Pueblo’s city council on Monday voted 5-1 to extend nearly $8 million in incentives from the city’s half-cent economic development sales tax fund to help CBD Biosciences get its hemp-oil processing plant off the ground.
The Pueblo Development Foundation will spend $3 million to rehab a Boeing rocket assembly plant at Pueblo Airport Industrial Park that has been vacant since 2004. CBD Biosciences, a partnership of Denver-based O.penVape and Thar Process Inc., receive $4.89 million to help purchase equipment.
According to the agreement OK’d by the council, the company will create 163 new jobs by 2018 that will pay an average annual salary of $41.590, not including benefits.
According to KRDO TV, councilman Chris Nicoll voted against the proposal because he was concerned about backing a venture that remains illegal under federal law.
Hemp, which has little or no THC, the psychoactive ingredient of marijuana, is considered a controlled substance under federal law. But commercial cultivation of hemp became legal in Colorado when voters passed Amendment 64 authorizing retail sale of pot.
According to KRDO, city attorney Dan Kogovsek said the city could face penalties for extending the incentives. “Although I think even the feds would agree that hemp is much less problematic than psychoactive marijuana.”
CBD Biosciences expects to spend almost $10 million equipping the cavernous city-owned building where Boeing manufactured Delta rockets.
Pueblo Economic Development Corp. CEO Jack Rink said Tuesday that work to convert the building for hemp oil production will begin quickly.
“This will be a fast-paced project,” he said. “They are already in town looking at the building. They have product they need to dry, so it’s full-speed ahead.”
No marijuana will be processed at the facility, he said.
Rink said he hopes the hemp oil operation will lure other businesses interested in using its output in nutraceutical, cosmetic and industrial products.
Farmers also may be spurred to plant more hemp, which typically has higher profit margins than other crops grown in Colorado, Rink said. “This is that missing component — the company that can process the crop. It is really going to create the incentive to plant more in the future.”
CBD Biosciences has signed a 10-year lease-to-own agreement that will pay back the $3 million used to renovate.
PEDCO also is pursuing a 50 percent county personal property tax abatement for the company as well as job creation tax credits under the state Enterprise Zone program.