S

Legalized

Marijuana:

Water Supply and Compliance Issues

in the State of Colorado

COLORADO SUSTAINABILITY CONSULTANTSwww.coloradosc.com

November 19, 2015

Conor P. Filter, Esq.

Legal and Environmental Consultant

Colorado Industry Overview

S Colorado cannabis (Medical and Retail sales combined) was a $700m industry in 2014, likely to exceed $1bn in direct sales this year.

S 1,234 licensed cannabis cultivation facilities as of June 2015.

S Seed-to-sale tracking indicates 585,000 plants in cultivation system as of June 2015, an increase of 56% year-over-year.

IS THE INDUSTRY GROWING?

Colorado Industry Overview

YES, BUT THERE ARE CLEAR LIMITS TO GROWTH

S State law allows any jurisdiction to ban or regulate

businesses. Most elect a ban.

S 81 out of 322 statewide jurisdictions (municipalities and

counties) allow cannabis businesses to operate.

S Plant count limit for cannabis cultivation is 10,200 plants:S Approx. 51,000sf of indoor cultivation per license

S Approx. 5 acres of outdoor cultivation per license

Weld

Moffat

Mesa

Baca

Park

Routt

Yuma

Las Animas

Garfield

Lincoln

Larimer

Pueblo

Gunnison

Bent

Elbert

Saguache

Grand

Logan

Rio Blanco

Eagle

Kiowa

El Paso

Montrose

Otero

Delta

Washington

Kit Carson

Jackson

La Plata

Prowers

Fremont

Pitkin

Cheyenne

Morgan

Adams

Montezuma

Huerfano

CostillaConejosArchuleta

Dolores

Chaffee

Hinsdale

Mineral

San MiguelCuster

Teller

Douglas

Phillips

Crowley

Boulder

Ouray

ArapahoeSummit

Alamosa

Lake

Rio Grande

Sedgwick

Jefferson

San Juan

Clear Creek

GilpinDenver

Broomfield

Map Revision: January 7, 2015Created by Trent Pingenot for CCI For information purposes ONLY. Please contact individual counties for specifics on their regulatory status.

County Regulatory Status - Recreational Marijuana

Prohibiting New Establishments, but Allowing Migration of Existing MMJ to Recreational

Allowing Cultivation, Product Manufacturing & Testing Only

Allowing Cultivation Only

Allowing Sales, Cultivation, Product Manufacturing & Testing Ban or Moratoria in Effect

Allowing Sales and Cultivation Only

S

Cultivation: Industrial or

Agricultural Use?Water Use is Tied Directly to

Cultivation Sites and Systems

Indoor

Cultivation

High energy input – often

zoned in industrial use

district

Hydroponic systems mean

efficient water use,

estimated 0.5L per plant per

day: Drip irrigation or

Hand watering

Water and nutrient recirculation occurs

Automation systems Automated systems measure moisture,

temperature and humidity levels and water

only when necessary

Individual plant value makes extensive

systems economically feasible

Year-round use

Outdoor

Cultivation Similar to traditional

agricultural uses – usually

Ag zoned

Environmentally similar to

hemp or other nitrogen-

hungry field or row crops

High water use – up to 18L

per plant per day (for

illegal) Plant size is larger

Irrigation systems are less efficient due

to evaporation

Potential for nutrient runoff

Seasonal use in Colorado

Hybrid

Greenhouse

Cultivation Energy efficient, humidity

and temperature controlled

Irrigation mimics indoor cultivation Hydroponic drip irrigation

Hand watering

Low waste through recirculation

Larger plant size similar to outdoor cultivation; more water required

Year-round cultivation cycle

S

Water Supply and

Compliance Issues

Water Administration Challenges,

Federal Restrictions,

State and Local Solutions

Water Administration

Challenges

S Indoor cultivation is not classified as an irrigation use

S Irrigation water rights and wells cannot be used for indoor

cultivation

S Requires different types of water rights or water rights

policy changes

S Water from Federal facilities not useable for industry

Federal Restrictions:

Bureau of Water Reclamation

Temporary Reclamation Manual Policy no. PEC TRMR-63

S Bans approval of any marijuana cultivation use from BWR-

managed water source under the Controlled Substances Act

S Mandatory reporting requirements for BWR employees if

marijuana cultivation is discovered as a use for any BWR water

S Temporary policy enacted May 14, 2014; set to expire or be

adopted in 2016.

