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Will Starbuds Become Colorado’s First Grow License Loser?

June 13, 2016

In a case that’s being closely watched by the cannabis industry, the fast-growing retailer Starbuds is facing the possible loss of its license to cultivate in a Denver neighborhood whose residents are upset over what they say are the pungent odors escaping the indoor grow. A decision on the company’s license renewal is expected in the coming days, and industry officials worry that a dangerous precedent could be set. If Starbuds loses its license, other companies may face similar pressure from their own neighbors. 

The controversy began in April, when some residents in Denver’s Elyria-Swansea neighborhood requested a public hearing regarding the Starbuds license renewal at the company’s location at 4690 Brighton Blvd. That location contains both a ground-floor retail shop and a second-floor grow operation with 240 plants. 

Neighborhood activists, including Nola Miguel of the Globeville, Elyria-Swansea LiveWell organization, said the odor from the grow operation is affecting the quality of life of people living in the neighborhood. 

“That is a place where you want the highest and best use [of buildings in the neighborhood], you want something that is going to benefit the community and bring life and vibrancy to the location,” Miguel told Leafly. “Not something that has boarded-up windows and the smell.” Miguel made a point of saying that neighbors were upset over the smell, not against legal cannabis. 

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Every cannabis license in Colorado must renewed annually. Most don’t receive a public hearing. But based on the neighborhood complaints, city officials scheduled one in Starbuds case. 

The company disputed the need for a hearing, but representatives showed up for the May event to present the company’s side of the story. 

According to Starbuds attorney Jim C. McTurnan, city hearing officer Suzanne A. Fasing incorrectly interpreted the zoning code and should not have held a hearing on the renewal in the first place. The Denver Zoning Code allows “plant husbandry” in that zone only as an accessory use, not as a primary use. Fasing considered the Starbuds grow to be a primary use, while McTurnan argued that the grow was an accessory use to the building’s primary purpose, which was the retail store. 

On May 17, Fasing issued a recommendation to deny the renewal of Starbuds’ growing license at the 4690 Brighton location. 

The final decision is up to Stacie Loucks, the executive director of Denver’s Department of Excise and Licenses, who is expected to issue her ruling in the coming days. 

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The Starbuds controversy presents an interesting case study in the cannabis industry’s sometimes difficult hunt for appropriate locations to house indoor cultivation facilities. 4690 Brighton sits almost exactly at the boundary between a rough but rising neighborhood and a fully industrial section that includes railyards, stock pens, and a Purina dog food plant. 

The Elyria-Swansea neighborhood is 84 percent Latino, with more than 94 percent of the area’s children receiving free school lunches. The median household income is 43 percent lower than the Denver average. Local leaders like Nola Miguel argue that they’re working hard to improve their neighborhood and the smell from Starbuds isn’t helping the cause. 

Brian Ruden, the owner of Starbuds, said nobody has directly complained to him about the smell emitting from the building. 

“I have never received a written complaint, and nobody has come to talk to any of my staff or myself,” Ruden told Leafly.

“I hear everyone loud and clear, and I am willing to spend the money to put in a filtration system and you won’t smell anything.” 

Ruden also said he has purposed a good neighbor agreement with the members of the neighborhood, but has not heard back from anyone in reference to the purposed agreement. 

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“Give me an opportunity to eliminate the odor and we will check it, and if we agree the problem has been resolved, then great. If we cannot resolve the problem, then we will figure out what to do with the license there.” 

He added, “Nobody has been willing to come to the table on anything. I want to come to the table, but nobody seems to want to talk about this.” 

Nola Miguel disputes Ruden’s claim. According to her, he has never done any outreach in the community. 

“No, he has never tried to do that,” she said last week. “He has been opposed on his licenses for the last three years and has never made any attempt—even though he said he was going to.” 

If the Department of Excise and Licenses denies the license renewal, Starbuds will have the option to appeal the director’s decision. 

Ruben pointed out that there are 36 grow operations in the area that are much larger than his “accessory” operation. He also mentioned that his phone has been ringing off the hook with industry groups, lobbyists and other interested parties worried that a decision against Starbuds could set a dangerous precedent for the industry.

“I have not made any decisions on how I will proceed” after the decision, Ruben said. “I really just want to figure out how we coexist. I am not trying to be the victim here. I am trying to work with the community.” 

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