BASALT DENIES REQUEST FOR MARIJUANA DISPENSARY

Town Staff, Applicants At Odds Over The Review; Decision Will Be
Appealed To Town Council

BASALT -- The town government has rejected an application from a group
of businessmen to reopen the town's only medical marijuana dispensary
and start a pot farm.

Town Manager Bill Kane notified the owners of Basalt Alternative
Medicine (BAM) on Thursday that they were out of compliance with five
town requirements for opening a dispensary. The application process is
"black and white" and BAM officials didn't provide adequate
information on several major points or couldn't comply, according to
Kane.

"We felt there were major holes in the application," he
said.

BAM partners accused the town of playing politics with their
application and said they will exercise their right to appeal the
staff decision to the Town Council. A hearing could be held as soon as
Tuesday, Sept. 14, the council's next scheduled regular meeting.

"We believe this entire process has been a process that's been
contrived," said BAM partner and spokesman David Schoenberger. "We
feel Bill Kane and [Town Attorney] Tom Smith have done everything in
their power to put roadblocks in front of us."

Kane responded that there were "no clever interpretation of rules" by
town staff. Smith said he advised the town staff on legal issues
surrounding the application, but it is not his duty to make the
ultimate decision on accepting or rejecting the application.

BAM wants Smith off case

Schoenberger said even before the town reached its decision Thursday,
he asked Kane and Basalt Mayor Leroy Duroux to have Smith removed from
working on the application. Schoenberger believes Smith holds a grudge
against him over a land-use fight involving the W/J Ranch affordable
housing proposal roughly a decade ago. Smith was the attorney for the
Aspen-Pitkin County Housing Authority, a position he still holds.
Schoenberger said he feels his prior contact with Smith could affect
the processing of the application.

A letter to the town by Doug Olson, a BAM partner and its chief
operations officer, said the town must strongly consider that Smith be
prohibited from working on the application. The letter was sent in
response to the town's denial of BAM's application. It suggests Smith
might have offered "personal opinions rather than just the legal facts."

Smith said Tuesday that Schoenberger and Olson are throwing out
allegations without offering any facts. He said there was no outcome
in his previous dealings with Schoenberger that left him with a grudge
against the man.

"I have no ax to grind in this matter," Smith said. "The only person
here who is agitated is Mr. Schoenberger."

Further, Smith said it would be "professional suicide" for him to
taint the legal advice he offers the town government over his personal
feelings -- something he wouldn't do to jeopardize a 35-year career in
law. It would ruin his credibility and threaten his license, he said.

And finally, Smith said, the BAM partners are making false assumption
about Smith's role in the process. As the contract town attorney, he
advises the staff and council on points of law surrounding issues, not
on how to apply the advice.

"The idea that I am driving this decision is false," Smith said. "This
is a decision of the town staff."

Decision made at the bell

The two sides offer differing accounts about the town's handling of
the medical marijuana dispensary. The applicants feel the town should
have been more upfront about the problems that allegedly exist with
the application so they could have had time to react.

Kane said BAM was given time to correct problems, but that some issues
weren't corrected and some couldn't be corrected.

BAM applied June 30 for a license to operate Basalt Alternative
Medicine in the former WIN Institute building, where a different
dispensary operated until about five months ago under a different
name. Olson and Schoenberger are listed as owners, along with Dr.
Jason Slaver. [Slaver was incorrectly identified in a previous article
about the application.] Other investors are waiting to get involved
after a license is acquired.

Basalt had 60 days to render a decision or the license was
automatically granted, Kane said. He said town staff did seek
clarification on various matters during the review and that there was
an "absolute lack of politics" in the process.

Olson's letter contends town officials, including Kane, talked to BAM
owners and attorneys on numerous occasions, but never informed them
prior to the denial that there were major issues with the application.
Schoenberger said the five issues used for denial were
"inconsistencies" that could have been handled easily if town
officials had worked with them.

"This entire process has taught us that the town's behavior, in
attempting to thwart this application in the way they have, is
disheartening," Olson's letter says. It later adds, "As longtime
members of this tight Basalt community, where people truly try to help
one another succeed in their endeavors, that was difficult to stomach,
Bill."

Kane said despite the applicants' attempts to couch the issue in terms
of politics and getting along in a small community, it really boiled
down to a lack of information in the application.

Reasons for denial

The five points the town earmarked for denial and BAM's response
follow:

- - Legal right to use the premises -- The town regulations say a
dispensary must have a lease for the same amount of time as the
license requests, one year in this case. BAM's lease at the old WIN
building expires at the end of November, so it doesn't comply.

BAM said is could have produced an amendment to its lease showing it
had a right to renew.

- - Zoning -- Town rules require a dispensary to be in a medical center
occupied by at least six licensed professionals. The old WIN site has
only two, by the town's count.

BAM responded that the building is zoned as a medical center and that
more than two medical professionals are using it. A
multimillion-dollar MRI machine located there is used by multiple doctors.

"But mostly, we do not feel we should be responsible for the rent
rolls in the building -- that is preposterous," BAM's letter says.

- - Ownership and financial interests -- The town contends BAM has more
members than the application identifies.

BAM says it has investors who will commit once the license is in
hand.

- - Medical marijuana farm -- A request for a wholesale growing facility
was denied because it is not permitted in the zone district around the
dispensary.

BAM wants an expansion of the areas where a farm can be
located.

- - Surveillance system -- The town says the system is not operational
and is missing two cameras.

BAM says that's easy to remedy.

The council will ponder those issues in the appeal hearing.
Schoenberger said in the meantime his group is losing at least $800 in
revenues per day from being closed.