Budtender Kate Panetta of Natural Remedies, left, helps a customer at the Denver dispensary in August 2013. (Hyoung Chang, The Denver Post)

Denver council deadlocks in late-night weed sesh on business caps

After rejecting attempts to halt pending applications for grow houses and stores, council members fail to pass proposal

After a rare floor battle to reshape a proposal that would set location caps for Denver marijuana shops and grow houses, City Council supporters early Tuesday failed to muster a majority for a test vote.

The 6-6 deadlock just after 1 a.m. killed the measure rather than advancing it to a final vote next Monday.

But sponsor Robin Kniech said after the meeting that she planned to refile her bill directly on the floor next Monday. She said it would include two smaller amendments that were adopted by the council before the proposal failed.

The ill-fated vote ended an unusual night that saw five hours of amendment debates, dueling public testimony and Kniech’s final plea to approve the proposal.

“A no vote on this bill does not get you a more stringent bill,” she told her colleagues, asking them to recognize compromises that had been incorporated into it.

Instead, the council faces the self-imposed May 1 expiration of a temporary moratorium that has barred new entrants to the medical and recreational markets. The two-year-old moratorium was expanded and extended late last year, and the council has met in a special issue committee for three months to work out permanent rules that most members agree should place limits on industry growth.

But going into the meeting, council members were divided sharply on whether to allow pending applications for dozens of new cultivation facilities and dispensaries to go forward before the city sets the new caps, as Kniech’s bill allowed.

Three times, the council rejected — once in a deadlock, and twice outright — proposed amendments that would have included the halting of those pending licenses. Most would be located in neighborhoods that already are considered saturated with marijuana grows or stores, but Kniech and some colleagues contend the city should show good faith to the applicants.

“The reality is, this is trying to strike a balance between having quality of life in our neighborhoods and allowing the industry to exist,” Councilwoman Debbie Ortega said.

But she said allowing the pending applications to proceed, along with other issues, led her to stand on principle against Kniech’s proposal.

President Chris Herndon also was firm in his opposition, saying months of hearings, with extensive input from the community, led him to conclude that neighborhoods including Elyria-Swansea and Globeville would suffer if more odor-producing grow houses opened up.

Joining Ortega and Herndon in voting against the introduction of the overall proposal were Albus Brooks, Kevin Flynn, Paul Lopez and Wayne New.

The “yes” votes came from Kniech, Kendra Black, Mary Beth Susman, Paul Kashmann, Jolon Clark and Rafael Espinoza, who said he would vote yes to advance the proposal but still wanted to discuss some of the issues.

Kniech could have more success next week. Stacie Gilmore, who was absent Monday but is expected to be back, had voted to advance the proposal out of the special committee.

But the two-meeting approval process would begin anew, pushing a potential final vote to April 25 and raising the possibility of more complications if there are absences.

Meanwhile, Lopez said he would continue talking with Kniech in the coming week about potential compromises.

Earlier Monday, the council heard more than an hour of spirited testimony from the public. Neighborhood advocates from industry-saturated areas pleaded for protection from more pot shops and grows that they said had affected their quality of life.

Industry investors and their supporters, meanwhile, said stopping applications for dozens of pending locations would leave them out millions of dollars.

The special committee passed the measure 9-3 last week, and Kniech had added what she considered safeguards for neighborhoods since then.

But the biggest unresolved issue before Monday’s meeting was the pending licenses. Kniech’s proposal, as drafted, would have allowed them to proceed before applying the new rules, as the city typically does when it changes most regulations.

The proposal would have set citywide caps on the number of locations for cultivation facilities and dispensaries, as well as on the total number of locations, without limits on edibles manufacturers or testing labs. It also would end the issuance of licenses for new medical marijuana dispensaries or grows.

Other major provisions include an annual lottery, starting in 2017, for qualified applicants to vie for new retail store and cultivation licenses that become available, within the location caps; and restricting new grow locations from being within 1,000 feet of schools — a restriction that applies already to stores — and from residential zone districts.

Denver has 210 active retail or medical cultivation facilities, 146 dispensaries and 64 locations with both. Among pending license applications that the city still was reviewing last week were groupings that could result in 31 new grow locations, 10 stores and six locations with both, totaling 47 potential new locations.

Lopez and Ortega filed the most aggressive amendments, both aiming to provide more limits for more than a dozen neighborhoods with the highest concentrations of grows and stores. Both also wanted to stop applications in those areas as of May 1, a move that would target the bulk of pending licenses. One amendment by Ortega proposed to set caps on the number of licenses at lower-than-current levels, resulting in a reduction in the number of businesses as some closed in coming years.

Those were rejected, but only after vigorous debate.

Kniech supported an amendment submitted by Clark, on behalf of the absent Gilmore. Adopted 9-3, it said pending applications could go through but provided extra protection from future license applications for the most industry-saturated neighborhoods.

The change said that in the first year’s lottery, the Department of Excise and Licenses, in a trial run, would bar applications for new locations in the top-five areas of “undue concentration.” On the current lists for both grow houses and stores are Elyria-Swansea, Northeast Park Hill, Overland and Valverde. The grows list also includes Montbello, and the stores list has Five Points.

Another successful amendment, proposed by Ortega, required city notification to registered neighborhood organizations when applicants sought new licenses in industrial areas. It was approved 12-0.

Kniech said Monday that after hearing testimony in recent months about the industry’s negative impacts on the community, she planned to push this year to create a new budget fund that would allow affected neighborhoods to help decide how to spend the city’s marijuana tax proceeds.

On Tuesday, a council committee is set to consider an odor ordinance that would include new requirements for grow houses that are intended to reduce smells nearby. Advocates hope the new rules, if approved, would address some of the complaints lodged against grows by neighborhood groups and schools.

Jon Murray: 303-954-1405, jmurray@denverpost.com or @JonMurray

This story was first published on DenverPost.com