OFFICE OF THE DIRECTOR OF THE DEPARTMENT OF EXCISE AND LICENSES CITY AND COUNTY OF DENVER, COLORADO

Transcription

1 OFFICE OF THE DIRECTOR OF THE DEPARTMENT OF EXCISE AND LICENSES CITY AND COUNTY OF DENVER, COLORADO RECOMMENDED DECISION IN THE MATTER OF THE APPLICATION BY COLORADO HEALTH CONSULTANTS, LLC, DOING BUSINESS AS STARBUDS FOR RENEWAL OF ITS RETAIL MARIJUANA CULTIVATION LICENSE FOR THE PREMISES KNOWN AND DESIGNATED AS 4690 BRIGHTON BOULEVARD, DENVER, COLORADO This matter came on for hearing on Monday, April 25, 2016, pursuant to an application filed by the Applicant, Colorado Health Consultants, LLC, doing business as Starbuds, (hereinafter, Applicant or Starbuds ) for the annual renewal of its retail marijuana cultivation license for the premises known and designated as 4690 Brighton Boulevard, in Denver, Colorado. This location is also licensed for the retail sale of marijuana to the public. The Applicant was represented at the hearing by attorney Jim McTurnan, Colorado attorney registration number The Denver Department of Excise and Licenses ( the Department ) was represented by Assistant City Attorney Colleen Morey, Colorado attorney registration number Representatives of two registered neighborhood organizations appeared in opposition to the renewal application: Nola Miguel of the Cross Community Coalition, and Nancy Grandys-Jones of Globeville Civic Partners. Other parties in interest who appeared in opposition to the renewal application were neighborhood residents, William Andrew Drew Dutcher, Allison Anderson, and Leo Branstetter (also a landlord in the designated neighborhood), and Paul Andrews, President and CEO of the National Western Stock Show, within the designated neighborhood. No Denver City Councilmember appeared at the hearing. After reviewing the exhibits received into evidence, documents officially noticed, the testimony of the witnesses, the statements of counsel, and applying existing law, the Hearing Officer enters the following findings of fact, conclusions of law, and recommended decision: The renewal of Starbuds cultivation license is subject to D.R.M.C. section 6-214(a)(2) 1. A threshold issue in this case is whether Starbuds retail marijuana cultivation license is subject to Denver Revised Municipal Code ( D.R.M.C. ) section 6-214(a)(1), for zone districts where plant husbandry is authorized as a permitted use under the zoning code, or whether it is subject to D.R.M.C. section 6-214(a)(2), where plant husbandry is not a permitted use, but is occurring as a compliant or nonconforming use under the zoning code.

2 P a g e 2 2. For retail marijuana cultivation licenses that are subject to section 6-214(a)(2), the Department Director is authorized, pursuant to D.R.M.C. section 6-214(a)(3), to hold a public hearing prior to the annual renewal of the license. There are also additional grounds for non-renewal of retail marijuana cultivation licenses that are subject to D.R.M.C. section 6-214(a)(2) (which do not apply to renewal of licenses subject to D.R.M.C. section 6-214(a)(1)), as discussed below. 3. At the April 25 public hearing, Starbuds first raised the issue that it was subject to D.R.M.C. section 6-214(a)(1). After the conclusion of the April 25 public hearing, Starbuds counsel, Mr. Jim McTurnan submitted a letter to the Department dated April 28, 2016, where he contended that Starbuds zoning permit for its premises at 4690 Brighton Boulevard authorizes plant husbandry as an accessory use, although he concedes that plant husbandry is not permitted as a primary use under the zoning code for Starbuds licensed premises. He interprets D.R.M.C. section 6-214(a)(1) to apply to all premises where plant husbandry is authorized as an accessory use, and therefore Starbuds contends that it is not subject to D.R.M.C. section 6-214(a)(2) and the related public hearing provisions of D.R.M.C. section 6-214(a)(3). Therefore, Starbuds contends that the Department is without jurisdiction to hold a public hearing on the renewal of its retail marijuana cultivation license. 4. The Hearing Officer first addresses whether the issue raised by Starbuds is jurisdictional, and concludes that this is not a jurisdictional issue. Subject-matter jurisdiction, as explained in Horton v. Suthers, 43 P.3d 611, 615 (Colo. 2002), concerns: the court's authority to deal with the class of cases in which it renders judgment." Closed Basin Landowners Ass'n. v. Rio Grande Water Conservation Dist., 734 P.2d 627, 636 (Colo.1987) (quoting In re Marriage of Stroud, 631 P.2d 168, 170 (Colo.1981)). A court has subjectmatter jurisdiction if "the case is one of the type of cases that the court has been empowered to entertain by the sovereign from which the court derives its authority." Paine, Webber, Jackson & Curtis, Inc. v. Adams, 718 P.2d 508, 513 (Colo.1986). 5. Applying these principles in this case, the Director of the Department has the authority and discretion to issue and renew retail marijuana cultivation licenses, and therefore has subject matter jurisdiction over Starbuds application for renewal of its cultivation license. When the Denver Retail Marijuana Code was adopted by the Denver City Council, the Director of the Denver Department of Excise and Licenses was designated to act as the local licensing authority for the city in regard to retail marijuana establishments, including retail marijuana cultivation licenses. D.R.M.C. section 6-204(a). The issuance of local licenses for retail marijuana establishments, including retail marijuana cultivation facilities, is a matter within the Director s discretion. D.R.M.C. section In this case, Starbuds failed to object in a timely fashion to the holding of a public hearing, which should have been raised prior to the convening of the April 25 hearing.

