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RESOLUTION NO. 13866
A RESOLUTION AUTHORIZING THE CITY OF PUEBLO TO
REFUND TO NUVUE PHARMA, LLC, A COLORADO
LIMITED LIABILITY COMPANY, AN APPLICATION FEE IN
THE AMOUNT OF $6,069 FOR AN ADDITIONAL MEDICAL
MARIJUANA OPTIONAL PREMISES CULTIVATION
LICENSE
BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1.
The City shall refund to NuVue Pharma, LLC the sum of $6,069. Said amount is
the application fee paid by NuVue Pharma, LLC, on or about November 15, 2017, for an
additional Medical Marijuana Optional Premises Cultivation License.
SECTION 2.
The officers and staff of the City are authorized and directed to perform any and
all acts consistent with the intent of this Resolution to implement the transactions
described herein.
SECTION 3.
This Resolution shall become effective immediately upon final passage.
INTRODUCED December 26, 2017
BY: Ed Brown
City Clerk’s Office Item # Q-3
Background Paper for Proposed
Resolution
COUNCIL MEETING DATE: December 26, 2017
TO: President Stephen G. Nawrocki and Members of City Council
VIA: Brenda Armijo, Acting City Clerk
FROM: Sam Azad, City Manager
SUBJECT: A RESOLUTION AUTHORIZING THE CITY OF PUEBLO TO REFUND TO
NUVUE PHARMA, LLC, A COLORADO LIMITED LIABILITY COMPANY, AN
APPLICATION FEE IN THE AMOUNT OF $6,069 FOR AN ADDITIONAL
MEDICAL MARIJUANA OPTIONAL PREMISES CULTIVATION LICENSE
SUMMARY:
Attached is a Resolution authorizing the City of Pueblo to refund to NuVue Pharma, LLC
(“NuVue”) an application fee in the amount of $6,069. The application fee was paid by NuVue on
or about November 15, 2017 when its application for an additional Medical Marijuana Optional
Premises Cultivation License was approved.
PREVIOUS COUNCIL ACTION:
Not applicable to this Resolution.
BACKGROUND:
On November 15, 2017 the City of Pueblo’s Retail and Medical Marijuana Licensing Authority
approved an additional Medical Marijuana Optional Premises Cultivation License for NuVue. In
order to have the license issued, NuVue paid the application fee of $6,069. Previously, on
October 25, 2017, NuVue’s attorneys requested a waiver of the $6,069 application fee for the
reasons listed in the attached correspondence.
FINANCIAL IMPLICATIONS:
The City will issue a refund check in the amount of $6,069 to NuVue.
BOARD/COMMISSION RECOMMENDATION:
Not applicable to this Resolution.
STAKEHOLDER PROCESS:
Not applicable to this Resolution.
ALTERNATIVES:
If this Resolution is not approved, the City will retain the $6,069 application fee.
RECOMMENDATION:
None.
Attachments:
Proposed Resolution, Letter to Council
Gradisar, Trechter, Ripperger & Roth
Attorneys at Law A2 AM ,
Nicholas A.Gradisar 1836 Vinewood Lane,Suite 2 d Kate II. Shafer
Charles D.Trechter Pueblo,CO 81005 RECIEVED J ' a K.Ripperger
James Ripperger Telephone: (719)566-8844 co cI thony P.Perko
David A.Roth Fax: (719)561-8436 V) OCT 3 0 2017 Lau atherine Young
Douglas GradisarCity Clerk
(r)c, Pueblo,CO coCb
October 25. 2017 r • `' `o`°
Iffld
Stephen Nawrocki, City Council President Lori Winner
Pueblo City Council Pueblo City Council
1 City Hall Place 1 City Hall Place
Pueblo, CO 81003 Pueblo, CO 81003
Bob Schilling Chris Nicoll
Pueblo City Council Pueblo City Council
1 City Hall Place 1 City Hall Place
Pueblo, CO 81003 Pueblo, CO 81003
Larry Atencio Sam Azad, City Manager
Pueblo City Council 1 City Hall Place
1 City Hall Place Pueblo, CO 81003
Pueblo, CO 81003
Ed Brown, Council Vice President Ray Aguilera
Pueblo City Council Pueblo City Council
1 City Hall Place 1 City Hall Place
Pueblo, CO 81003 Pueblo, CO 81003
Dan Kogovsek, Esq. Gina Dutcher
City of Pueblo Attorney City of Pueblo Clerk
1 City hall Place, Floor 3 1 City Hall Place, Floor 1
.. > > D cbin 1003
t-ut'i.,;,, CO�.� 81003 a.,....., CO..s
RE: NUVUE PHARMA, LLC.
