marijuana grow facilities. 

He warned council against “creating regulations just because you don’t know what is going to happen, versus creating great regulations that are narrowly tailored for a problem you know exists.” 

Mayor John Clark responded that the reason council was considering preemptively adopting new regulations was because “we were duly frightened” by the inquiries of seemingly water-greedy commercial weed growers. 

“We want to make sure we are protecting our most precious resource from a use that could have huge impacts,” Clark said. “Everything about this endeavor is so unknown; we are just trying to make sure we get this right.”

In the end, after almost scrapping the entire ordinance and going back to the drawing board yet again, council agreed to instead amend it, adding the Tier 1 provision limiting grow operations within town limits to 3,600 plants, and taking out the provision that would have changed the water rate structure to penalize commercial agricultural water users. 

The ordinance includes provisions to limit the number of marijuana cultivation facility licenses issued in Ridgway to two, and to further restrict these licenses by requiring that they be issued only to a retail marijuana store licensee or marijuana product manufacturing facility licensee located within the town, as well as a provision regulating the wastewater generated by such facilities.  

Council also agreed that marijuana grow facilities must pass a “smell test” ensuring that the odor emanating from them does not pervade the town.

The ordinance is up for second reading and final adoption at the Ridgway Town Council’s next meeting in September.

A Joint Work Session With the County…

In addition to its efforts to regulate marijuana cultivation within its own jurisdiction, the Ridgway Town Council has also been actively trying to push the industry back out into the county, recently making the case to the Ouray Board of County Commissioners that marijuana cultivation is more appropriately suited for county implementation on traditionally agricultural land, with its accompanying water rights.

It was partially thanks to the Town of Ridgway’s prodding that the commissioners passed their recent ordinance that could lead to the end of a county-wide moratorium on marijuana cultivation by February 2015.

Last Wednesday afternoon, council and commissioners held a joint work session to further discuss the matter.

“There is a lot of pent-up desire among grow facilities to meet growing demand, and it seems town isn’t the logical place for it to happen,” Mayor Clark emphasized. 

Ouray County Commissioner Don Batchelder said he didn’t thing there was any “huge resistance” to commercial pot cultivation at the county level, but that the development of a licensing authority, and the potential costs to the county in terms of enforcement, were real concerns. 

Commissioner Lynn Padgett added that she was worried about the potential development of a monoculture as marijuana becomes “a more and more significant cash crop.” As a result, she warned, agricultural property values in the county could go “so sky high” that traditional ranchers would be priced out of doing business. 

“I have a huge concern about totally opening the floodgates without some measure to protect the values laid out in the current master plan,” she said. “We can offer additional grow operations in the county as long as they are done very carefully and are scalable and not selling away our souls.”

swright@watchnewspapers.com or Tweet @iamsamwright

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