3 P a g e 3 Starbuds lack of timeliness could be deemed a waiver of this issue. Nevertheless, the Hearing Officer has considered all of the arguments contained in the April 28 letter, in addition to the evidence and arguments presented by Starbuds at the April 25 hearing. 7. Mr. McTurnan s April 28 letter mischaracterizes the hearing on April 25 as concerning the renewal of the optional premises cultivation license for Colorado Health Consultants, LLC dba Starbuds, operating at 4690 Brighton Blvd. The hearing on April 25 concerned a retail marijuana cultivation license only. Optional premises cultivation licenses are issued for medical marijuana only. D.R.M.C. section (b). Secondly, in his letter, Mr. McTurnan mistakenly asserts that there was considerable confusion amongst all parties and the hearing officer as to the status of the zoning. To the contrary, the record at the hearing does not reflect any confusion on the part of the hearing officer, but rather a recognition of the issue regarding the zoning status. Zoning status of 4690 Brighton Boulevard 8. It is undisputed that Starbuds licensed premises at 4690 Brighton Boulevard is on a lot zoned as I-MX-3. The Denver Zoning Code is found on the City of Denver s official government website at this link: Complete_Denver_Zoning_Code.pdf 9. As defined by Section of the Denver Zoning Code, I-MX is an abbreviation for Industrial Mixed Use Districts, which accommodate a variety of industrial, commercial, civic and residential uses. I-MX-3 applies to industrially-dominated areas served primarily by local or collector streets with a maximum building height of 3 stories. Id. 10. Prior to commencing its marijuana cultivation operations, Starbuds submitted an application for a zoning permit on February 26, 2013, and the zoning permit was approved on March 19, (Starbuds letter dated April 28, 2016). The Hearing Officer takes official notice of the Zoning Permit submitted to the Department on February 17, 2016, which is part of Starbuds License Renewal Application. The Zoning Permit also notes that it was issued pursuant to the authority of Ordinance Section # , which is a reference to the 2010 Denver Zoning Code. 11. Section of the Denver Zoning Code is entitled District Specific Standards and has a table which presents three types of uses: first all primary uses, then all accessory uses, and finally all temporary uses (Section ). The table has four columns: Use Category, Specific Use Type, a third column that is subdivided with five Industrial zone districts: I-MX-3 (at issue here), I-MX-5, I-MX-8, I-A, and I-B, and a fourth column labeled Applicable Use Limitations. 12. The table in Section is displayed on pages to of the Zoning Code. At the top of each page of the table, there is a key which explains each of the abbreviations used in the table. The critical abbreviation relevant to this case is NP

4 P a g e 4 which means Not Permitted Use. This abbreviation is also explained in Section entitled Explanation of Table Abbreviations which states in paragraph B.3. entitled Uses Not Permitted ( NP ) that NP in a table cell indicates that the use is not permitted in the specific Zone District. 13. The table on page shows the Agriculture Primary Use Classification and it clearly shows that plant husbandry has the abbreviation of NP for zone lots with the designation of I-MX-3, which means that it is not permitted as a primary use in the I- MX-3 zone district. In contrast, the same table shows that plant husbandry has the abbreviation of L-ZP for zone districts I-A and I-B. The abbreviations of L and ZP are also explained in Section The abbreviation L means that plant husbandry is permitted as a primary use in the I-A and I-B zone districts subject to compliance with the use limitations referenced in the last column of the table ( Applicable Use Limitations ). The abbreviation ZP means that plant husbandry is permitted as a primary use in the I-A and I-B zone districts only if reviewed and approved according to certain requirements elsewhere in the Zoning Code. 14. Starbuds contends in its April 28 letter that plant husbandry is PERMITTED as an ACCESSORY use, though not a primary use, on our zone lot, subject to limitations and approval by the zoning department. Plant husbandry falls under Unlisted Accessory Uses for I-MX-3 lots. (All capital letters are original.) Starbuds also contends that Section 13.3 of the Zoning Code defines Use, Permitted to include an accessory use. 15. The Hearing Officer concludes that plant husbandry is not authorized as a primary permitted use in I-MX-3 zone districts under the Denver Zoning Code. 16. The Hearing Officer interprets D.R.M.C. section 6-214(a)(1) to apply only to locations where plant husbandry is a primary permitted use under the Zoning Code. The Hearing Officer concludes that locations with approval of an accessory use of retail marijuana cultivation, as here, are subject to the provisions of D.R.M.C. section 6-214(a)(2), and the related public hearing requirement of D.R.M.C. section 6-214(a)(3). Grounds for non-renewal of a retail marijuana cultivation license under D.R.M.C. section 6-214(a)(2) 17. For locations that fall under D.R.M.C (a)(2), i.e., where plant husbandry is not a permitted zoning use, a retail marijuana cultivation license may be renewed only if the applicant meets three conditions: a. A zoning permit for plant husbandry was applied for upon the same zone lot on or before July 1, 2010; b. The applicant can show that an optional premises cultivation license upon the same zone lot was applied for with the state medical marijuana licensing authority on or before August 1, 2010, in accordance with (1)(b), 32 C.R.S; and

