This Colorado county embraced the marijuana industry. Now it might ban pot businesses

Reporting from Pueblo, Colo. —  Larry Carlisle was down on his luck, stricken with Rocky Mountain Spotted Fever and injuries from having been beaten up when he was a cab driver. So six months ago he left Oklahoma City and set off for a new life in Pueblo, Colo.

It was, he said, “an oasis.”

“In my ailments, I’ve turned to cannabis,” he elaborated.

His plan is to start a fish farm. But for now, the 58-year-old Carlisle camps out with friends who go by the names Cactus and Cowboy, eating what they can scrape together from food stamps, soup kitchens and dumpsters. They are part of a homeless population that has grown dramatically since the county embraced the pot industry.

More than anywhere else in Colorado, Pueblo tied its future to the marijuana jobs, tax revenues and other economic benefits touted by legalization advocates around the country. But almost three years after legalization took effect in Colorado, Pueblo is reconsidering that strategy.

On Tuesday, voters will decide whether to ban recreational marijuana businesses. There are two essentially identical measures up for vote — one for the city of Pueblo, the other for outlying Pueblo County, where all of the recreational businesses are currently located.

Backers of the proposals say the industry has oversold the economic benefits and become a drain on local hospitals and law enforcement. The companies and their supporters say those problems have been overblown and that any issues are easier to address when regulated enterprises rather than criminals are selling the drug.

How the measures will fare is a mystery, because there haven’t been any public polls.

With marijuana initiatives on the ballot in several states, the drug could soon be legal for recreation or medicinal use in as many as 29 states. As the first state to legalize marijuana for recreational use, Colorado is being closely watched by other places trying to decide how to regulate pot.

The Colorado law, approved by voters in a 2012 referendum, left it up to each of the 335 cities and counties to decide what sort of businesses to allow. More than 70% banned pot business outright, according to CannaRegs, a firm that tracks local marijuana laws.

Some municipalities held citizen referendums. In Pueblo, decision-making fell to local officials.

The county commissioners saw marijuana as an opportunity to revive the fortunes of a place that never recovered from the closure of the Colorado Fuel and Iron Company steel mill in the 1980s.

“We all got real poor, real quick,” said Lucinda Gallegos, a marketing consultant whose father and other relatives worked at the mill. “We went from wearing Nikes and Levi’s to Pro-Wings and Sassoons.”

Besides industry-friendly regulations, Pueblo also offered marijuana growers cheap and abundant land and labor, access to water and enough sunshine to cultivate in greenhouses rather than in far more expensive, artificially lit indoor spaces.

While Denver, about 100 miles to the north, is the hub of the state’s marijuana industry, Pueblo has become its second city. The county is now home to nearly 200 growing operations, processors and shops that supply marijuana for recreational use.

In a county of just over 150,000 people, the industry employs about 1,300, according to a local trade group called Growing Pueblo’s Future.

Among the businesses is Los Sueños Farms, which claims to be the largest legal cannabis farm by acreage in North America. It employs 80 people, about a third of whom have college degrees, with a payroll of about $2 million.

That money is going to “rents, cars, housing and food,” said one of its major investors, Bob DeGabrielle, a real estate developer from North Carolina.

Pot taxes have helped fund construction at the local high school, road improvements, scholarships for local students and the new Institute of Cannabis Research at Colorado State University Pueblo.

Sal Pace, a county commissioner, said that as legalization spreads across the country he hoped Pueblo could one day become the “Napa Valley of Cannabis.”

But proponents of getting rid of the recreational marijuana industry say any benefits are far outweighed by its burdens.

“I don’t believe it’s even paying its own way,” said Charlene Graham, a former deputy chief of the Pueblo police and head of Citizens for a Healthy Pueblo, which wants to ban pot businesses.

Rising homelessness has become a key campaign point. Posada, a homeless services organization, has assisted 5,486 people this year, up from 2,444 for all of 2013, the year before legalization for recreational use took effect.

“We’re importing poverty,” said Anne Stattelman, the group’s executive director. “This is already a vulnerable community,” and now the new arrivals from out-of-state want to use “Colorado like their mother’s basement.”

Many arrive on Interstate 40 from Texas, Oklahoma and other conservative states in the Southeast without legal marijuana or state-subsidized Obamacare for the poor. Pueblo isn’t the first town where drivers can legally buy marijuana, but it’s the first one large enough to offer social services. And its cost of living is among the lowest in the nation.

Other proponents of banning pot businesses say the industry has damaged the reputation of the town. “We think it’s a negative for our community to be regarded as a center for a drug culture,” the Pueblo Chieftan editorialized in its support of the measures.

Proponents also point to concerns about organized crime. Police have conducted several raids this year on homes where pot is being grown to illegally ship and sell out of state.

But the marijuana industry and it backers say that banning businesses would have no bearing on whether people grow weed in their own homes. The accuse marijuana opponents of saying anything in an effort to turn back legalization.

“We’re fighting a group of prohibitionists,” said Jim Parco, an economics professor at Colorado College who owns a local dispensary.

Pro-pot forces also downplay concerns about rising homelessness. Pace, the county commissioner, said the new arrivals are to some degree to be expected in a boom town and not a problem that’s worth killing the county’s newest industry.

If voters ban marijuana businesses, it could create new problems for Pueblo. DeGabrielle said he and other investors in the industry are prepared to sue the county to recoup their money.

“I’m participating in a legal, authorized, state approved industry,” he said.

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