Medical marijuana: More than 52 grows could still be at risk from city council, attorney says

Yesterday, the Denver City Council attempted to tackle medical marijuana regulations that MMJ attorney Warren Edson initially feared could close 137 of 150 MMJ grows in the city. The current measure, which will be voted upon by council a week from today, is no longer so draconian. But Edson says a third, and perhaps more, of the city's grow are still at risk over regs being driven mainly by land-use debates, not problems with existing businesses. Edson attended the hearing from 3 p.m. until after 9 p.m. -- and while plenty of stakeholders were heard from during that span, "there was a surprising lack of regular citizens and patients," he says. "I didn't hear complaints from regular old citizens saying these businesses are bad neighbors, and I didn't hear indications from council that they've been getting complaints. Most of the people who spoke were either with MMCs or in real estate."

From Edson's perspective, an amendment offered by councilmembers Chris Nevitt and Judy Montero "that appeared out of nowhere" was a positive development, since it should allow for "a smoother transfer of ownership for those businesses that relied on a grandfather clause." That was important, since Edson says previous language requiring no change in ownership of grows since last summer could have excluded the vast majority of grows from grandfathering.

Nonetheless, he notes, "there are still 52 grows in question -- and they kind of downplayed that. They said they weren't sure how many of them were real or speculative, but as Charlie Brown pointed out, those are still 52 potential businesses, and he said he hadn't become a city councilman to close viable businesses that have been operating legally."

And the real number of grows threatened could be more than 52. The most recent draft of the measure had narrowed the definition of drug and alcohol rehabilitation centers, which must be at least 1,000 feet away from MMJ operations, to medical offices in zoned buildings. However, Edson allows, "they said they were going back to the drawing board on the definition even though they approved the restriction. And this is another of those things where they're not sure how many businesses it might affect. I'm hoping they'll have the answer before next Tuesday's vote."

Moreover, Edson continues, "the fees are still crazy. They're going to charge $3,000 for an infused product manufacturing license for the city and $3,000 for a grow license, where the state only charges $1,250. And despite questions from [councilman and mayoral candidate Doug] Linkhart, there wasn't an answer as to why it's more than double what the state's charging. Are they planning on doing twice as many inspections? Are their employees costing them twice as much? Are their employees twice as bad? Why would the city charge twice as much to inspect the same facilities?

"The state seems to be saying that they're getting more in fees than it's costing them in expenditures, and yet the city doubles the price of the licenses? I didn't think they were supposed to be trying to make money off licenses..."

Another rub: a clause that says for so-called optional premises cultivation operations, or OPCOs, to be grandfathered, growing must have been underway no later than January 1, 2011 -- "and last night, we heard from someone that's going to penalize," Edson maintains. "They spent the past year making the place perfect, going above and beyond, following all the zoning rules and waiting properly for inspectors instead of going ahead and starting to grow. And now they could be punished for doing things the right way. If they'd done things half-assed, they would have been fine, but now they look like they're going to be bit in the butt."

Also in attendance at the session was Susan Barnes-Gelt, a former city council member who's now a paid consultant for Zeppelin Development. In conversations with Westword, numerous members of the medical marijuana community have suggested that Zeppelin has been the driving force behind many of the council's attempts to restrict or limit grows, and Barnes-Gelt hasn't been silent on the topic. In an October 2010 op-ed for the Denver Post, she argued that the council's grow policy could impact "emerging neighborhoods" such as River North, where Zeppelin Development owns a twenty-acre TAXI site.

Adding to the confusion was an appearance by Curt LeRossignol, who defended his decision to lease space to MMJ growers in a building along Brighton Boulevard "that's been a concern of Ms. Barnes-Gelt and the Zeppelin group," Edson says. At that point, Brown and Montero presented dueling letters about whether or not LeRossignol had or hadn't threatened to reconsider donating land for a park if the growers were expelled.

Amid this battle of developers, council approved a two-year review of grandfathered grows, after narrowly defeating Linkhart's attempt to stretch the time period to four years.

In the end, Edson believes the latest bill "is better than it was -- and it's nice to see Ms. Montero work toward a compromise on fixing the license transfer. But because the state is developing its rules for the industry, it's forcing people to formulate and re-formulate their businesses. That's what's doing on at the Department of Revenue right now. They're saying, 'This works' or 'This doesn't work, and you guys have to rework what you're doing' -- and that could dramatically affect grandfathering.

"It's not all gloom and doom. It's a step in the right direction. It's just not a step far enough, especially given that the vote's next week."

More from our Marijuana archive: "Medical marijuana code proposed by Denver City Council contradictory?: Read bill here."