5 P a g e 5 c. The applicant can produce to the satisfaction of the director documentary or other empirical evidence that the cultivation of medical marijuana had commenced on the zone lot prior to January 1, Grounds for non-renewal of a retail marijuana license under D.R.M.C. section 6-214(a)(3) 18. D.R.M.C. section 6-214(a)(3) provides the following five grounds for non-renewal of Starbuds retail marijuana cultivation license: Summary of the evidence a. The existence of the retail marijuana cultivation facility on the licensed premises has frustrated the implementation of the city's comprehensive plan and any adopted neighborhood plan applicable to the subject property; b. The existence of the retail marijuana cultivation facility on the licensed premises has negatively affected nearby properties or the neighborhood in general, including by way of example any adverse effects caused by excessive noise, odors, vehicular traffic, or any negative effects on nearby property values; c. The existence of the retail marijuana cultivation facility has caused crime rates to increase in the surrounding neighborhood; d. The continued existence of a licensed retail marijuana cultivation facility in the subject location will have a deleterious impact on public health, safety and the general welfare of the neighborhood or the city; or e. The applicant or any person from whom the applicant acquired a retail marijuana business failed to meet one (1) or more of the requirements specified in paragraph (2) of this subsection (a). (Note: These requirements are quoted in paragraph 17 above of this Recommended Decision.) 19. The following exhibits were admitted into evidence: Applicant s Exhibit A-1, the Hearing Posting Affidavit, affirming that the premises were properly posted for a minimum of ten consecutive days, from April 8, 2016, through the date of the hearing, April 25, 2016; Applicant s Exhibit A-2, three pre-filed petitions in support of the application for renewal of the retail marijuana cultivation license; City s Exhibit C-1, the Notice and compliance check by a Department inspector regarding proper posting of the premises; City s Exhibit C-2, the Notice of Publication, showing that the notice of the hearing was duly published, and notifying all interested parties of their right to appear at a hearing on the license application; City s Exhibit C-3, a report generated by the Department entitled Retail Marijuana Store Licenses Report showing four retail marijuana stores within the

6 P a g e 6 designated neighborhood, including Starbuds, and also listing the names and contact information for twelve registered neighborhood organizations; City s Exhibit C-4, a map of the designated neighborhood around the licensed premises, as determined by the Department, from which adult residents or business owners or managers may present evidence at the public hearing, and exercise the rights of a party in interest pursuant to the Denver Retail Marijuana Code and the Department s Policies and Procedures Pertaining to Retail Marijuana Licensing; Opponent s Exhibit O-1, a Recommended Decision dated February 24, 2015, regarding the previous annual renewal of Starbud s retail marijuana cultivation license at 4690 Brighton Boulevard; Opponent s Exhibit O-2, a three page letter dated March 23, 2016, signed by Nola Miguel, on behalf of two non-profit organizations: Globeville Elyria Swansea LiveWell and Focus Points Family Resource Center, which expresses opposition to renewal of the retail marijuana cultivation license; and Opponent s Exhibit O-3, a two page exhibit of excerpts from the 2015 Elyria and Swansea Neighborhoods Plan (hereinafter referred to as the Neighborhood Plan ). 20. During the course of the hearing, the Hearing Officer also took official notice of two documents maintained by the City of Denver, after identifying the documents to all parties, and with no objection. Savage v. State Dept. of Revenue, 704 P.2d 328, 329 (Colo. App. 1985) (cf. C.R.E. 201, regarding judicial notice). These documents are a letter dated April 5, 2016, from Stacie Loucks, Department Director, to Starbuds in this renewal matter, and the 2015 Elyria and Swansea Neighborhoods Plan, found on the City of Denver s official government website: s/elyria_swansea_neighborhood_plan.pdf 21. Mr. Brian Ruden, the Managing Member and the owner of Starbuds, testified in support of the renewal application. The premises at 4690 Brighton Boulevard is a two-story building, with the retail marijuana store on the first floor, and a marijuana cultivation facility on the second floor, with 240 plants. 22. Mr. Ruden testified that the Applicant s lease of the premises began in March 2013, when the Applicant began the cultivation of medical marijuana. In January 2014, the Applicant added the cultivation of retail marijuana. Mr. Ruden testified that the building had been vacant for many years prior to the Applicant s lease of the premises. 23. Mr. T.J. Joudeh also testified in support of the renewal application. Mr. Joudeh is the owner of the building at 4690 Brighton Boulevard, which he leases to Starbuds. He purchased the property in early 2013, and he confirmed that the building had been vacant for many years prior to his purchase. Mr. Joudeh testified that the last time that the building had been occupied was by the Brooklyn Deli, which was seven or eight years before he purchased the building in early 2013.

