When the last lottery ball clinked into a wire cage, Dan Ramsay’s heart also dropped. After years of effort, he would not be opening a pot shop in Grand Junction, a city that has been one of most high-profile laggards in Colorado when it comes to allowing marijuana sales.
Ramsay, a longtime leader in the Western Slope hemp industry, had spent the past two years jumping through hoops to open a recreational marijuana store. He started planning when Grand Junction voters OK’d recreational sales in April 2021. After that vote, he and other potential cannabis business owners kept planning but were in a bureaucratic holding pattern while the City of Grand Junction yo-yoed on the criteria for marijuana merchants.
Ramsay attended at least 15 city meetings while the wheels of cannabis regulation spun. He and his partners bore the legal costs for the heaps of applications, licenses and plans required by the city. They paid 18 months of rent to lease a building where they planned to locate their weed shop.
“Honestly, I was just exhausted by the whole process,” Ramsay said after the disappointing lottery outcome March 30. “They say that if you shoot for the moon and miss, you land in the stars. But we just lost all the investment we put in our space shuttle.”
Ramsay said he wouldn’t be so negative about the experience if it had all been a matter of chance. But the advent of the recreational marijuana trade in Grand Junction snaked through a frustrating, convoluted process with unexpected twists and turns for marijuana entrepreneurs wanting to do business in what is considered a prime location due to its proximity to Utah along Interstate 70.
“I know there are a lot of hard feelings about this. It was not fair to the applicants, no doubt about that,” said Scott Beilfuss, a newly seated Grand Junction City Council member who served on a committee that gave guidance to the city on the marijuana legalization vote and is not happy about how it played out.
Beilfuss said he knows that business people like Ramsay lost a lot of money while the city waffled on the process and “reinvented the damned wheel.”
A decade after legalization, Grand Junction gets ready for weed sales
Colorado approved medical-use marijuana nearly a quarter-century ago. Amendment 64 gave the OK to the sale and use of recreational cannabis statewide in 2012 but left it up to local governments or their voters to decide where stores would be allowed. Grand Junction voters had decided the previous year to reject medical marijuana and to ban dispensaries if statewide voters embraced them.
It would take another decade before Grand Junction voters would get another chance to weigh in on pot sales. In 2021, 58% said yes to pot sales.
By then, more than 1,000 recreational marijuana businesses had set up shop across the state, generating more than $10 billion in sales and around $2.3 billion in tax and fee revenues.
More than 18 Western Slope towns, including the Mesa County towns of Palisade and DeBeque, had approved pot sales and were reaping the rewards of local cannabis taxes.
Grand Junction officials spent two years after the vote weighing the particulars of how to open the door to marijuana businesses. By comparison, nine months elapsed between when Golden voters OK’d cannabis sales and when the first shops were open.
“It was endlessly frustrating,” said Joey Coleman, who snagged the 10th and final lottery number March 30 after years of waiting. He is now moving forward with plans to build a downtown-area Grand Junction pot shop from the ground up.
“I don’t think there is any way not to blame the city council and city management. I think they were trying to reinvent the wheel,” Coleman said.
Ramsay said the worst part of the whole process for him was what could be likened to the famous Charlie Brown football maneuver where Lucy snatches the ball away in mid-kick.
The city had initially announced that 10 applicants for pot licenses would be chosen based on merit. The marijuana advisory committee had recommended that. Forty-seven businesses applied when the merit idea was still in play.
Ramsay and some other locals figured they would be shoo-ins. They were known entities. They had track records as local business people. They had chosen appropriate locations. They were confident about getting through the city’s exacting application and background check processes.
Eight months later, the city switched the merit criteria to a lottery.
Grand Junction communications director Sara Spaulding directed questions about that pivot to Grand Junction City Attorney John Shaver, who was instrumental in setting up the pot-purveyor requirements. He did not respond to multiple requests for comment.
Spaulding called the process “thorough and fair.”
Beilfuss said it got bogged down in a lot of legal minutiae.
The City of Grand Junction wasn’t in control of all the foot-dragging factors that showed down approval of local pot shops and prompted the Grand Junction Daily Sentinel to pan the process in an editorial that called it “a buzzkill” and “a fiasco.”
