Cannabis retailer Starbuds was ordered this week to shutter its Northeast Denver grow operation after neighborhood residents reported a pungent odor escaping the second floor. The decision marks the first time a Denver-area marijuana grow operation was denied a routine license renewal.
In a statement, Starbuds owner Brian Ruden said the company plans to appeal Thursday’s decision by the Denver Department of Excise and Licenses.
“This is an attack on the cannabis industry, not just Starbuds,” Ruden said. “We are prepared to challenge this ruling in court.”
Starbuds has seven retail locations across Colorado. The shop ordered to cease its growing operation was the company’s adult-use store at 4690 Brighton Blvd., which contains both a ground-floor retail shop and a second-floor grow that houses 240 plants.
Every Colorado license for cannabis businesses must be renewed annually, but renewals don’t involve a a public hearing. In Starbuds’ case, the hearing was the result of neighborhood complaints. Residents of the Elyria-Swansea neighborhood testified that odor coming from the grow operation was affecting the quality of life of people living nearby. They described the working-class area as on the upswing and said the smell was frustrating attempts to improve the community.
Starbuds owner Ruden disputes the neighbors’ claims, but his legal argument centers on interpretations local zoning issues made by city hearing officer Suzanne A. Fasing and Denver Department of Excise and Licenses executive director Stacie Loucks. According to Starbuds attorney Jim C. McTurnan, the officials wrongly interpreted the zoning code and shouldn’t have held a public hearing on the license renewal.
In the area of the Starbuds location, the Denver Zoning Code allows “plant husbandry” as an accessory use, not as a primary use. While Fasing, the hearing officer, considered the Starbuds grow to be the property’s primary use, the company has argued the grow was an accessory use to the building’s primary purpose, which was the retail store.
Ruden said Starbuds is prepared to hammer home that point in court. Company owners “will take this as far as we need to,” he told the Denver Post.
The next appeal option for Starbuds is to seek judicial review of the decision in Denver District Court. In the meantime, the decision states that Starbuds cannot begin growing any new plants or clones at the site and must wind down cultivation and harvesting in the next 30 days, when its license expires.
As it stands, the license decision could create a slippery slope within the industry, Denver-area cannabis attorney David Rodman told Leafly.
Recently adopted zoning restrictions took roughly 70 percent of industrial properties off the table for cultivators, he said. That, combined with legal limits on how close together cannabis businesses can be — and now the very real threat of losing a license over neighborhood concerns — can turn finding a suitable location into a headache.
“I don’t think people realize how serious of an impact it is having on the industry in Denver,” he said.
Rodman added that he’s seen cultivators edging away from densely populated areas for a while now.
“As we get more and more outside grows in bigger facilities that simply would not fit in Denver, I think that you might see cultivation facilities in Denver start going away on their own because of market forces,” Rodman said.
For nearby communities, he said, the shift could be a windfall. “You are going to see a border economy where all the jurisdictions that allow it outside of Denver are going to do very well for the next year or two.”