Mike Limon shovels dirt from the floor of a greenhouse, which will be used to grow recreational marijuana, while Carlos Burciaga waits to place PVC pipes into the ground on July 22 in Avondale, located in Pueblo County. GrowCo Inc., a subsidiary of Denver-based Two Rivers Water and Farming Co., is expanding in southern Colorado. (Denver Post file)

New in Colorado: College scholarships funded by weed

The measure approved by Pueblo County voters will create a local college scholarship fund for county high school seniors who attend one of two public colleges in Pueblo

A Colorado county that boasts the world’s largest outdoor marijuana farm and has been actively courting the new pot industry has approved the world’s first marijuana-funded college scholarship.

Pueblo County voters approved the pot tax by a 20-point margin Tuesday. The 5 percent excise tax on marijuana growers is expected to raise about $3.5 million a year by 2020, with the money available for any high school senior in the county who attends one of two public colleges in the county.

The scholarship awards will depend on how many students apply, but county planners are projecting about 400 students a year will get scholarships of about $1,000 each per year. The awards are the world’s first scholarships funded entirely by pot taxes.

“It’s a landmark vote,” said Brian Vicente, a Denver-based marijuana attorney who wrote Colorado’s 2012 legalization measure. “This is the first time you have marijuana tax money being used directly for scholarships, and that’s pretty remarkable.”

Pueblo’s booming pot industry didn’t oppose the measure, which brings their tax rate from 15 percent to 20 percent, phased in over five years. But it also puts the recipients in an odd place — they’ll be having college bills paid by a product they’re not supposed to touch until they’re 21.

“It’ll be interesting to see how they balance that, telling kids to stay away from these products until they’re 21 but creating a reliance on the product paying for their schooling,” said Tyler Henson, president of the Colorado Cannabis Chamber of Commerce, which represents growers and retailers, along with other business that work with the marijuana industry.

Scholarship backers insist the fund isn’t any different than the scholarships already funded by alcohol companies.

“Adding a scholarship that comes from an industry we are fostering is a logical method to address several of our community issues,” including an unemployment rate that lags the statewide average, said Chris Markuson, Pueblo’s economic development director.

Through aggressive recruitment efforts and financial incentives, the southern Colorado county has attracted a booming industry of marijuana growers fleeing higher costs in the Denver area.

Most Colorado counties, including Denver County, do not allow outdoor marijuana growing.

The result is that most Colorado pot plants are grown in warehouses under expensive lighting, resulting in plants that are shielded from public view but also prone to mites and mildews because they’re locked in enclosed spaces. Even small pot-growing warehouses routinely face five-figure monthly power bills, with pricey pesticide and fungicide tabs to boot.

Warehouse rents in the Denver area have soared, too, with an estimated one in 11 industrial buildings in central Denver now being used by the pot industry. Warehouse rents have climbed so high that the Denver-area Toys for Tots program director warned last month that the charity may not be able to afford storage space for the toys this holiday season before First Industrial Realty Trust Inc. donated warehouse space to the program.

Even Colorado counties that don’t expressly prohibit outdoor marijuana growing commonly have climates inhospitable to weed. Pueblo County is located on the state’s sunny and flat southeastern plains.

Pueblo also has taken the unusual step of putting marijuana growers on equal footing with traditional farmers when it comes to water rights — something it’s able to do because its water supply in the Arkansas River Basin is controlled locally, not by the federal government.

“We are aggressive, trying to build the Silicon Valley of the marijuana industry,” Markuson said.

Just last week Pueblo officials announced an $8 million incentives package to lure pot growers to convert a defunct Boeing rocket plant into a production facility for hemp oil that will eventually employ 163 people.

Pueblo County now accounts for about 3 percent of Colorado’s recreational marijuana sales, but about 20 percent of the state’s recreational pot production. The county has about 65 commercial pot growers, including the 36-acre Los Suenos farm, which is believed to be the world’s largest pot cultivation site.

The two colleges eligible for scholarship spending — Pueblo Community College and Colorado State University-Pueblo — could also be eligible to use some of the tax proceeds for medical marijuana research. Neither school has plans in place yet for such research but could make a proposal once the money is available.

CSU-Pueblo President Lesley Di Mare said the school welcomes the pot industry’s scholarship contribution.

But she added, “Of course marijuana’s not allowed on the campus, period.”

Sal Pace, a county commissioner who pushed the scholarship ballot measure, called the pot industry a natural source of funds.

“For years we’ve been floating the idea of a special funding source in Pueblo to help kids afford college,” Pace said. “This seemed like a natural fit.”
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Kristen Wyatt can be reached on Twitter: @APkristenwyatt