SAN MIGUEL COUNTY TO PERMIT TWO MEDICAL MARIJUANA GROW FACILITIES

Fates of Two Others Still Undetermined

SAN MIGUEL COUNTY -- The San Miguel County Commissioners last week
directed staff to process development applications for two commercial
medical marijuana grow operations in unincorporated areas of the
county, while the fate of two more remains unclear.

The move came as the county grapples with developing an interim policy
to regulate applications it has received for "optional premises
cultivation operations" in the wake of the passage of the Colorado
Medical Marijuana Code by the Colorado General Assembly in June.

"It has been challenging, how to come up with a fair and reasonable
policy on medical cannabis," County Planning Director Mike Rozycki
told the commissioners.

Much of the confusion comes from the new law itself, which requires
local and state licensing approval of medical marijuana-related
facilities. But local jurisdictions have yet to develop their
requirements and have until July 2011 to do so. At the same time the
state has not put its own rules in place, leaving uncertainty over how
to deal with immediate issues at hand.

Because the county does not yet have any land use codes or other
regulations specific to the medical marijuana industry in place, the
B.O.C.C. in April enacted a temporary emergency moratorium on
businesses selling or distributing medical marijuana to the public in
the county's unincorporated areas. The purpose of the moratorium was
to allow the county time to determine the effect of the state law that
was pending at the time.

In June the county granted exceptions to its moratorium to Delilah
L.L.C. for on-site cultivation and sales of medical marijuana in the
Ilium Industrial Park, and to C&C L.L.C. for the sale of medical
marijuana in a small retail store offering arts, crafts and
alternative health remedies on Front Street in Placerville. Both were
located in zone districts considered appropriate for their proposed
activities and so deemed consistent with the county Land Use Code.

But the language contained in the temporary moratorium did not
specifically address those who might be growing or cultivating medical
marijuana. The county assumed small growers would be licensed by the
Colorado Department of Public Health and Environment to cultivate a
limited number of plants for their personal use, or as caregivers
growing a limited number of plants for a limited number of patients.

In fact, the C.M.M.C. actually required businesses seeking state
licensing to certify that they were cultivating at least 70 percent of
the medical marijuana necessary for their operations on or before
September 1 of this year.

As a result, many local medical marijuana dispensaries -- or medical
marijuana centers as they are now called in the state law -- were sent
scrambling to find suitable locations for off-site cultivation
operations in order to be compliant.

Of three new grow facility applications and one application supplement
filed with the county, one is on track for approval in the low
intensity industrial-zoned Ilium Industrial Park, where commercial
growing nurseries and greenhouses are already allowed uses, and
Delilah LLC has already been permitted.

The lots there have the additional benefits of being relatively close
to the County Sheriff's Office, a significant plus for a policy that
attempts to strike a balance between the needs of the applicants while
at the same time protecting the surrounding areas (where law
enforcement response time can be slow) from a potential epidemic of
lawlessness spurred on by the unprecedented value of the crop.

Nor are schools, public uses and residential uses except for dormitory
style housing for "transient workers" allowed in the Ilium Industrial
Park, according to a memo from Rozycki to the commissioners.

"That one is clearly appropriate at this point in time," said BOCC
Chair Art Goodtimes.

"It seems like a logical spot for them in my mind," agreed San Miguel
County Sheriff Bill Masters.

Similarly C&C, which is seeking to supplement its previous application
in order to add a small cultivation operation to its retail business,
is also on track for approval of its optional premises cultivation
operation in a nearby structure.

While the location is not as near to a law enforcement presence as the
Ilium location, "I went through the neighborhood commercial uses,"
Rozycki told the commissioners and, "It seemed that it may be a
reasonable ancillary use."

But whether a stand-alone grow operation in 2,500 square feet of an
existing building also on Front Street in Placerville ultimately
passes muster is uncertain.

While the proposed C&C facility would act as an accessory to an
existing retail business serving the Placerville community with goods
in addition to medical marijuana, the sole purpose of the standalone
operation would be to supply a medical marijuana center in Telluride.

Although the Placerville Commercial Zone District allows certain uses
including small manufacturing operations and trade businesses subject
to a one-step planning commission review and the commissioners could
potentially allow the applicant to apply for a special use permit for
the facility, "I don't think a stand-alone Commercial Cannabis Grow
Facility that does not provide goods to local Placerville residents is
consistent with the intent of the P.C. Zone District," Rozycki wrote.

Not to mention that there is a glaring conflict between the county's
existing land use approval process and the new state law.

The L.U.C. requires a public process that would give neighboring
landholders to proposed grow facilities the right to comment on them,
while the state law requires that the location of the operations
remain confidential and exempts them from the Colorado Open Records
Act.

The fourth and final application being considered by the county at
this time is for a facility that is located on a 17-acre parcel on
Wright's Mesa in the Single-Family Residential Zone District that is
supplying a medical marijuana center in Telluride.

The zoning allows single-family residences and accessory uses but does
not specifically list agricultural uses or home occupations as allowed
uses. That said, the Planning Department has for some time allowed
agricultural uses as accessory uses in the residential zone districts
on Wright's Mesa, according to Rozycki's memo.

The applicant began growing medical marijuana as a primary caregiver
licensed by the C.D.P.H.E., but expanded his activities.

While the commissioners were at first leaning toward giving the
Placerville stand alone and Wright's Mesa facility operators two
months to move to more suitable locations, in the end they directed
staff to follow up with them.

"The board gave me impression that they may consider issuing them some
temporary permit until state and county come up with their rules and
regulations," said Rozycki.

"It's premature to say whether they will get temporary approval or
that they will have to move."