Welcome to Colorado's First Cannabis Ghost Town

Gravel crunches underfoot on the sun-cooked Maverick Lane, whose addresses don't exist in Google Maps. Tumbleweeds roll by abandoned buildings and faded real estate signs. A few doors are open, allowing passersby to peer inside the vacant warehouses. At one of the largest buildings on the unpaved road, the roof is starting to show holes.

"I've seen equipment left out in fields by people who couldn't figure it out, and entire crops left to dry outside. No one has to worry about it being stolen. There's barely anyone here — and what is it really worth, anyway?" asks Chris Kaiser.

Kaiser, the founder of cannabis cultivation Bubba's Kush, can throw a rock from his parking lot and hit one of a half-dozen failed cultivations. "That one's closed. That one's closed. That one's closed," he says. "A lot of people have just up and left. One guy is asking for $1.3 million. Ha — good luck with that."

Ordway, Colorado, could be America's first cannabis ghost town.

The town of just over 1,000 people, located about fifty miles east of Pueblo in Crowley County, had 56 active growing facilities at its peak. By the end of 2022, around seventy grows there were registered with the state Marijuana Enforcement Division. Less than a year later, however, Ordway was home to about twenty operating cultivations, according to local licensing officials.

As Colorado marks a decade of recreational cannabis sales, Ordway isn't alone in its cannabis-industry woes. From December 2022 to the same month last year, the number of recreational marijuana growers registered in Colorado went from 789 to 621, a decline of over 21 percent. That mirrors a 30 percent drop-off in the state's cannabis workforce and steep decreases in dispensary sales since pandemic restrictions ended.

Even the popular brands are treading water instead of trying to expand. Bubba's Kush had won a handful of awards and gained a loyal following in just two short years, but Kaiser admits that he and his seven-person staff are in survival mode right now. Every month he sees fewer cars and more vacated properties around Maverick Lane as wholesale cannabis hits some of the lowest prices ever seen in Colorado, according to the state Department of Revenue, falling over 56 percent on average since Kaiser's first harvest in 2021.

"Even if you're still open, you're struggling. Being a cannabis grower was never all it was cracked up to be, but this is getting out of control," he says. "I guess this is what it takes if you want to win. It's a tough scene, and I don't think it's going to get any easier."

When the first licensed recreational marijuana sale in American history took place at a Denver dispensary on January 1, 2014, Colorado's cannabis industry was looking at a bright future. Sean Azzariti, the legalization activist and ex-Marine who made the purchase, remembers the chaos fondly.

"I don't even know if I could wrap my head around it all. It was such a new thing back then. Having been in the medical marijuana industry a couple of years before it went recreational, it only seemed like it was going to continue to grow and that everyone in this industry was going to flourish," recalls Azzariti, now a cannabis lab chemist. "It seemed like the only way to go was up." The dispensary at which Azzariti made the highly publicized purchase, 3D Cannabis, has since been sold and rebranded twice. The current owner is JARS Cannabis, a multi-state dispensary chain based in Michigan. When JARS purchased the dispensary from the previous owner, Euflora, the Michigan operation also gained control over Denver's annual 4/20 festival in Civic Center Park.

Azzariti, who now conducts various post-production tests on commercial marijuana, says he is thankful to work in the cannabis space and that "living in Denver is still great." But he believes that the "quality has tanked" in Colorado marijuana cultivation, and that the state's cannabis culture has been diluted as recreational legalization spreads across the country.

"It happened quick. Colorado was genuinely a boom town for ten years. You can kind of see now that it has become a race to the bottom," he bemoans. "One thing that really bums me out is that you really don't see any of the mom-and-pop dispensaries around anymore. There were so many dispensaries that were family owned five or six years ago. Now when you look around, you see more dispensaries, but it's a lot of the same store signs."

Marijuana business consolidation ramped up in Colorado following the loosening of state financial and ownership restrictions in 2019. A market downturn was likely, suggests longtime activist Mason Tvert — but then came the COVID-19 pandemic.

Tvert, a campaign organizer and one of the main proponents of Amendment 64, the legalization measure passed by voters in 2012, is now a partner at cannabis policy consultant firm VS Strategies. "It's been a unique period of time for all businesses, especially cannabis businesses," he says. "Inflation, COVID-19 and staffing have all created real issues, so I'm not terribly surprised with how it's played out. Anyone who's looking at this industry should be wary of the potential for dramatic changes. With something this new and varied around the country, there are a lot of people who just want to open a marijuana store because it's exciting, fun or unique. As people were doing that, though, we sort of realized that ten years from now they would be owning a liquor store, but with more rules."

On the verge of a market dip in 2020, Colorado's marijuana industry was instead lifted by unanticipated dispensary traffic during the pandemic. Average wholesale prices for a pound of marijuana reached nearly $1,800 in 2022, according to the DOR, while dispensary sales broke $2.2 billion that year. Most Colorado growers expanded in light of the record-breaking numbers, and new operators planted seeds in hopes of making gold from green.

