Broomfield pauses pot-shop licensing in wake of Terrapin lawsuit 

BROOMFIELD — A week after Boulder-based cannabis dispensary chain Terrapin Care Station sued Broomfield, alleging that the city’s licensing process for would-be pot shop operators is unfair, the Broomfield Marijuana Licensing Authority is temporarily pausing its work. 

Terrapin, through holding company Centroid Holdings Inc., claims in its lawsuit that Broomfield city and county clerk Erika Lew has undermined the “fairness of proceedings” in the city’s application and lottery system used to select the three dispensaries that will be permitted to open up shop in Broomfield by allowing multiple applications to be submitted by the same applicants.

Broomfield “has received considerable feedback regarding its marijuana licensing process, particularly concerns regarding the attempt by certain affiliated groups to submit multiple applications using different corporate entities,” according to a notice from the BMLA. “This issue is currently the subject of pending litigation involving the city and numerous applicants.”

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The city has been slow to allow for the operations of dispensaries in the years since recreational cannabis shops were legalized in Colorado in 2014. But in March, the Broomfield City Council passed an ordinance that opened the city up to pot sellers. 

After that decision, TCS submitted an application to open a retail cannabis shop at 300 Alter St., Broomfield city documents show. 

Over the past six months, would-be operators have been working through the application process in advance of an October deadline for a final report from the Broomfield Selection Committee tasked with vetting those applications. 

Broomfield is now accepting public comment on submitted applications, and a lottery for licenses will be held after the committee report is issued. 

Terrapin Care Station attorneys, in a complaint filed last month with the Colorado District Court in Broomfield, allege that a handful of TCS’ potential competitors —  including Igadi Ltd., SMF Ltd., Yuma BRMT LLC, LP Management Co. LLC, Silverpeak Corp., Nathan Wetzel and Herbet Wetzel,  Mark Busch, Mike Weinberger and Joshua Davis — have submitted multiple applications for licenses that are substantially similar. The lawsuit contends that city ordinance prohibits any individual or company from submitting more than one application.

In effect, these multiple submissions increase the likelihood that one of the defendants’ applications is selected during the lottery process, the plaintiff, who sought a preliminary injunction requiring the stoppage of the licensing process, contends. 

“We appreciate that the city of Broomfield has paused its licensing process to reconsider its decision to move forward in violation of its ordinances. People who tried to game the system by submitting multiple applications through shell entities should be disqualified,” TCS’ attorney Jordan Factor said in an email. “We believe that was the intent of City Council when creating the lottery process and we hope that the city adopts regulations to clarify its position. Terrapin remains committed to obtaining judicial relief in the event the city persists in its present, unlawful course.”

Broomfield will pause its licensing process “for a period not to exceed 60 days in order for staff to reassess the submission of applications from different, but affiliated entities,” according to the BMLA notice. “The city is in the process of considering administrative regulations to clarify this issue to ensure that the licensing process moving forward is consistent with the city code, City Council’s intent when it implemented this robust licensing process, and fundamental fairness.”

Broomfield officials did not provide additional comment and are directing those in the community with questions to email manager@broomfield.org.

Any scheduled action related to the licensing process will be rescheduled to a yet to be announced date, according to the city.