Dear City Council:
Please be advised that this firm represents NuVue Pharma, LLC, a medical and retail
marijuana establishment here in Pueblo. We are pleased and honored to continue our
productive partnership with the City of Pueblo and look forward to years of continuing
mutually beneficial dealings. Since its formation in 2014, NuVue has been able to expand
its operations to the first retail store licensed within City limits, and has maintained full
compliance with all state and local regulatory requirements and taxes. In addition, NuVue
has as of this writing created employment for 55-60 individuals in its medical and retail
Page 2
The purpose of this communication to council relates to NuVue's desire for a second
medical grow license. A medical grow license, of Optional Premises Cultivation ("OPC")
license provides a marijuana entity with the ability to grow medical plants for use in its
medical dispensary or medical infused products facility. NuVue already possesses an OPC
license, (State license No. 403-01656), which has been duly approved by and remains in
good standing with the local marijuana licensing authority. However, pursuant to a recent
change in state law, NuVue has been advised that NuVue is required to obtain a second OPC
license. The reason for this is outlined more thoroughly below. However please accept this
letter as a formal request to council for a waiver of the licensing fee for NuVue's second
OPC license.
Need for License:
NuVue in pursuing this second OPC license is effectively pursuing an increase in the
number of medical plants that can be grown at the facility. The method of doing this is by
way of"designating" a separate OPC license to the facility's already-issued medical infused
products license.
The state of Colorado has taken the position, first informally and then through enactment
of Medical Rule 501(d), that OPCs must be linked or "designated" to a medical center
(dispensary) or medical infused products license. Please make special note that the retail
regulatory scheme does not require that a retail cultivation license be "designated" to a
retail store or retail products manufacturing license.
The state, through its Marijuana Enforcement Division (MED) has informed NuVue that its
currently-approved OPC, License No. 403-01656, is only currently "designated" to NuVue's
medical center, and not to its medical infused-products manufacturing license. When an
OPC is linked or "designated" to a medical center, the OPC may only grow the number of
plants that are necessary to satisfy the patients being serviced by the medical center, and
cann3t grew more than this amount. In contrast, however. if an OPC is linked or
"designated" to a medical infused-products manufacturer, there is not a limit on the
number of plants that may be grown. This was the understanding of NuVue when it first
applied for its state and local licenses, in the belief that the sole OPC would be allowed to
grow the medical plants required to maintain infused products manufacturing. NuVue's
infused products are of paramount importance given NuVue's plans and desire to partner
with Colorado State University-Pueblo in the near future for its research facility and related
operations.
In order to comply with state medical rule 501(d), NuVue has been asked by the MED to
seek a separate OPC license to be "designated" to NuVue's medical infused products license.
Page Three
While this matter is in fact a separate and new OPC license, NuVue has and continues to
view this process as effectively an avenue to increase its plant count to the level needed to
satisfy its medical infused products operations. Put another way, NuVue is pursuing the
license solely for the purpose of increasing its medical plant count to the level that it was
believed that NuVue already could produce, prior to the enactment of 501(d).
NuVue first applied for a second OPC license with the state at a meeting on August 11,
2016. This license was duly granted by the state, State License No. 403-01852. At that time
NuVue was ready to submit at the local level as well, and submitted shortly afterwards.
I-Iowever, because of the upcoming deadline to submit the city retail store application, and
because the city informed NuVue that will only accept one pending application at any given
time, it was decided that NuVue would withdraw the OPC application temporarily from the
City and pursue the retail store city application first. The retail store license was approved
in late June, at which point NuVue resubmitted the second OPC application with the City
and they have been completing their review.
Therefore,to clarify, NuVue's medical licenses situation is as follows:
Medical OPC license, License Number 403-01656. Approved by State and
City. "Designated" to License Number 402-01062.
Medical Marijuana Center (Type 1) License, License Number 402-01062. Approved by
State and City.
Medical Infused Products Manufacturer, License Number 404-00455. Approved by State
and City.
Medical OPC license, License Number 403-01862. Approved by State, but not by City.
