The city of Colorado Springs will commit “economic suicide” if councilors approve a six-month moratorium on new or expanding medical marijuana grows and dispensary changes on second reading during next week’s City Council meeting, said a local attorney familiar with marijuana law.
“It’s free money, but yet we have more potholes than any other town around,” said Colorado Springs attorney Chris Samuelson, whose practice includes marijuana cases.
A moratorium approval could put some medical marijuana firms out of business, he said.
“Some of these people who have legally tried to invest in this industry in our ‘business-friendly city’ will soon be visiting bankruptcy attorneys, thanks to the City Council,” he said.
By a 5-4 vote Oct. 13, Council approved the first reading of an ordinance that would specifically affect the city’s medical marijuana industry. It would restrict the city’s planning department until May from approving new cannabis businesses to open or allow any operating grow operation or store to move or expand. The second reading of the ordinance takes place Tuesday, Oct. 27.
Peter Wysocki, city director of planning and development, said the six-month timeout would allow the city to review zoning and determine if any business models could pose a safety threat or public nuisance.
“Manitou Springs is laughing all the way to the bank, as is Pueblo, Denver, Breckenridge,” Samuelson said. “Our city just doesn’t seem to understand … or maybe the city doesn’t need the money. We’re really becoming the laughing stock of the state in reference to the cannabis industry. To me, it’s a matter of economics.”
The marijuana industry is one of the most regulated in the state, said Colorado Springs attorney Cliff Black, who represents proponents of the industry.
From “seed to sell,” the products are tracked meticulously. “Every plant and all products must be on camera at all times. The growers must disclose every day how many plants they have, the stages of those plants, their inventory, their daily sales, the number of patients they have,” Black said. Further, the businesses and grow operations are subject to regular inspections by state and city governments. “Their books are open to inspection at any time.”
If approved, the moratorium could cause the Randy Tuck family to lose its business after having operated legally for five years, he said.
Tuck operates Kind Therapeutics, a medical marijuana retail shop at 1222 N. Academy Blvd. The store sells marijuana, edibles, concentrates and more. Kind Therapeutics is a small business; it is allowed only 299 or fewer clients. Last year, the store made close to $300,000 in sales, Tuck said.
State law requires all medical marijuana stores to grow at least 70 percent of the products they sell.
Kind Therapeutics has its grow operation near Palmer Park Road. Its lease to the grow property has come due, and its owner will not renew because of his plans to operate another company there, Tuck said.
That puts the Tucks in a potentially “grim situation.”
If Council approves the moratorium Tuesday, the Tucks would need to find an appropriate building with a willing landlord, complete city and state licensing requirements, obtain a permit to remodel the building, complete construction and have the certificate of occupancy immediately, “which is almost impossible,” Tuck said.
“Maybe the city doesn’t need the money.”
– Chris Samuelson
“We’re going to have to close our doors,” he continued. “If they don’t allow us to get into another location in a timely manner, it’s very possible we’ll have to close.”
The city’s new mayor and councilors promote the city as business-friendly, yet “people in the cannabis industry are in one of the most hostile areas for business in the state,” Samuelson said.
Samuelson said he had two clients poised to spend $2 million in real estate to open and expand medical marijuana businesses in the city.
One had investors lined up to expand his business, but after the City Council’s first reading, they abandoned the owner, “and his business is running at capacity. All these businesses are doing it at capacity,” the lawyer said.
“Any other industry … I don’t care if it’s alcohol, or a restaurant, a florist … every one of those businesses offers a service to Colorado Springs,” Tuck said. “There isn’t one of those businesses that has put into the Colorado Springs economy what medical marijuana has.
“Yet every one of those businesses is able to expand. They’re left alone to run their businesses. They’re not singled out for rules and regulations that may put them out of business, just because somebody doesn’t happen to like the industry. [The city doesn’t] mind taking our tax money, but when we need them on our side of the fence, they’re not there for us.”
Samuelson said many people have invested “their savings, their retirements into what is in this state a legal business enterprise” that would not be allowed to grow if the moratorium passes.
“This one heavily regulated industry has been targeted, when these people are paying taxes, working with the state and city and doing everything they can to be as legal as possible,” Samuelson said.
The marijuana industry has been discriminated against by people from the “Reefer Madness era of thinking,” Black said, referring to the 1937 “propaganda film put out by the government that really exaggerated the effects of marijuana on people.”
Once people open their minds to learning more about THC, the active component in cannabis, he said, they will begin to see the medicinal benefits.
“It is an intoxicant, but it’s extremely mild in comparison to alcohol, cocaine, heroin, meth and even prescription narcotics. Nobody has ever had a fatal overdose of marijuana in the history of mankind,” Black said.
Proponents of the moratorium say the city needs time to provide proper zoning rules and requirements for medical marijuana businesses. Councilor Don Knight, who introduced the ban, said residents and business owners close to medical marijuana stores and grow operations have little recourse if they are unhappy with the businesses. Supporters believe six months will allow enough time to form a task force, meet with stakeholders and review ordinances. Wysocki said the moratorium was actually pro-business, stating it would prevent a new business from opening, only to find it was noncompliant within months.
Colorado voters approved legalizing medical marijuana in November 2000. Since then, the legal industry has experienced a “boom,” Samuelson said. “There’s business from business owners, to caregivers, to licensing issues to regulatory issues, to criminal involvement, to contracts and business formations. It has touched just about every area of the law.”