ROARING FORK BROADCASTING COMPANY
Pitkin County’s first and and the Roaring Fork Valley’s largest legally operated marijuana farm might have sprouted its last bud.
Aspen-based Silverpeak Corp. earlier this summer shut down its 4.7-acre marijuana farm and cultivation facility outside of Basalt, owing its landlord more than $20 million in rent after abandoning the property less than two years into a long-term lease agreement.
That’s what the property’s landlord alleges in a breach-of-contract lawsuit filed last week against tenant Silverpeak Corp. and businessman and race car driver Chapman Ducote, who committed a guarantee of up to $855,400, plus all unpaid property taxes, on the lease.
“The Guaranty immediately became enforceable upon a default under the Lease by Tennant,” the suit said.
Neither defendant had been served with the suit as of Friday. Silverpeak Corp.’s director of operations and registered agent, William Brookshire, declined comment for this story. A message to Ducote’s assistant was not returned Friday.
Aspen lawyer Kenneth Citron, of Klein Cote Edwards Citron LLC, filed the suit on behalf of Basalt Real Estate in Pitkin County District Court on Aug. 12.
“The lease has a provision in it and as we say in the pleadings, they are not relieved of their rental obligation just for moving out, so we’re seeking damages for the full term of the lease,” Citron said. “We’re also seeking damages against the guarantor, who has a limited guarantee, not the full amount.”
The property’s address at 24480 Highway 82 has a 19,925-square-foot warehouse, a 5,075-square-foot office building and a 2,536-square-foot residential house, county records show. Construction on the complex was completed in 2014; it was then hailed as a state-of-the-art facility.
“At the time of its build, it was the most technologically advanced grow facility in Colorado. This 20,000-square-foot building (the warehouse) is Pitkin County's largest marijuana grow operation,” says information on the website for G.M. Johnson, the project’s general contractor.
Silverpeak Corp. voluntarily surrendered its Colorado-issued license to run a retail marijuana cultivation facility on the property in June, according to the state’s marijuana enforcement division. Pitkin County’s marijuana enforcement officer also was notified of the closure, an official said last week.
The property’s owner of record is Basalt Real Estate LLC, an affiliate of Des Moines, Iowa-based Hurd Real Estate, which buys, sells, develops and leases commercial property.
“We are marketing it for sale or for lease,” said Richard Hurd, the company’s founder and president, on Friday. “The only dispute we have is over rent, obviously. Silverpeak quit paying and moved out.”
Silverpeak, however, did not abruptly pick up and leave, and it apprised the landlord of its plans to vacate the property ahead of time, Hurd said.
“I still have conversations with the principals of Silverpeak,” he said. “It’s not like we are at each other’s throats, but we’ve got to try to protect our investment there and that’s what is going on.”
The facility’s harvest — plants, buds and all — was removed when Silverpeak left, said Aspen lawyer Kenneth Citron of Klein Cote Edwards Citron LLC. Citron filed the suit on behalf of Basalt Real Estate in Pitkin County District Court on Aug. 12.
“The inventory was removed and I’m relieved that it was removed because the owner of the building is not licensed (to grow marijuana),” Citron said, “so if they’d left anything behind, that would have been problematic.”
The litigation over the cultivation facility does not concern the operations of Silverpeak Corp.’s dispensaries statewide. That includes the Silverpeak store in Aspen (which sells retail and medical marijuana) and six others in Colorado called The Dab by Silverpeak. Four of those dispensaries are on the Front Range. Glenwood Springs and Parachute also have Dab by Silverpeak retail locations.
Earlier this year, Silverpeak Corp.’s Basalt farm and its seven retail locations were marketed for sale by a San Diego-based firm called Greenlife Business Group Inc.
According to online marketing material on Greenlife’s website, up for sale were “7 dispensaries and 1 cultivation strategically positioned in PRIME high traffic cities all over Colorado. This vertically integrated company portfolio has 7 stores in Colorado all PRIME LOCATIONS, making their mark on the entire State. … Positioned as one of the largest cannabis retail companies in Colorado, this portfolio offers not just the dispensaries, but the option to purchase the cultivation asset as part of the sale.”
June 20 was the call date for offers, according to Greenlfe’s website. Drew Mathews, CEO of Greenlife and the contact for the Silverpeak listing, did not respond to a telephone message last week.
Silverpeak Corp. owned the property before it sold nearly four years ago to its current landlord in a type of deal called a “sale-leaseback.”
Here’s a snapshot of the property’s history during its time as a pot farm:
• Jan. 21, 2020 — High Valley Farms LLC sells for $8.35 million to Silverpeak Real Estate LLC
• Dec. 30, 2020 — Silverpeak Real Estate LLC sells for $9.3 million to Basalt Real Estate LLC
• Jan. 1, 2022 — Silverpeak Corp. signs 20-year lease with landlord Basalt Real Estate LLC
• June 2024 — Silverpeak Corp. vacates premises
• Aug. 12, 2024 — Basalt Real Estate sues Silverpeak Corp. and Chapman Ducote, each for breach of contract.
Hurd owns a home in the Roaring Fork Valley and said he’s familiar with the local real estate market. The Basalt area property’s potential is not restricted to being a marijuana cultivation facility.
“I think it’s pretty much open,” he said. “We’re going to have to go work with Pitkin County to get things changed if we want to put another use there. I think there are a lot of things it could be. What it will allow remains to be seen. It’s got a house on it; it’s got a number of buildings on it. There’s a lot of potential there.”
Colorado municipalities, townships and counties were authorized to allow retail sales of marijuana on Jan. 1, 2014, after state voters approved Amendment 64 in November 2012.
Marijuana sales have been down statewide in recent years as more states legalize THC for recreational use, and Aspen hasn’t been an exception.
Marijuana sales in Aspen of $7.8 million in 2023 dipped to their lowest annual dollar volume since the city began tracking the sector. Last year’s sales volume was 19% down from the $9.6 million produced in 2022. The five years before 2022 all generated annual sales topping $11 million, according to city of Aspen sales tax reports.
In 2021, Aspen dispensaries saw $11.2 million in sales; 2020 yielded $11.3 million; 2019 brought in $11.9 million; 2018 accounted for $11.8 million; and $11.3 million was recorded in 2017.
In prior years retail marijuana was legal — 2014, 2015 and 2016 — the city combined the industry’s sales figures with those from the liquor sector.