2018 COA 135
Colo. Ct. App.2018Background
- Starbuds operated a retail marijuana store in an I‑MX‑3 (industrial mixed‑use) zone in Denver; it obtained a zoning permit for retail sales (with floor plans showing "veg" and "bloom" rooms) and later obtained a retail marijuana cultivation (RMC) license from Denver's Department of Excise and Licenses.
- Denver zoning expressly designates plant husbandry (including marijuana cultivation) as "not permitted" (NP) in I‑MX‑3 zones; the Zoning Code bars a primary use expressly prohibited from being treated as an accessory use.
- Starbuds applied to renew its RMC license in 2016; the Department initially renewed it, then discovered a hearing request and scheduled a public hearing at which neighbors opposed renewal.
- The hearing officer found plant husbandry is not a permitted accessory use in I‑MX‑3, concluded the original RMC was issued in error, and recommended denial of renewal under D.R.M.C. §§ 6‑214(a)(2)–(3); the Department adopted the recommendation and denied renewal.
- The Denver District Court affirmed. On appeal, the court upheld the denial, reasoning the RMC license was never permitted under the zoning code, the Department had authority to hold a hearing under general licensing provisions, equitable estoppel did not apply, and denial did not effect an unconstitutional taking.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plant husbandry is a permitted accessory use in I‑MX‑3 (governs RMC eligibility) | Starbuds: its zoning permit (with "veg"/"bloom" rooms) and past renewals show plant husbandry was an implied accessory use, so RMC governed by §6‑214(a)(1) (no hearing) | Department: Zoning Code expressly prohibits plant husbandry as a primary use in I‑MX‑3; an expressly prohibited primary use cannot be an accessory use; permit did not authorize cultivation | Held: plant husbandry is not a permitted primary or accessory use in I‑MX‑3; RMC was issued in error and renewal denial affirmed |
| Authority to hold a renewal hearing | Starbuds: if license governed by §6‑214(a)(1), no hearing authorized | Department: even if §6‑214(a)(1) applied, Dept. had independent, general authority under D.R.M.C. ch.32 (§32‑20) to hold hearings and refuse renewal when original issuance would have been denied | Held: Dept. properly held a hearing under its general licensing authority; independent basis supports denial |
| Equitable estoppel (reliance on mistaken renewal) | Starbuds: it relied to its detriment on the Department's initial renewal and zoning permit | Department: issuance was an obvious error; Starbuds knew zoning prohibited cultivation and offered no evidence of detrimental, reasonable reliance | Held: equitable estoppel not available—no reasonable, detrimental reliance established |
| Constitutional taking / due process claim | Starbuds: denial of renewal deprived it of vested property interest in the license and lacked due process | Department: there is no vested right to license renewal; Starbuds received notice and a full hearing | Held: no taking; no vested right in renewal; due process satisfied by hearing and opportunity to present evidence |
Key Cases Cited
- City of Commerce City v. Enclave W., Inc., 185 P.3d 174 (Colo. 2008) (standard for reviewing agency construction of law)
- City & Cty. of Denver v. Bd. of Adjustment, 55 P.3d 252 (Colo. App. 2002) (deference to agency interpretations when reviewing zoning decisions)
- Ficarra v. Dep't of Regulatory Agencies, 849 P.2d 6 (Colo. 1993) (no vested right in license renewal)
- Bd. of Cty. Comm'rs v. Buckley, 213 P.2d 608 (Colo. 1949) (licensees assume risk of nonrenewal; no vested renewal right)
- City of Northglenn v. Grynberg, 846 P.2d 175 (Colo. 1993) (takings require unique injury depriving use/enjoyment of property)