Division of Water Resources

State Regulation:

S State allows all legal uses of water for cannabis cultivation, including:

S Residential well permits for individual use

S Water hauling from legal sources

S Commercial Well or Ditch rights for irrigation allowable under state law

S Restricts cannabis cultivation as it does other agricultural uses:

S Exempt commercial wells available only for drinking and sanitation in commercial facilities

S Seasonal use of irrigation rights could restrict greenhouse cultivation on agricultural land

Local Solutions: Pueblo

County

S Business-friendly regulatory environment

S Pueblo Board of Water Works Resolution 2014-05 was

passed in response to BWR;

S Allows city to lease excess water up to 800 acre feet

annually to marijuana enterprises in unincorporated Pueblo

County

S Provides only for greenhouse operations, no outdoor

facilities allowed

Local Solutions: Eagle County

S Complex regulatory environment requires significant

compliance efforts

S County favors agricultural character on proposed sites,

including greenhouse and outdoor cultivation

S Applicant must submit plans, including expected source

and level of water use, plus evidence of permits showing

availability or ownership of water rights sufficient for use.

Conclusions

S Six gallons of water per plant per day? No! Legal, regulated cannabis cultivation can be (and is) highly efficient. Studies show similar impact to almonds, less impact than corn, potatoes, or tree fruit.

S Site type and cultivation systems result in huge variances in water use between marijuana enterprises.

S Solutions depend on the jurisdiction, zoning, current or estimated use and future demand.

COLORADO SUSTAINABILITY CONSULTANTSwww.coloradosc.com

Conor P. Filter, Esq.

Legal and Environmental Consultant

to the Cannabis Industry

Email: conor.filter@cosustainconsult.com

Bibliography

Slide 2 Bullet 1: Washington Post Wonkblog, 2/12/15 -

https://www.washingtonpost.com/news/wonk/wp/2015/02/12/colorados-legal-weed-market-700-million-in-sales-

last-year-1-billion-by-2016/; MED 2015 Mid-Year Update -

https://www.colorado.gov/pacific/sites/default/files/2015%20Mid%20Year%20Update%20FINAL%20%2008272

015.pdf; Bullets 2-3: MED 2015 Mid-Year Update., p. 5.

Slide 3 Bullet 1: Colo. Const. Art. XVIII, Section 16(5)(f); Bullet 2: MED 2015 Mid-Year Update; Bullet 3:

Marijuana Enforcement Medical and Retail Marijuana Business applications, available at:

https://www.colorado.gov/pacific/enforcement/forms-publications-marijuana-enforcement-division; Bullet 3:

Slide 4 Colorado Counties, Inc. Recreational Cannabi County Map, revised 1/7/15, available at:

http://ccionline.org/download/Rec_Marijuana_20150107.pdf

Slide 6Photo Credits: http://currentgreen.com/; www.hydroponicist.com

Slide 7 Photo Credits: Tim Blake; Clay Duda, available at: http://www.redding.com/news/family-values-at-

heart-of-countys-420-marijuana

Slide 8 Photo Credits: Hemperical evidence blog:

http://hempiricalevidence.blogspot.com/2015_07_01_archive.html; Rendering for CSC – High-altitude

Greenhouse design.

Slide 11 Bureau of Water Reclamation Temporary Reclamation Manual Policy no. PEC TRMR-63, passed

May 14, 2014, available at: http://www.usbr.gov/recman/temporary_releases/pectrmr-63.pdf

Bibliography

Slide 12 Colorado Division of Water Resources FAQ Factsheet, available at:

http://water.state.co.us/DWRIPub/Documents/Amendment%2064-Flyer2014-Final.pdf

Slide 13 Pueblo County - http://www.koaa.com/story/30049561/marijuana-sparks-changes-to-water-

business; http://www.denverpost.com/ci_26937941/big-changes-coming-colorados-marijuana-market Pueblo

Board of Water Works Resolution 2014-05 available at:

http://www.pueblowater.org/images/Resolution%202014%20-05.pdf

Slide 14 Eagle County – Eagle County Board of Commissioners, Resolution no. 2013-124, Art. 7(n),

available at:

http://www.eaglecounty.us/Planning/Documents/Adopting_Medical_and_Retail_Marijuna_Business_Licensing_

Regulations/

Slide 15 Bullet 1: Washington Post Wonkblog, available at:

https://www.washingtonpost.com/news/wonk/wp/2015/06/26/forget-almonds-look-at-how-much-water-

californias-pot-growers-use/; Environmantal Risks and Opportunities in Cannabis Cultivaiton, UC Berkeley and

BOTEC Analysis Corporation Study, available at:

http://lcb.wa.gov/publications/Marijuana/SEPA/BOTEC_Whitepaper_Final.pdf