7 P a g e 7 Starbuds does not meet the requirements of D.R.M.C. section 6-214(a)(2) 24. The Hearing Officer concludes that Starbuds retail marijuana cultivation license is not eligible for renewal pursuant to paragraph e. above of D.R.M.C. section 6-214(a)(3), because it fails to meet one or more of the requirements of D.R.M.C. section 6-214(a)(2), and in this case, it fails to meet all three requirements of section 6-214(a)(2). In his testimony, Mr. Ruden claimed that October 1, 2013, was the key date for grandfathering of his licenses. However, this assertion is incorrect, and the key relevant dates which are fixed by the Denver Retail Marijuana Code are identified in the following paragraphs. 25. The evidence is undisputed that Starbuds did not apply for its zoning permit for plant husbandry on the same zone lot, at 4690 Brighton Boulevard, on or before July 1, Prior to commencing its marijuana cultivation operations, Starbuds submitted an application for a zoning permit on February 26, 2013 and the zoning permit was approved on March 19, (Starbuds letter dated April 28, 2016). Therefore, Starbuds fails to meet the requirement of D.R.M.C. section 6-214(a)(2)a. 26. The evidence is also undisputed that an optional premises cultivation license upon the same zone lot, at 4690 Brighton Boulevard, was not applied for with the state medical marijuana licensing authority on or before August 1, The evidence shows that the building at 4690 Brighton Boulevard was vacant for many years prior to Starbuds lease of the premises in March Therefore, Starbuds fails to meet the requirement of D.R.M.C. section 6-214(a)(2)b. 27. The evidence is also undisputed that cultivation of medical marijuana had not commenced on the zone lot at 4690 Brighton Boulevard, prior to January 1, Mr. Ruden testified that medical marijuana cultivation began in March Therefore, Starbuds fails to meet the requirement of D.R.M.C. section 6-214(a)(2)c. Starbuds retail marijuana cultivation facility frustrates the neighborhood plan 28. The Elyria and Swansea Neighborhoods Plan, of which the Hearing Officer takes official notice, was adopted unanimously by the Denver City Council on February 23, According to the cover letter for the Neighborhood Plan, written by former Denver City Councilwoman Judy Montero, the Neighborhood Plan gives a new and active vision and a foundation for future regulations to: make Elyria and Swansea a healthier place for people, control safe and responsible development, protect the character of the neighborhood and help stabilize the community.this plan is meant to empower you and the Elyria Swansea community moving forward. 29. Starbuds is located in the Elyria neighborhood which is bounded by 52nd Avenue and Riverside Cemetery on the north, York Street to the east, 38th and 40th Avenues on the south, and the South Platte River on the west. I-70 bisects the neighborhood. The residential population is 84 percent Latino, with many immigrants who are Spanish speaking. Over 94 percent of the children receive free school lunches (compared to 73

8 P a g e 8 percent in Denver Public Schools). The median household income is $38,400, which is 43 percent less than the Denver average, and the average home sale price is $149,000, which is about half of the Denver average. More than 60% of adults over the age of 25 have less than a 12th grade education. (Plan, pp. 15 and 16). 30. The Neighborhood Plan notes that there is an incompatibility between high intensity industrial and low density residential areas. The result is a harsh relationship and edge between established industrial and established residential areas with an extent and scale that is unprecedented in other Denver neighborhoods. This results in undesired impacts on residential areas including noise, truck traffic, safety odors and reduced visual quality. (Plan, p. 24). 31. Ms. Nola Miguel, a member of the Cross Community Coalition, a registered neighborhood organization ( RNO ) testified in opposition to the renewal of the license. Ms. Miguel was authorized by Ms. Candy CdeBaca, the President of the Cross Community Coalition, to speak on behalf of the RNO at the hearing. Ms. Miguel is the Director of Globeville Elyria Swansea Right to Live Well, a non-profit organization that serves residents of the designated neighborhood. Ms. Miguel wrote the letter admitted into evidence as Exhibit O-2, on behalf of Globeville Elyria Swansea LiveWell and Focus Points Family Resource Center, which expresses opposition to renewal of the retail marijuana cultivation license. 32. Ms. Miguel was a member of the steering committee which developed the 2015 Elyria and Swansea Neighborhoods Plan. The role of the steering committee is referenced on p. 2 of the Neighborhood Plan. Ms. Miguel testified that the process to develop the Neighborhood Plan was initiated by the Denver Department of Community Planning and Development. She participated in steering committee meetings once or twice a month for two years as the Neighborhood Plan was being developed. Ms. Miguel testified that the existence of Starbuds retail marijuana cultivation facility at 4690 Brighton Boulevard frustrates the implementation of the Neighborhood Plan. Ms. Miguel also included some excerpts from this Neighborhood Plan in Exhibit O-3, which she testified are frustrated by the renewal of this cultivation license. 33. Ms. Miguel testified that the Neighborhood Plan identifies transformative projects including (i) having a buffer between industrial and residential properties, and (ii) the National Western Center Development, which are both frustrated by marijuana cultivation at the Starbuds location. Transformative projects are defined as meaning that their implementation is essential to achieving the Plan Vision over the next 20 years. (Plan, p. 7). 34. Section E.3 of the Neighborhood Plan, as documented in Exhibit O-3, states that: Light industrial transitions along neighborhood edges should be encouraged to provide visual and noise buffers between residential and industrial areas. Section E.3 explains different ways that the buffer can be achieved, including transitioning industrial uses embedded in residential areas (as the case here) to a mixed use zone district.