Kaiser was one of those new operators, though he didn't consider himself one of the big-dreaming potrepreneurs that Colorado used to attract in droves. An Illinois native, Kaiser had started growing cannabis as a hobby before pursuing his passion in Colorado's legal arena. After looking around the state for a place to build his cultivation, he settled on Ordway in 2020, building a 12,000-square-foot indoor facility right off Maverick Lane.
He named his company Bubba's Kush after his blue-nosed pit bull terrier, Bubba, who's stayed by Kaiser's side from the days when his hobby was a bit more underground to the long nights he now spends tending to the grow. "There isn't a whole lot of magic to the growing part of it: just following the whole 'cleanliness is godliness' thing. I also don't have kids, so when shit hits the fan, I'm often here until 10 at night," Kaiser says. "But I came into this during the worst possible market, so I've had to work hard to make this happen. I'm not some business visionary; I'm a grower. Words are not what I'm used to working with."

Even so, Kaiser has ventured out into Crowley County to meet his neighbors and local county commissioners; he's even spoken at state regulatory hearings over the past year, keeping track of topics such as new grower regulations and licensing fees. He's participating in seminars to help new commercial growers and expanding into extraction partnerships, a common step for rising stars in cultivation.

Because growing good weed isn't enough anymore.

Amendment 64 gave local governments the choice of opting into commercial marijuana. Ordway and Crowley County took the plunge in 2016.

Developers looking to cash in on the surging pot industry started eying the Maverick Lane industrial area, which spans several thousand acres in Ordway and unincorporated Crowley County. Greenhouses, warehouses and outdoor marijuana farms began sprouting up within the year. Plots of land sold at a steady pace, many of them developed by Crowley County Improvements LLC and Dean Hiatt.

The pandemic boosted business — but then came the drop.

"It was pretty fast. The biggest spike was during COVID. But just as soon it all happened, we starting seeing the closures," says Crowley County Commissioner Roy Elliott. "We all get a little greedy now and then, and this time it kind of bit us in the butt."

Even with the industry recession, however, Elliott estimates that Crowley County has made around $5 million from cannabis taxes and licensing fees; that revenue has gone to new trucks for the sheriff's department and investments in the Crowley County Heritage Center museum and banquet hall. It's also allowed the county to increase staff salaries and pad the county's reserve fund.

Elliott and his fellow commissioners are now exploring other businesses that could potentially move into the abandoned marijuana operations, and they've reached out to the MED to see if statewide marijuana licensing restrictions could be implemented to help increase the price of wholesale marijuana.

"There are a ton of options we've looked at, but there is very little you can put in these greenhouses and hoop houses, because most agricultural products can't keep up with the costs. These are multimillion-dollar facilities. Maybe a few could be turned into warehouse manufacturers," Elliott explains. "So far, though, the marijuana industry has been helpful to the county. Those guys are still out here working and paying taxes, and they need to get their gas from somewhere. It's still helpful — not as much as it used to be, but still helpful."
Hiatt has been hit with multiple lawsuits, including one from Crowley County Improvements, over claims of bogus land sales and misleading property valuations. While Kaiser says his agreement was honored, other growers have taken Hiatt to court.

Hiatt could not be reached for comment, but the empty properties speak for themselves.

"I thought we were going to get rich," recalls Nathaniel Eaton, co-owner of outdoor pot operation Stargazer Farms, which started in Ordway in 2020. Instead, says the former electrician and sales professional, "back when prices were at their worst, we had to take money out of the bank to survive. We're going to keep going as long as we can."

Humble Farms, another growing operation in Ordway, had more experience and tempered expectations after its first harvest in 2019. But that foresight hasn't given father-son team Jon and Ben McIntosh a much rosier outlook.

"We got a good first year under our belt, and prices were pretty good until around September 2021. That's when they started crashing. We're glad to still be here and have seen some recovery, but when you drive around here, it's a ghost town," Jon McIntosh says.

He had a $6 million expansion mapped out for Humble Farms in 2021, but "that plan worked at $1,500 a pound, not $500." And even if cannabis prices reach their past glory for growers, he's worried that "everyone will jump back in again," he says.

"We were told that if you build it, the Philip Morrises of the world would come in and buy us out for millions. Some lots sold for as high as $400,000 out here at one point," McIntosh adds. "I still think there are people who believe if they get in the marijuana business, they'll be rich. There are still some suckers out there."

Colorado doesn't have any statewide limits on the number of cannabis businesses, although local governments are allowed to enact them. Until the supply comes down enough to meet demand, Kaiser and the McIntoshes would like to see a licensing limit on new growers at the state level. Reassessing Colorado's current 15 percent excise tax and licensing fee structure as more states go online with more competitive tax rates is also a conversation they'd like to see started, but they're not as optimistic about that one.

