City Council considers retail pot sales

Former Homeland Security officer warns about threat of black market

Garrett Smith displays a plant as tall as him inside his medical marijuana dispensary, The Herbal Alternative. Enlargephoto

Garrett Smith displays a plant as tall as him inside his medical marijuana dispensary, The Herbal Alternative.

A former Department of Homeland Security law enforcement officer warns the black market for marijuana could explode locally if Cortez fails to regulate recreational sales.

“The cartels are not going to go anywhere where there’s a ton of recreational weed floating around,” said Garrett Smith, who served as a federal law enforcement officer for five years.

“If the city doesn’t regulate retail marijuana, then the black market will expand,” he said. “The cartels will target this area. That’s not good for the kids. That’s not good for the community.”

The City Council will consider Ordinance No. 1192, Series 2014, at its regular meeting on Tuesday, Aug. 12. Held at City Hall, the meeting starts at 7:30 p.m. If adopted, the 17-page draft ordinance would allow licensed recreational marijuana sales.

If the measure fails, Smith said it would not keep marijuana out of the city.

“Marijuana is already here,” said Smith. “More regulation would be better than less regulation or no regulation.”

City Manager Shane Hale explained a public hearing was not officially listed as an agenda item when the ordinance was presented to city leaders on Tuesday, but he said the city would accept public comments. He added officials wanted to hear from residents on the issue, so they could make the best possible decision.

“The City Council will take any testimony from anyone who wants to speak,” said Hale.

A public hearing is set for Aug. 26.

Today, Smith owns and operates The Herbal Alternative, a medical marijuana business on Lebanon Road. He was praised when approved as a medical marijuana purveyor by a Colorado Marijuana Enforcement Division investigator in 2012.

“(Garrett Smith) clearly represents the type of quality operator we are looking for in this new industry,” wrote state investigator James Nash.

With the state’s accolade, Smith said he was frustrated that city officials failed to seek advice or opinions from either state regulators or industry professionals like him when drafting its retail marijuana ordinance.

“It drives me crazy,” he said.

Smith said he approached municipal leaders on numerous occasions requesting to address the city council. Without expert input, Smith claimed the city has approached the retail marijuana issue with a “lack of knowledge and understanding.”

“I wish the industry leaders would have been included in the city’s conversations,” said Smith. “We could have helped set to rest a lot of their concerns.”

The city’s proposed recreational marijuana ordinance would prohibit manufacturing of hash oil within city limits. Smith said he didn’t oppose the ban, but added extracting THC to produce hash oil was not the same as infusing THC to manufacture a brownie, for example.

“The extraction process is the dangerous aspect,” said Smith. “It requires a civil engineered designed laboratory. The infusion process is not dangerous. It only requires a commercial grade kitchen.”

According to a memo from City Attorney Mike Green, seven regulatory changes have been proposed since city leaders were first presented with the ordinance last month, including a ban on manufacturing marijuana products.

“The city will not issue approval for retail marijuana products manufacturing licenses,” Green wrote. “There will only be three classes of state licenses allowed; retail marijuana store, retail marijuana cultivation facility and retail marijuana testing facility.”

Smith said he was disappointed to learn that the city was considering a ban on manufacturing marijuana-infused products. He is licensed by the city to produce medical marijuana infused products.

“Whether you manufacture infused products for medical or retail, the process is the same,” he said.

According to his analysis of Green’s memo, Smith said the ban would essentially prohibit local gangapreneurs from producing medical or retail marijuana products such as brownies, cookies and lotions.

“There’s a lot of consumer demand for these type of products,” Smith said. “We could easily see our revenues double, probably more.”

Last month, The Herbal Alternative launched a construction project to double the footprint of its medical marijuana dispensary in order to help meet growing customer needs. The company’s sales have grown by 300 percent over the past two years, said Smith.

The city council will also consider a $7,000 fee simply to apply for a retail marijuana license from the city. According to Hale, staff recommended the increased fee to cover costs associated with building, police and fire inspections. The current medical marijuana-licensing fee is $1,000.

“To increase the fee seven times just to sell to a different market is excessive,” said Smith.

The Herbal Alternative employs 11 people, all making at least $12 per hour, according to Smith. All potential employees must pass a 10-year federal background check.

An Herbal Alternative employee tends to medical marijuana plants inside the company's grow room. Enlargephoto

An Herbal Alternative employee tends to medical marijuana plants inside the company's grow room.