9 P a g e Ms. Miguel explained how the location of Starbuds is an area of change established by the Neighborhood Plan, as depicted in Exhibit O-3, which although currently zoned as I- MX (industrial mixed use), would transition to a mixed use zone district. (Plan, pp ). Thus, Ms. Miguel testified that marijuana cultivation would be even more incompatible with the mixed use zone district than it is with the current I-MX zone district. Exhibit O-3 also shows that there are many single family homes in a residential zone, which is immediately adjacent to Starbuds, with some residences having a backyard that adjoins the Starbuds property. 36. Ms. Miguel testified that another aspect of the Neighborhood Plan which is frustrated by the cultivation facility concerns the problem with odor impacts from marijuana grow facilities. Exhibit O-3 references paragraph D30 of the Neighborhood Plan which specifically addresses mitigating odor impacts associated with marijuana grow facilities. This is one of many references in the Neighborhood Plan to mitigating odors in the neighborhood that are associated with marijuana grow facilities. The section of the Neighborhood Plan entitled Neighborhood Input documents that environmental contamination and pollution concerns expressed by residents include undesirable smells from marijuana grow facilities. (Plan, p. 8). The Section of the Neighborhood Plan entitled Healthy Issues and Opportunities also documents that the marijuana industry is an additional source of environmental impacts including odor. (Plan, p. 76). Recommendation D5 of the Plan concerns improving environmental quality by mitigating odors and emissions from marijuana grow facilities on residential neighborhoods through methods such as land use designation, siting, buffering, etc. (Plan, p. 77). 37. Mr. William Andrew Drew Dutcher testified in opposition to the renewal application. Mr. Dutcher is a resident of the designated neighborhood, and has owned his home in the 4600 block of High Street since He is also the President of the Elyria and Swansea Neighborhood Association. However, Mr. Dutcher testified that the RNO has not taken a position on this application, and his testimony is offered in his capacity as a resident of the designated neighborhood. 38. Mr. Dutcher testified that he was also a member of the steering committee that developed the Neighborhood Plan, in a joint effort with the Denver Department of Community Planning and Development, and the Denver Department of Public Works. Mr. Dutcher testified that he began his involvement with the steering committee in 2013, and participated in monthly meetings. He testified that the Neighborhood Plan was subject to reviews by the Denver Planning Board, and then by a committee of City Council, and then was approved by the entire City Council in Mr. Dutcher testified that the renewal of this cultivation license frustrates the Neighborhood Plan for the reasons stated by Ms. Miguel. Mr. Dutcher also cited Section E.3 of the Plan, which was referred to by Ms. Miguel (paragraph 32 supra) concerning the buffer that is needed between industrial and residential uses. Mr. Dutcher testified that the Neighborhood Plan addresses mitigating odor from marijuana grow facilities, and that the renewal of this cultivation license frustrates this aspect of the Neighborhood Plan. Mr. Dutcher also cited a map on page 91 of the Plan, which is labelled Traditional

10 P a g e 10 Residential Areas; Future Concept Land Uses and Areas of Change Map Traditional Residential Areas. This is the same map that is included in Ms. Miguel s Exhibit O-3. This map clearly shows that the east side of the 4600 block of Brighton Boulevard (where Starbuds is located) and the 4700 block of Brighton Boulevard are in an area of change that should transition to mixed use, which would result in the needed buffer between industrial and residential zone districts. Mr. Dutcher testified that marijuana cultivation is completely inconsistent with a mixed use zone district. 40. Mr. Dutcher also testified about the Health Impact Assessment ( HIA ) that was part of the neighborhood planning process. Mr. Dutcher believes that the renewal of this cultivation license also frustrates the HIA. The Neighborhood Plan states that An HIA is a process to incorporate health considerations into a plan, project or policy.the recommendations in the HIA were designed to inform and strengthen the recommendations of the [Elyria and Swansea] neighborhood plans by adding community health as a consideration for the future vision, design and development of the neighborhoods. (Plan, p. 75). The Neighborhood Plan also states that the HIA recommendations have been integrated directly into the Plan (Plan, p. 2). The HIA Strategies specifically include addressing the odor impacts from marijuana grow facilities in Recommendation D5 of the Neighborhood Plan (paragraph 34 supra). The Neighborhood Plan states: nuisance odors do not necessarily cause direct toxic effects but may affect wellbeing by reducing the desire to go outdoors and by causing stress. (Plan, p. 76). Mr. Dutcher also quoted from the Executive Summary of the HIA which recognizes that nuisance odors can cause short term health effects such as watering eyes and throat irritation, as well as longer term negative health effects where residents have a limited ability to exercise outdoors. 41. Ms. Nancy Grandys-Jones, the Vice President of Globeville Civic Partners, an RNO, also testified in opposition to the renewal application as a representative of the RNO. Ms. Grandys-Jones testified that the boundaries of the RNO include part of the designated neighborhood. She testified that Globeville and the Elyria-Swansea neighborhoods are contiguous neighborhoods and that they worked together on the HIA. Ms. Grandys-Jones testified that these neighborhood plans are designed to uplift the neighborhoods and that it is important that businesses within the neighborhoods are aware of the neighborhood plans, and operate consistently with the neighborhood plans, and adhere to the recommendations of the neighborhood plans. 42. Mr. Paul Andrews testified in opposition to the renewal application. Mr. Andrews is the President and CEO of the National Western Stock Show and Complex, which is located within the designated neighborhood. Mr. Andrews testified that the renewal of the cultivation license frustrates the Elyria and Swansea Neighborhood Plans for the reasons stated by the previous witnesses. He described the goal of the Neighborhood Plan to transform the neighborhood into a vibrant area with an eye toward the future. Mr. Andrews cited four elements of the vision articulated in the Neighborhood Plan which are frustrated by the renewal of this cultivation license. These elements of the vision include: (i) showcase the history of Elyria and Swansea; (ii) cultivate Elyria and Swansea s identity; (iii) embrace Elyria and Swansea s culture; and (iv) establish a balanced land