A Durango-based business, High Colorado, had sued the city after its application was denied because it selected a location too close to a school. City rules said no pot shops within 1,000 feet of a school. High Colorado wanted a store 980.21 feet from Grand Junction High School. The applicant claimed in its court filing that the city measured from an outside maintenance building at the school rather than the school itself.
That lawsuit gummed up the works for months while city leaders fretted over how to hold a lottery that would include one applicant who might not be able to legally open a shop, depending on which way the pending lawsuit was decided.
Geography created another snag. Grand Junction’s Horizon Drive area that includes the city’s busiest hotel district and the airport and is the main artery into town from Interstate 70, raised another thorny issue. Three applicants wanted to locate on Horizon Drive, but only two were going to be allowed because of restrictions set by the Horizon Drive Business District.
The city initially planned to hold a separate lottery for the three Horizon Drive applicants. The other applicants went ballistic over the perceived unfairness of that; Horizon Drive pot shop owners would be chosen before marijuana shops in the rest of the city, giving them a leg up if they were allowed to open first. The odds were also viewed as unfair; two out of three winners for Horizon Drive as opposed to eight out of 28 applicants for the rest of the city.
The city backed off on that plan and the city council passed an emergency ordinance in March establishing a single lottery for the whole town. The Horizon Drive Business District squawked about that because it could have meant no pot shops for Horizon Drive. The city came up with some lottery contingencies in case no Horizon Drive applicants — or three — were chosen.
The lottery did solve some problems
As it turned out, the way the balls dropped in late March solved all the lingering problems.
The long-awaited lottery did not raise any new objections or complaints of a stolen or rigged process. It was overseen by a municipal judge in full view of a roomful of nervous and hopeful pot business owners who had each personally dropped their numbered balls in the hopper.
Two Horizon Drive locations were winners, negating the need for a second drawing for that part of town. The ball for the applicant involved in the lawsuit did not drop, so that problem was instantly solved.
For the 10 lottery winners, all that remains now is to complete their state licenses and prepare their shops for opening.
Shannon Gray with the Colorado Department of Revenue’s Marijuana Enforcement Division said state licensing approvals must be completed within 45 to 90 days.
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Then the pot dollars can finally start rolling in and be directed to parks and recreation projects, including a recreation center newly approved by voters.
Grand Junction is estimating that pot shops will bring in about $2.5 million in the first year of operation, down from an estimated $2.9 million when the marijuana-shop approval process began.
Grand Junction is coming into the legalized marijuana realm after a year that saw a significant statewide downturn. While the city hesitated, the state had record sales of $2.2 billion during the shut-in days of the pandemic. But by the end of last year, Colorado cannabis sales had been through a major slowdown, dropping 23%.
Grand Junction marijuana proponents can look to their neighbors to see what might have been if the city had moved faster.
Palisade has saved the tax revenue from three pot shops to create a town budget surplus that has been used for new equipment, vehicles and improvements to sidewalks and other town infrastructure. The tiny, once-cash-strapped town of DeBeque, which jumped on legalization in 2014 and is home to four shops, has a raft of community improvements to show for it.
Colorado’s Marijuana Industry Group, which tallies pot taxes, shows Boulder has used $5 million annually in marijuana taxes to fund public school nurses and counselors. Denver has used the weed windfall to pay for youth violence prevention programs, after-school programs and affordable housing. Pueblo’s pot dollars have gone to scholarships, and Aurora’s have been directed to recreation centers and homeless housing and youth programs.
A whiff of pot frustration lingers over Grand Junction’s drawn-out process even though it has finally resulted in the very real promise of weed shop grand openings this summer.
“We should by this point have been bringing in tax revenues and created jobs,” Ramsay said.
Instead, Ramsay and others are counting their losses. Besides 18 months of rent, they paid for required security fees, ventilation plans, plans to keep underage kids off the property, plans to dispose of unsold weed, application and licensing fees, background checks, licensing fees and insurance.
Ramsay won’t say how much he lost while the city waded around in the no-pun-intended weeds of marijuana legalization. Beilfuss estimates losses for hopeful pot shop owners in the millions and points out there is also a citywide negative impact on dozens of commercial properties that were tied up for so long and are now suddenly back on the market.
“This was not a business-friendly way to do this,” Ramsay said. “It was bureaucracy at its worst.”