A proposal to establish the city of Rutland's first home cannabis cultivation site is highly controversial and could set a legal precedent in Vermont's nascent cannabis retail industry.
The City of Rutland's Development Review Board is reconsidering the residential license issued by the planning and zoning administrator to city resident Fred Watkins in February after more than a dozen neighbors asked that it be destroyed. I am evaluating it.
Watkins plans to set up a marijuana cultivation operation in a garage-like building on his property, about a mile from downtown. He said he hopes to produce 30 pounds of product every two to three months and sell it to pharmacies.
After a second public hearing on the issue Wednesday, the Development Review Board will have 45 days to decide whether to grant the neighbors' request to revoke the permit. Like Watkins, other neighbors told VTDigger they plan to appeal the board's decision in court if it doesn't go their way.
In public hearings and written submissions to the board, neighbors argued that the marijuana cultivation site on Watkins' East Washington Street property would detract from the residential character of the area and cause a nuisance to residents. He said it would bring. They say the use of cannabis will result in increased noise, odors and 24-hour activity, which they say violates local zoning laws.
The neighbors' claims also included public safety issues and tied them to the nature of Watkins' business venture.
“We believe the approved business poses safety concerns. It has attracted criminals to the neighborhood who may attempt to rob the subject or adjacent properties,” said 14 residents of the East Washington Street area. the people said in a joint appeal letter.
An attorney representing Susan Kelly, a neighbor who filed the original commission appeal, also questioned whether Watkins' application for a home business license received preferential treatment from City Hall because of his ties to Mayor Mike Doenges. However, the mayor denies this charge.
Another lawsuit recently filed in court alleges Doenges and Watkins owe money to a cannabis consultant named Wesley Tipton, who last spring built and operated a growing system on Watkins' property. The company said it hired him to provide the above advice. The complaint said Doenges and Watkins were business partners.
“It just raises questions and clouds every decision that has been made in this case,” attorney Tom Bixby said in an interview.
According to Bixby, an event schedule prepared by Rutland Planning and Zoning Administrator Andrew Stoniste indicates that on Dec. 22, Storniste's office advised Watkins that home indoor grow facilities are considered cottage industries. He said that he was informed that the plan would need to be evaluated by the administrative agency. Development review committee.
Seven days later, Bixby said, the timeline shows the department reversed its original direction and told Watkins that his cannabis business could qualify as a home-based business. A business license is required, but board approval is not required.
“They gave him permission to move on,” Bixby said. “If it had been someone from outside, they wouldn't have been treated the same way.”
Memo from the mayor
Doenges, who was elected mayor of Rutland in March 2023, said he never tried to influence Stoniste to give Watkins a license to grow marijuana at his home. Mr. Doenges acknowledged that he and Mr. Watkins were friends and were considering working on various projects together, but in February he issued a memo to Mr. Strniste and other city officials to discuss the permitting process. He said that City Hall emphasized that Mr. Watkins should not be given preferential treatment.
Doenges opened his memo by saying he had heard concerns about Watkins' proposed cannabis business and that people knew they were friends.
“While it is true that we have a pre-existing relationship with Mr. Watkins, we would like to emphasize that this relationship has not and will not impact the permitting process here at City Hall,” Doenges wrote in a Feb. 8 memo. It is written in He was also addressed to the Rutland public works commissioner, building inspector and city attorney.
Doenges also said he has chosen to distance himself on the matter. “To avoid potential conflicts of interest or bias, I have refrained and will continue to refrain from any discussion or decision regarding the approval of Mr. Watkins' zoning permit,” according to a memo provided by Mr. Stoniste to VTDigger. .
Doenges said he and Watkins discussed starting a marijuana cultivation operation in West Rutland last year, but not in Rutland. He said these plans are reflected in the state's business report.
The domestic limited liability company was formed by the mayor's wife, Sara Doenges, in April 2023, according to business records from the Vermont Secretary of State's office. Watkins' stepdaughter and Rutland City Council member Kiana McClure; And Mr. Tipton is now suing the mayor and Mr. Watkins. The company was classified as “Other general miscellaneous farming'' in the agriculture field.
The venture “ended up not working out,” Doenges said in an interview. When asked, the mayor said he had no idea Watkins had set up a marijuana grow site on his property until he learned about it through the city's permitting process.
Both he and Watkins deny breaching their contracts with Tipton or that they owe him money.
Doenges said he personally believes the residential area of Watkins is not an appropriate location to establish a cannabis cultivation site. “I don't know if that kind of operation is appropriate for that part of the city,” he said, adding that in his role as mayor he remains neutral on the issue.
Doenges claims there is no evidence of wrongdoing on his part, but that some community members are implicating him in the Watkins case as a strategy to win an appeal to the board.
“I never thought people would try to use my name to win battles in the permitting process like they used to,” Doenges said. “I never thought that my name would be involved because of past connections.”
Rick Smilsky, a spokesman for the group of 14 neighborhood appellants, does not believe Doenges influenced Watkins' permitting process. But at the same time, he said the mayor should have been more transparent about Watkins and his plans to start a cannabis business before it became public in the Tipton lawsuit.
“I don't think he abused his position,” Smirski said of the mayor. “I don't think it's very good for him not to make this public.''
bring a lawsuit to court
If Smilsky and his group lose their appeal to the Development Review Board, he said they intend to file a lawsuit in the Vermont Environmental Court, which has jurisdiction over the matter. Bixby said his client, Kelly, will also appeal.
Watkins has the same plan even if he loses at the board level. “I will never, 110%, back down,” he told VTDigger.
James Pepper, chairman of the Vermont Cannabis Control Commission, said if the case goes to court, it would be one of the first involving the state's relatively young retail cannabis industry. He said a lawsuit could clarify questions about the law and how it applies to the cannabis industry.
“I haven't seen any actual litigation on this yet,” Pepper said. “Maybe Rutland will be a test case.”
Stoniste, the city's planning and zoning administrator, said he decided to issue Watkins' home business permit after evaluating the impact his proposed business would have on the neighborhood. He said the decision was made in consultation with the city attorney and outside counsel, considering factors such as noise and odor.
Storniste said he also followed the state's guidance that cannabis businesses would not be subject to independent oversight as Vermont strives to support the growth of the cannabis industry.
“When all the cannabis stuff came down from the states, the states said we should treat cannabis like any other product,” he said. “Take the cannabis out of this analysis and replace it with a tomato plant. It changes your calculations and perception a little bit.”
Storniste said after reviewing local regulations for several days, he advised Watkins to apply for a home business license rather than a cottage industry license. Mr. Stoniste, who was appointed to the position by former Mayor David Allaire, said he was never pressured by Mr. Doenges to govern in any way regarding Mr. Watkins.
“I always understood that his partnership with Fred Watkins was an out-of-town deal, never an in-town deal,” Stoniste said.
But despite guidance from city officials, Watkins believes state law allows him to operate a marijuana grow facility in his home without needing a permit. He also likens the situation to planting tomatoes in his home garden before selling them on the market.
“You don’t need a permit to grow a vegetable garden in your garden,” he said.
Watkins denies claims by neighbors that his indoor marijuana cultivation business is a nuisance to the neighborhood. He told the Development Review Committee that the equipment used would not make unnecessary noise and air filters would eliminate odors. And because it's a wholesale business, Watkins said, they only deliver to pharmacies and don't have customers coming to their homes.
He also denied any public safety concerns about the business. “Marijuana is not criminal,” Watkins said, but he added that he has multiple surveillance cameras and security alarms installed on his property.
“Currently, the safety of our neighbors is ensured,” he said.