11 P a g e 11 use strategy. (Plan, p. 10). Mr. Andrews testified that the cultivation facility interferes with the neighborhood s ability to achieve the vision in the Neighborhood Plan of creating a unique and strong neighborhood. 43. On rebuttal, the Applicant presented testimony from Mr. Ruden who suggested that Starbuds cultivation facility does not frustrate the neighborhood plan because construction for the new National Western Center in the designated neighborhood will not begin for another three to four years, and therefore, the new construction will not be affected by a 12-month renewal of Starbuds retail marijuana cultivation license. Mr. T.J. Joudeh, the building owner, testified that because the Applicant is complying with the I- MX zoning code, it is not frustrating the neighborhood plan. The Applicant s evidence is not adequate to rebut all of the evidence presented by the opponents concerning the frustration of the Neighborhood Plan by the continued existence of the retail marijuana cultivation facility. 44. The Hearing Officer concludes that the opponents have established by a preponderance of the evidence that the existence of the Starbuds retail marijuana cultivation facility frustrates the implementation of the adopted Elyria and Swansea Neighborhood Plan in all of the respects identified by the witnesses whose testimony is summarized above, and therefore there is grounds to deny this renewal pursuant to paragraph a. of D.R.M.C. section 6-214(a)(3). Starbuds retail marijuana cultivation facility has negatively affected nearby properties and the neighborhood in general 45. D.R.M.C. section 6-214(a)(3) provides another ground for non-renewal of a retail marijuana cultivation license, as follows: b. The existence of the retail marijuana cultivation facility on the licensed premises has negatively affected nearby properties or the neighborhood in general, including by way of example any adverse effects caused by excessive noise, odors, vehicular traffic, or any negative effects on nearby property values; 46. Ms. Miguel s letter dated March 23, 2016, (Exhibit O-2), states that: The odor coming from the facility is constant and pungent; this is unacceptable for being adjacent to residential homes where people are not comfortable opening their windows or going outside on their porches. The smell is irritating to many neighbors that feel they may be allergic 47. In addition, Ms. Miguel testified at the hearing that neighbors have complained that the odor from Starbuds causes headaches, burning throat, and discourages nearby residents from exercising outdoors. Ms. Miguel s letter and her testimony also describe two busy bus stops at the corner of 47th Avenue and Brighton Boulevard, with the Starbuds location at this corner, and she testified that there have been many complaints from bus

12 P a g e 12 riders about the odor. Ms. Miguel testified that she has personally smelled marijuana at the Starbuds location and that it can usually be smelled within one block of the facility. Ms. Miguel testified that the biggest impact of the odor has been on the residents on Williams Street, some of whom have a backyard adjoining Starbuds. The zoning maps in Exhibit O-3 and p. 91 of the Neighborhood Plan show single family and duplex residences in the 4600 and 4700 blocks of Williams Street, which is directly east of Starbuds, with some families having a backyard that adjoins the Starbuds property. These zoning maps also show that the five blocks east of Starbuds, including Williams, High, Race, Vine and Gaylord Streets, are entirely single family and duplex residences. 48. Mr. Dutcher also testified that he has personally smelled the odor from Starbuds, which is excessive. Mr. Dutcher described the immediate area where Starbuds is located as a very central area of the neighborhood, with busy pedestrian traffic and the two busy bus stops on the corner where Starbuds is located. Thus, the odor is impacting many residents of the neighborhood. 49. Mr. Leo Branstetter also testified in opposition to the renewal of the license. Mr. Branstetter owns and resides in property at 4700 Brighton Boulevard, which is directly across the street from Starbuds. Mr. Branstetter s primary reason for opposing the renewal of this license is based upon the Applicant s lack of compliance with the grandfathering provisions of D.R.M.C. section 6-214(a)(2). He also testified that all of the problems that he described at the 2015 renewal hearing have continued or become worse. At the previous hearing, Mr. Branstetter had testified that he experienced daily problems with odors from Starbuds. He reiterated at this hearing that the problems with odors are continuing. 50. Ms. Allison Anderson testified in opposition to the renewal of the license. Ms. Anderson is a resident of the designated neighborhood, and she has owned her home since December Ms. Anderson described the neighborhood as socially and economically disadvantaged, with many residents who are low-income and immigrants. Ms. Anderson testified that she walks by the Starbuds premises on a daily basis, and nearly every time she smells the odor of marijuana, which she described as pungent. She testified that at times the odor permeates beyond the Starbuds premises down the street. 51. On rebuttal, Mr. Ruden testified that he was not aware of any neighborhood complaints regarding odor until he heard the witnesses at the April 25 hearing. This assertion is contradicted by the finding in the February 2015 Recommended Decision that Mr. Branstetter testified at the previous renewal hearing about daily problems with odor coming from Starbuds. Further, Mr. Ruden testified that he is willing to install odor mitigation measures, including carbon filtration, such as what he uses at his Boulder cultivation facility. He also testified that he would be willing to enter into a Good Neighbor Agreement to address odors. Mr. T.M. Joudeh, the building owner testified that he visits the building periodically, and he has not noticed an extreme pungent odor. 52. Starbuds counsel has argued that the grounds for the non-renewal of this license only involve the retail marijuana cultivation facility, and do not involve the retail marijuana

