DeBeque, Colo.: The Financially Struggling Town Saved by Marijuana Sales

by | April 7, 2016

By David Kelly

When the oil and gas industry tanked and plans for gambling crapped out, this conservative town of ranchers and roughnecks found salvation in an unlikely place.

Weed.

"We are going to survive by it," said Darrel Kuhn, who owns the local liquor store, "because we sure as hell can't survive without it."

He may be right.

Colorado's billion-dollar marijuana industry has boosted the economies of many struggling towns. Empire, Trinidad and Parachute have all benefited from infusions of pot money. But DeBeque, on Colorado's Western Slope, owes its very existence to the cannabis trade.

For generations, oil and gas money paved the roads, built the schools and beautified the parks in this town of 500 along the Colorado River. But over the last few years, plummeting fuel prices have reduced those revenues from a high of $260,000 annually to around $17,000.

"We needed to supplant that loss with something else," said Lance Stewart, the town administrator. "Otherwise we would have dissolved as a town into Mesa County."

Plans to introduce casinos fizzled and the famous wild horses in the surrounding tablelands couldn't draw enough tourism to dent the deficit. Meanwhile, the balance sheet looked increasingly bleak. So in June 2014, after a contentious debate, DeBeque voted 69 to 65 to become the first community in the county to open its doors to marijuana grow houses and recreational pot shops.

Town clerk Shirley Nichols was skeptical, but a trip to a Denver dispensary changed her mind.

"I expected to see people laying on the ground, but it was the cleanest place on the block," she said. "So I lost some of my reservations."

Jim Roberts, a former gas plant operator in DeBeque, was mining for gold in Northern California when he got the news.

"I was literally in the water with a gold dredge when I heard about it," he said.

He hopped in his car and headed back to Colorado. Driving along Interstate 70 in DeBeque, he spotted a truck stop for rent, made a call and opened Kush Gardens a few months later, the first recreational dispensary in Mesa County.

On a recent morning, cars streamed off the highway and into the parking lot. Heavily armed security guards with dogs patrolled the perimeter. Inside, customers loaded up on weed.

"This is a rare situation," said Roberts, maneuvering through the crowded store. "Our sales are some of the best in the state. People in Denver even look enviously on them."

Roberts, 30, grew up in DeBeque and knows many initially opposed his business.

"Now that the tax dollars are coming in, I think they have changed their minds," he said. "Dollar per dollar, the impact we are having is much stronger here."

A mile away, Elk Mountain Trading Post was also thriving, with patrons stopping in from as far away as France and Spain. Even more came from Utah about an hour west of here.

Randy and Suzanne Sheley built Elk Mountain by hand.

"Many locals were afraid of crime and people hanging out," Randy Sheley said. "But we got to know them and they saw that most of our customers are older people with money. The turnaround in their attitude has been amazing."

Their store is a laid-back, artsy place with bearskins adorning the walls along with jewelry made of elk teeth. A pair of moose antlers sits at the reception desk.

Suzanne Sheley said God led them into this business as a way of offering healing to others.

"Randy is in the Knights of Columbus and I am in the Women's Auxiliary," she said. "We're not a bunch of drug dealers."

More like cash cows.

DeBeque is now collecting a 5% local excise tax on each shop, racking up $340,000 in revenue last year. That makes up for the lost petroleum dollars and then some. The dispensaries also pay a 15% state tax.

"In a year or so we are hoping our grow facilities will generate even more money," Stewart said. "I have heard the $1-million figure bandied about, but I think that's optimistic."

The question now is how to spend the windfall.

The community center got a new floor and air conditioning. City streets are being repaired. Sewers will be fixed. Curbs and gutters are getting replaced. And pot money is being set aside for scholarships at the high school.

But DeBeque isn't taking any chances. It hopes to sock away perhaps a quarter of its cash in a savings account should pot go bust or if other Mesa County towns open recreational dispensaries, breaking up DeBeque's current monopoly.

Yet rather than worry about a bust, many are hoping for a boom.

The sleepy downtown is still fairly spartan. There is a post office, a community center that holds bingo nights, a small grocery store and a life-size sculpture of a horse. But a new restaurant may start up in the future, there is talk of a bar, and just recently Caffe Tazza, a specialty coffee shop, opened its doors.

On its second day in business, owner Amanda Sheley, 25, Randy Sheley's daughter-in-law, waited on customers while trying to keep her energetic toddler occupied.

"DeBeque is growing and I want to get my foot in the door," she said. "I think the pot business will bring people into town and into the store."

Not far away in a gravel parking lot, liquor-store owner Kuhn talked with Robbie Arnold of High Country Sporting Dogs, who was trying to sell him a Belgian Malinois to guard his future marijuana grow site.

Arnold has already sold dogs to Kush Gardens.

Kuhn, 63, is one of three growers expecting to start operations in the months ahead. He plans on raising 1,800 pot plants.

Marijuana is personal to him. Kuhn spent years in construction and demolition — building things and blowing them up. One day he fell 30 feet down a mine shaft, breaking many bones. Nothing relieved his pain like cannabis.

Now Kuhn believes pot can heal his town.

"And see those potholes over there," he said, gesturing toward the road. "Weed is going to fix those too."

Kelly is a special correspondent based in Denver.