"Designated" to License Number 404-00455.
As of this writing, NuV'uc's second OPC license application has been set for the Novemher
2017 meeting of the marijuana licensing authority. This meeting wasoriginally scheduled
for Thursday, November 16, but it is our understanding that this has been or will be
rescheduled to Wednesday, November 15, in order to accommodate the schedules of
several of the board members.
Request for Waiver:
As stated, NuVue's application has been accepted for the November hearing date as
complete. However there is one exception to completeness, that being that the licensing
fee for the second city OPC license application has not yet been tendered by NuVue. This
fee is $6,069.00.
Page Four
NuVue previously sought a waiver of this application fee for this license based on the
factors outlined in bullet points below. However, the licensing board found that the
licensing fee is mandated by law and denied the request. Per P.M.C. 11-10-304(a)(2)(d), an
optional premises cultivation license fee is required if the application was "not submitted,
accepted, processed and heard at the same time as an application for a medical marijuana
center license or marijuana infused products manufacturing license." This same language
is mirrored in Resolution No. 11964,which increased the fee to $6,069.00. This application
for a new OPC license is not paired with one of the others, and therefore the position of the
local authority is that they lack the ability and legal authority to waive the application fee.
We appreciate the position of the authority and the City attorney's office in making this
finding. We have however been told by Assistant City Manager Scott Hobson that Council
does possess the authority to waive the fee. Pursuant to P.M.C. 11-10-304(b), City Council
may approve increases or decreases in the foregoing fees by resolution. Please therefore
accept this letter as NuVue's request for Council to please effectuate this one-time waiver of
the application fee.
Reasons Justifying Waiver:
NuVue feels, in consultation with City officials, that the requested waiver of the one-time
application fee of $6,069.00 is justified based upon the unique circumstances for this
second OPC license. These are:
• There is in fact no change in the facility in which medical plants are grown, or in any
cultivation method that would actually warrant a modification of premises or the
need of a city Conditional Use Permit;
• The sole purpose and need for this City license is for NuVue to maintain its level of
operations in regards to increased plant count for the marijuana infused products
manufacturing license. NuVue's infused products will and are of great importance
as it seeks to faUiitate valuabh and i nportant scientific research at the new CSU-P
facility;
• NuVue seeks only to maintain its regulatory compliance with the state; to NuVue's
knowledge the City possesses no formal requirement that an OPC be designated or
linked to either a medical center or a medical infused products license;
• NuVue is in effect being asked to obtain a license for operations that are already
underway; put another way, NuVue is already licensed to conduct the activity in
question, and the license is essentially a formality;
• Given NuVue's current licensure status with the City, NuVue has duly paid all
requested and required license fees (both for original licensing and renewals),
amounting to approximately $48,000.00. This amount is independent of funds
required to bring NuVue's facility into compliance with applicable retail store
standards as part of the retail store licensing process;
Page Five
• Had the state requirements of 501(d) been enacted at the time of NuVue's original
medical application, NuVue would have certainly sought a second OPC license at
that time, such that the OPC license would have been "submitted, accepted,
processed and heard at the same time as an application for a medical marijuana
center license or marijuana infused products manufacturing license" per P.M.C. 11-
10-304(a)(2)(d). Consequently, the fee would not have been required as of that
original submission.
NuVue takes its responsibilities to the City as a community partner seriously and in good
faith; as outlined above its ability to create work for dozens of Pueblo city residents is but
one example of its efforts to generate goodwill with the City.
Whether or not the above-requested waiver is granted, NuVue will very certainly continue
to duly pay all required state and local taxes and assessments as it has done in the past.
However, it is hoped that this waiver can and would be granted such that the second OPC
may be approved by the licensing authority at the November meeting; NuVue's possession
of the second OPC license will allow it to continue to expand operations to the benefit of
both itself and the City at large.
NuVue is very willing to provide further information if requested to Council on this point,
and we thank Council in advance for its consideration in this matter. Appropriate city
officials should please feel welcome to reach out to this office or to NuVue representatives
should they seek anything further in this matter. We would respectfully request that
Council entertain appropriate resolution to this end at the next regularly-scheduled council
meeting, set for November 13, 2017.
Very truly yours,
GRADISAR,TRECI ITER,f R, RIPPERGER& ROTH
yea i;al ro of xrdio4+0,
Nicholas A. Gradisar
A ony P. Perko