13 P a g e 13 store at the same location. Starbuds counsel also elicited testimony from Ms. Miguel, Mr. Dutcher, and Ms. Anderson that they are unsure if the marijuana odor that is emitted from 4690 Brighton Boulevard is caused by the retail marijuana store or by the retail marijuana cultivation. 53. The Hearing Officer agrees that the negative effects on nearby properties or the neighborhood which are contemplated by paragraph b. of D.R.M.C. section 6-214(a)(3) are those which are attributable to the retail marijuana cultivation facility, rather than strictly attributable to the retail marijuana store. Nevertheless, the Hearing Officer draws the inference that the pungent and nuisance odor, which has been described by four witnesses, comes from the marijuana cultivation facility rather than exclusively from the retail marijuana store at 4690 Brighton Boulevard. In drawing this inference, the Hearing Officer notes that the Neighborhood Plan has many references to the problem of nuisance odors from marijuana cultivation facilities, but does not mention any problem regarding nuisance odors from retail marijuana stores. Further, the Hearing Officer notes Mr. Ruden s testimony that he uses odor mitigation measures at his Boulder marijuana cultivation facility. 54. Thus, the Hearing Officer concludes that the opponents have established by a preponderance of the evidence that the existence of the Starbuds retail marijuana cultivation facility has negatively affected nearby properties or the neighborhood in general, including adverse effects caused by excessive odors, and therefore there is grounds to deny this renewal pursuant to paragraph b. of D.R.M.C. section 6-214(a)(3). 55. The opposition witnesses also testified about parking problems occurring in the neighborhood, which they attributed to the Starbuds premises at 4690 Brighton Boulevard. 56. On rebuttal, Mr. Ruden testified that the cultivation facility is not open to the public, and the Applicant does not offer any public tours of the cultivation facility. The Applicant has one employee who has dual assignments of staffing the retail marijuana store and then tending the marijuana plants when he is not otherwise busy at the store. Mr. Ruden testified that once a month, additional employees are needed at the cultivation facility to harvest plants. However, these employees carpool from another of the Applicant s warehouses to 4690 Brighton Boulevard in a single car. 57. With respect to the parking issue, the Hearing Officer concludes that any parking problems observed by the opposition witnesses may, in fact, be attributable to the retail marijuana store, but they have not been shown by a preponderance of the evidence to be attributable to the cultivation facility, and therefore the grounds for denial under paragraph b. of D.R.M.C. section 6-214(a)(3) do not involve parking or traffic problems. 58. There was also some reference by opposition witnesses to a negative impact on nearby property values, but the Hearing Officer finds that there is not sufficient evidence about this issue, and therefore the grounds for denial under paragraph b. of D.R.M.C. section 6-214(a)(3) do not involve a negative effect on nearby property values.

14 P a g e There was also some reference by opposition witnesses to an increase in crime rates caused by the cultivation facility, which is a ground for denial under paragraph c. of D.R.M.C. section 6-214(a)(3). Ms. Anderson testified that she had data showing 11 calls to the Denver Police for the location of 4690 Brighton Boulevard between January 2015 and April However, this data does not show an increase in crime in the surrounding neighborhood, nor was there any explanation of the circumstances for these calls, either from the Denver Police Department or otherwise. Therefore, the Hearing Officer finds that there is not sufficient evidence to show the grounds for denial under paragraph c. of D.R.M.C. section 6-214(a)(3). The continued existence of the retail marijuana cultivation facility will have a deleterious impact on public health and the general welfare of the neighborhood 60. D.R.M.C. section 6-214(a)(3) provides another ground for non-renewal of a retail marijuana cultivation license, as follows: d. The continued existence of a licensed retail marijuana cultivation facility in the subject location will have a deleterious impact on public health, safety and the general welfare of the neighborhood or the city; 61. The Neighborhood Plan explains how nuisance odors can negatively impact the public health and the general welfare of the neighborhood. The findings made in paragraphs 40, 46 and 47 above are also relevant to this ground for denial. 62. Mr. Andrews testified that the continued existence of the retail marijuana cultivation facility has a negative impact on the general welfare of the neighborhood. He testified that for the past 3 ½ years, the National Western Stock Show has worked with neighbors and the City of Denver to develop the National Western Master Plan, which has been approved by the City. Denver voters approved funding for the development of the National Western Center through a ballot measure in November Mr. Andrews testified that the National Western Center will be a world-class facility where local neighbors and businesses work together to welcome local, national, and international visitors. Mr. Andrews believes that the cultivation facility does not contribute to the general welfare of the neighborhood, the National Western Center and its visitors, and does not contribute to the goal of creating a neighborhood with an abundance and variety of local businesses, which provides an environment where visitors and neighbors feel safe and welcome. Mr. Andrews testified that the Stock Show is currently in Phase I of the Master Plan which involves land acquisition, and that no new construction will occur during the next 12 months. He also testified that there are 240 events scheduled in the existing facility each year, and that the National Western Center has 1.3 million visitors each year who are impacted by the continued existence of Starbuds retail marijuana cultivation facility. 63. On rebuttal, Mr. Ruden testified that the Starbuds cultivation facility has no negative impact on the public health, safety, or general welfare. Mr. Ruden testified that there are

