'THIS ISN'T THE BEST SITUATION'

County finds interim solution for cannabis grow operations

As the state of Colorado tries to figure out exactly how to regulate
its booming medical marijuana industry, San Miguel County is
struggling with how to regulate grow operations in unincorporated
parts of the county.

For now, the county has found an interim solution for growers seeking
county approval: two will be approved and two others will have to
move, but the county will allow them to stay open until July 1, 2011.

San Miguel County's inconsistency stems from the state's uncertainty:
The Colorado Department of Revenue has until July 1, 2011 to develop
regulations for local licensees. The county has struggled with
permitting grow facilities because the state's rules are influx.

In a Board of County Commissioners meeting on Wednesday, commissioners
directed planning staff to temporarily approve two grow facilities and
work with two others with the understanding that it could all change
next summer.

With the recent legislation to regulate the industry, the state
required all licensed dispensaries to grow at least 70 percent of the
product they dispense on site or at an Optional Premises Cultivation
Operation by Sept. 1. In recent months, dispensaries have scrambled to
fulfill that requirement and many in Telluride have turned to
unincorporated San Miguel County.

County Planning Director Mike Rozycki told commissioners that there
are three pending development permit applications to allow optional
premises cultivation in different parts of the county.

While the exact location of these facilities can't be disclosed --
they're exempt from the Colorado Open Records Act to help protect a
cash crop that could become the target of robbery -- one is located in
the Ilium Industrial Park and the other two are located in Placerville
on Front Street. A fourth grow operation located on Wright's Mesa
outside of Norwood is working with the county but hasn't yet filed a
permit.

Although Front Street in Placerville is zoned for commercial
development, the two permits are raising eyebrows because they are so
close to a residential area and far away from law enforcement.

C&C Specialties, which has already been approved by the county to
dispense medical marijuana, wants to grow its product on-site in a
garage. The other permit is for a stand-alone 2,500 square foot grow
operation that would supply a dispensary in Telluride.

Rozycki recommended approving only C&C Specialties' permit because it
was attached to an already approved retail operation. He said the
second one "doesn't have the retail component" and should be asked to
relocate before it's fully permitted.

"I hate to be draconian and say 'they have to go away,'" he said. But,
the operation should have "temporary approval to figure out how they
move without huge economic loss.

"I don't know how else to explain it or try to work through it,"
Rozycki said.

Commissioners agreed that the waiting period with the state was
complicated and directed planning staff to temporarily approve the
Ilium Valley and C&C permits and work with the stand-alone operation
to come back to commissioners with a relocation plan. Staff will also
work with the grow operation on Wright's Mesa to either permit or
relocate the facility.

That facility is located on 17 acres in an area zoned for
single-family residences and limited agriculture activity. It started
out as a primary caregiver growing a small number of plants and it
expanded to a grow facility for the Telluride Green Room.

Pam Slater, a representative for the dispensary, said that moving
before July of 2011 would put the dispensary in a bad place because
legislation could change again before then.

"They want to comply, and they're willing to move to a different
spot," Slater said. "But the interim period is really challenging for
the businessaE&they want to stay in business."

Commissioners directed the county's planning department to work with
Slater and the facility's owner to inspect it for code compliance and
make sure it doesn't expand its crop between now and July 2011. The
same was said for the stand-alone Placerville facility.

"This isn't the best situation given the financial hardship we would
impose," said County Commissioner Art Goodtimes.

The county took no formal action on Wednesday, but the planning
department will continue working with the facilities and come back to
commissioners.

And in the meantime the county will just have to wait and see what
regulation the state will eventually hand down to them.

"This whole thing is a mess because the state is making it a mess,"
Goodtimes said.