Pueblo County making lots of money by embracing pot growing

by Lisa Cyriacks

Saguache County Commissioners reported several dubious marijuana cultivation operations in the county—more than half in the Baca Grande subdivision—to the Colorado Division of Water Resources. These operations are possibly in violation of water permitting requirements and have not been approved by Saguache County as legal operations. It is not clear if these operations might be for personal use, medical marijuana grown by caregivers for patients, or commercial operations.

Caregivers don’t have to register with the Marijuana Enforcement Division, but they must have proof that they are the designated provider for their patients, including a plant count for each patient. That information has to be provided to the Colorado Department of Public Health and Environment.

Saguache County is not alone in concern regarding water theft for marijuana cultivation operations. Costilla County, the only other county in the San Luis Valley where grow operations are permitted, shares these concerns.

Craig Cotten, Division 3 Water Engineer, recently addressed state legislators with enforcement concerns. Cotten questioned how his water commissioners, who are not armed and are not law-enforcement officers, should handle potentially dangerous growers.

“Should we get law enforcement involved even if it’s a water issue?” Cotten said. “I honestly don’t know for sure what legislation would fix this.”

Cotten did note to state lawmakers that he had spoken to the Colorado Marijuana Enforcement Division but officials there told him they only regulate legal uses of pot.

“If they have the ability to address illegal uses, I think that might be helpful,” Cotten said.

Saguache County Administrator Wendi Maez said that so far she has documented a total of 17 questionable cultivation operations, and others may still exist that have escaped detection.

At a recent Baca Grande POA meeting, several residents complained to commissioners and law enforcement that there are individuals living in the subdivision and growing marijuana with household well permits or water hauled in from nearby creeks.

One grow application in the Baca Grande Chalets was withdrawn by the applicant recently. Several Baca Grande residents appeared at the meeting in September to object to the proposed grow but the applicant failed to appear.

Guidance from the Colorado Division of Water Resources states: “Marijuana grown for personal use in accordance with the requirements of Amendment 64 would be allowed using a residential well permitted for household use or domestic use. Marijuana grown for sale, and not strictly for the grower’s personal use, can not utilize water from a residential well that is permitted for household or domestic use.”

Can Colorado issue a water right to irrigate marijuana plants when federal law still says that growing pot is a crime?

Legal marijuana-growing operations in Colorado have so far gotten their water by using existing water rights and applying for a change of use, not by applying for new ones.

A summary of consultation from the State Water Court on a Pitkin County application for a new water right in 2014 reads as follows: “The applicant must explain how the claim for these conditional water rights can be granted in light of the definition of beneficial use as defined in (Colorado state law),” the summary of consultation stated. “Specifically, beneficial use means ‘the use of that amount of water that is reasonable and appropriate under reasonably efficient practices to accomplish without waste the purpose for which the appropriation is lawfully made.”

“Beneficial” or not, watering marijuana plants in Colorado is a valuable practice. Colorado collected $63 million in tax revenue and an additional $13 million in licenses and fees on $699 million of combined medical and recreational pot sales in 2014.

High County News recently characterized Pueblo County, CO as the Silicon Valley of Marijuana. Pueblo County embraced the marijuana industry after passage of Amendment 64 as an economic savior.

Ever since the local steel industry collapsed in the 1980s, nearly a third of Pueblo’s population was on public assistance, and in 2010, the metropolitan area around Pueblo had the highest unemployment rate in the state.

Pueblo County had something to offer besides labor—cheap real estate. Unlike Denver, it also has an abundance of available agricultural land. So local officials made marijuana cultivation a use by right in industrial and business districts and on agricultural land—likely the first county in Colorado to take this step—meaning marijuana businesses weren’t subject to sometimes time-consuming and arduous special reviews or approvals by the local government.

Last year when the Bureau of Reclamation prohibited the use of federal water for pot cultivation, Pueblo Board of Water Works, the local utility that leases water for business and agricultural use, calculated they could lease up to 800 acre feet of water without touching the federal water in their system.

Pueblo County has also issued pioneering rules that prohibit hemp grows with male plants from being located within five miles of existing marijuana grows. This prevents cross-pollination that could lower the marijuana plants’ THC content while increasing THC in the hemp, which can’t exceed 0.3% under state law.

According to the High County News article, embracing the marijuana industry is paying off. In 2014, Pueblo County netted $1.8 million from licensing fees for pot establishments and marijuana sales taxes, covering costs to the County for permitting, and boosting the general fund. There is talk of branding “Pueblo-grown pot,” along the lines of Pueblo green chile, another celebrated local crop.

Real estate prices are rising, too. According to a local realtor, industrial properties have nearly doubled in price to $50 per square foot since 2014. Now that the first outdoor grows and greenhouses are materializing, agricultural land prices have also doubled—up to $10,000 an acre. The Southern Colorado Growers Association, the local marijuana trade organization, claims the industry has provided 1,300 new jobs and contributed more than $120 million to the local economy.

Colorado law allows local jurisdictions to opt-out of the pot law and disallow cannabis businesses—and most jurisdictions have done just that. Local jurisdictions may also have additional requirements for marijuana business license applicants in addition to the state requirements. The Colorado Marijuana Enforcement Division’s 2014 annual report says that 228 local jurisdictions have voted to prohibit medical and retail marijuana operations.