Still, there are smaller issues that could be addressed and save growers big money, they argue. Colorado requires that tracking tags, at an estimated cost of 45 to 70 cents per tag, be placed on each plant, with most cultivations having thousands of plants at any given point. The MED has promised to look into new tracking rules that could heavily cut back on the number of tags needed, but such a move wouldn't take place until next year at the earliest.

"What other industry has to pay 15 percent off the top?" McIntosh asks. "I think it's time to rethink how this industry is regulated, or Colorado is going to fall behind the rest of the country."

Despite the downturn, Colorado's ten years of legalized cannabis have brought plenty of benefits, according to Tvert, who's advised cannabis advocates and policy writers in other states since 2014. He's proud of the marijuana criminal justice reform Colorado helped kickstart, and points to the considerable amount of marijuana tax revenue the state has collected since 2014, currently at around $2.6 billion.

With over half of the country's population located in states that now have recreational dispensaries, however, Tvert thinks it might be time to have some "honest conversations" about Colorado's pot policies and cannabis tax structure, including that 15 percent excise tax on every pound growers produce for recreational sales, and dispensary sales taxes ranging from around 20 to 30 percent, depending on the local government's additional rates.

The state tax rates were put in place over ten years ago, shortly after Amendment 64 passed. "I certainly think we saw some questionable decision-making in terms of planning around these taxes and the assumption that the money would only grow. I also think we've seen a tendency to look toward the cannabis industry as a tax revenue piggy bank that it was never intended to be," Tvert says. "The idea was to have reasonable taxes that would cover the cost of regulations while also bringing some benefit to localities allowing these businesses as well as the rest of the state. There are a lot of conversations that need to take place around interstate commerce and what's needed to grow, and some of that has already started."

After receiving a favorable recommendation from the U.S. Department of Health and Human Services, the Drug Enforcement Administration is currently considering the rescheduling of cannabis from Schedule I to Schedule III, which could legalize the plant on a limited federal basis; Senator John Hickenlooper and Governor Jared Polis say they expect the DEA to approve the rescheduling at some point in 2024.

If and when that happens, Colorado "still has the ability to be among the leading states" in cannabis culture, Tvert says, but whether state lawmakers want it is debatable, he adds.

"Oregon still wants it. Does Colorado have the most effective or efficient cannabis laws? Not necessarily, although it does in some areas, but it has been the first to have these discussions," Tvert points out. "Even in areas it's not leading on, like social use, Colorado was still the first to initiate those conversations. Cannabis is widely available here, yet for some reason it's still being kept out of the cultural fabric of the state, and that is to its detriment."

Like Tvert, Azzariti hopes to see state lawmakers change with the times as marijuana becomes more mainstream — and part of that change should address the lack of cannabis-friendly venues and events in Colorado.

"Around 2017, when they stopped allowing cannabis cups and cannabis-friendly events in Denver, I think that really hurt the cannabis tourism here and cut down on people wanting to visit Colorado to experience legal cannabis," Azzariti says. "It definitely hurt the culture. We still don't have a place for people to go, and that's what really hurts us. Their options are to smoke weed in their hotel rooms, rental cars or go on a hike."

While pot-friendly events and venues might help overall demand in Colorado, dispensaries still managed to sell over $2 billion worth of marijuana products in 2021 and 2022, and the state's annual tally for 2023 is expected to break $1.5 billion. That's a lot of money for a flailing industry, and someone has to make it. Why not a county where the only employers of note are public and private prisons, and the largest town barely breaks the 1,000-population mark?

"If we get five good years and put $5 million in the county's bank account, that's a win for us. And then we have to look for a Plan B or C, whatever is next for us," says former Crowley County commissioner Tobe Allumbaugh. "We're about to be there, but marijuana has been very good for the county financially, just — like the rest of the state — not as good as it used to be."

Now the county's cannabis business liaison, Allumbaugh pushed for Crowley County to allow marijuana businesses in 2016. And even if that industry ultimately falls flat, he views it as a financial victory for the rural communities that embraced it.

"Starting off with the license, and then you have the excise tax, and then you have license renewal, the sales tax on the utilities and property taxes. When you add all that together, it's pretty good. Even if they don't grow, they have to buy a license, and property tax never goes away," he says. "Collectively, that's pretty nice for a place the size of Crowley County."

Nice while it lasted.

It takes about fifty minutes to drive east to Ordway from Pueblo, where Kaiser and much of the town's marijuana workforce live. During the commute, they pass a gated lot on State Highway 96 where North America's largest outdoor marijuana cultivation used to sit.

Vacant since early 2023, Los Sueños Farms was most recently owned by corporate cannabis giant Curaleaf, which has essentially abandoned Colorado for business. Colorado isn't the only state that Curaleaf and other publicly traded pot companies are leaving, but the current market is less attractive to big money — not that it's very attractive to small money at the moment, either.

"I've put real blood, sweat and tears into this. This is not a spreadsheet, and I have employees who depend on me. People don't know how hard it is to stay afloat in cannabis," Kaiser says. "There is no glamour right now. This is one hard fuckin' job."