15 P a g e 15 home grows in the neighborhood that are bigger than the Starbuds cultivation facility. However, Mr. Ruden also testified that Starbuds maintains 240 plants, which compares to the authorized number of 6 plants per person or 12 plants per household in Denver for home grows. Mr. Ruden also testified that he has made improvements to the property at 4690 Brighton Boulevard, which have benefitted the neighborhood, rather than having a negative impact. Mr. T.J. Joudeh, the building owner also testified that he and Starbuds have made improvements to the property which have benefitted the neighborhood. 64. The Applicant s testimony is not sufficient to rebut the evidence presented by the opposition concerning the negative impact of the retail marijuana cultivation facility on the public health and general welfare of the neighborhood. 65. The Neighborhood Plan documents the significant challenges that have historically affected the Elyria neighborhood, concerning environmental, health, economic, and social issues. In response to these challenges, neighborhood stakeholders and City representatives devoted considerable efforts to developing the Neighborhood Plan, with the goal of having a vibrant future for the neighborhood. Neighborhood witnesses were adamant in their opposition to the renewal of this license, and the Hearing Officer concludes that the continued existence of this retail marijuana cultivation facility has a negative impact on the general welfare of the neighborhood. 66. The Applicant also offered the testimony of Matt Hill, who is the Business Development Manager for Quantum Concentrates which manufactures marijuana-infused products, and is located at 4800 Brighton Boulevard in Denver. The Hearing Officer declines to consider Mr. Hill s testimony because he is not a business owner or manager of the entire business, and therefore he does not meet the definition of a party in interest as set forth in Section I.B.3.a.(3) of the Department s Policies and Procedures Pertaining to Retail Marijuana Licensing. 67. The Applicant also submitted Exhibit A-2, a packet of three pre-filed petitions in support of the application for renewal of the retail marijuana cultivation license. Mr. Branstetter reviewed each of the signatures in Exhibit A-2, and he identified 28 signatures which are not valid because the persons signing the petition did not live in the designated neighborhood, or they did not indicate that they were at least 21 years of age. The Hearing Officer has done a similar review of the petitions, and sustains the objections to 28 signatures for these reasons. There are 23 remaining signatures in support of the application, which is less than half of all of the signatures gathered. It is troubling that Chris Yeager, an employee of the Applicant who obtained the signatures on two pages of petitions, signed an affidavit under oath stating that every individual who signed the petition is either a resident or the owner or manager of a business within the designated neighborhood, when in fact this is clearly false. The Hearing Officer finds that the remaining 23 signatures are entitled to little weight to rebut any of the evidence presented by the opposition witnesses.

16 P a g e 16 Conclusions 68. The Hearing Officer concludes that Starbuds retail marijuana cultivation license is not eligible for renewal pursuant to paragraph e. above of D.R.M.C. section 6-214(a)(3), because it fails to meet one or more of the requirements of D.R.M.C. section 6-214(a)(2), and in this case, there is a preponderance of evidence to show that Starbuds fails to meet all three requirements of section 6-214(a)(2). 69. The Hearing Officer concludes that the opponents have established by a preponderance of the evidence that the existence of the Starbuds retail marijuana cultivation facility frustrates the implementation of the adopted Elyria and Swansea Neighborhood Plan, and therefore there is grounds to deny this renewal pursuant to paragraph a. of D.R.M.C. section 6-214(a)(3). 70. The Hearing Officer concludes that the opponents have established by a preponderance of the evidence that the existence of the Starbuds retail marijuana cultivation facility has negatively affected nearby properties or the neighborhood in general, including adverse effects caused by excessive odors, and therefore there is grounds to deny this renewal pursuant to paragraph b. of D.R.M.C. section 6-214(a)(3). 71. The Hearing Officer concludes that the opponents have established by a preponderance of the evidence that the existence of the Starbuds retail marijuana cultivation facility will have a deleterious impact on the public health and the general welfare of the neighborhood or the city, and therefore there is grounds to deny this renewal pursuant to paragraph d. of D.R.M.C. section 6-214(a)(3). 72. This Hearing Officer notes that a different conclusion was reached on these grounds for denial by a different Hearing Officer in the Recommended Decision issued on February 24, 2015, concerning the previous annual renewal of Starbuds retail marijuana cultivation license. (Exhibit O-1). However, the evidentiary record in the current renewal hearing is very different than the evidence cited in the Recommended Decision from February All but one of the witnesses whose testimony is summarized above did not testify in the February 19, 2015, hearing, and the Neighborhood Plan (which did not receive final approval until February 23, 2015) was not part of the evidentiary record at the 2015 hearing, as it is in the current renewal hearing. Thus the 2015 Recommended Decision does not affect the findings and conclusions in the current case. ACCORDINGLY, having considered the evidence in its entirety, it is concluded by the weight thereof that the Retail Marijuana Cultivation license issued to Colorado Health Consultants, LLC doing business as Starbuds, for the premises known and designated as 4690 Brighton Boulevard, Denver, Colorado, is not eligible for renewal in the current location. Therefore, it is recommended that the license renewal be denied.

17 P a g e 17 RECOMMENDED this 10th day of May, /s/ Suzanne A. Fasing Suzanne A. Fasing Hearing Officer Any party in interest may file objections to the foregoing Recommended Decision within ten (10) calendar days from the date above. All filings shall be made by to the Records Manager for the Department at EXLRecordsManagement@denvergov.org and CAOExciseandLicense@denvergov.org, copying the Assistant City Attorney, colleen.morey@denvergov.org and any additional parties listed below. If a party in interest does not have access to , objections shall be submitted in writing to the Director, Dept. of Excise and Licenses, 201 W. Colfax Ave., Dept. 206, Denver, CO The Director of the Department of Excise and Licenses will issue a FINAL DECISION in this matter following review and consideration of the Recommended Decision, and if applicable, any objections. CERTIFICATE OF SERVICE The undersigned hereby states and certifies that one true copy of the foregoing Recommended Decision was sent via , on the date above, to the following: Jim McTurnan, attorney for Starbuds starbudsjim@gmail.com Colleen Morey, Assistant City Attorney Colleen.morey@denvergov.org Records Manager, Dept. of Excise and Licenses EXLRecordsManagement@denvergov.org CAOExciseandLicense@denvergov.org /s/ Suzanne A. Fasing Suzanne A. Fasing Hearing Officer