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Marijuana Growers Sow Displacement Fears in Denver

The city’s cultural community supported the movement to legalize recreational cannabis—but now artists are competing with “ganjapreneurs” for cheap industrial space.

The arrival of legal cannabis has been an economic boon for Denver. But growers are competing with artists for some of the same industrial spaces. (David Zalubowski/AP)

Mark Sink, a fine art photographer, moved home to Denver from New York City in 1991. He bought his two-story brick house in the city’s urban Lower Highland neighborhood for $50,000, with the help of owner financing. More than two decades later, houses like his in the now-trendy LoHi neighborhood go for upwards of $1 million, and Sink often finds developer business cards in his mailbox asking if he’s willing to sell.

“First come the artists. Then come the developers. Then it’s all over for everyone,” says Sink, who co-founded the Museum of Contemporary Art Denver.

That has long been a familiar lament in American cities, but Denver’s gentrification narrative has an herbal twist: Since 2014, when recreational marijuana became legal in the state, the arts community and other residents who rely on low rents have been feeling the economic pressure from marijuana entrepreneurs—known locally as ganjapreneurs—who are often after the same cheap spaces to sell and grow weed.

There’s an irony to this, as Sink notes. Lots of artists were big supporters of the 2012 ballot referendum that led to legalization. “Who knew marijuana would be one of the strong forces keeping us out of affordable spaces?” Sink says.

The impact of legalized marijuana on rising real estate values is difficult to quantify. Rents were rising around here before legalization, thanks in part to rapid population growth. According to the online real estate database company Zillow, Denver renters spent around 30 percent of their income on rent between 1980 and 2000. By the end of 2014, they spent more than 38 percent. Over the past decade, the region has been enjoying an economic renaissance, with large gains in industries ranging from high tech to mineral extraction. Many once-affordable neighborhoods bear the tell-tale signs of the boom: a proliferation of urban condos, yoga studios, and branded luxury. Hang around town for a day and you’ll hear the refrain from gas station cashiers and politicians about how Denver gains 1,000 citizens a month. From 2004 to 2014, the city gained more than 430,000 residents.

Some have come for the jobs, others the lifestyle. And some have come simply for the weed.

Since legalization, the state has awarded more than 300 licenses for Denver-based grow operations. Many of those growers leased or bought industrial warehouses, driving up their values—and driving artists out of the low-rent spaces they once occupied. Artists who crave the raw square-footage and affordability of warehouse space for their studios have found that the same real estate also fits the needs of cannabis growers. Dustin Whistler, a broker and founder of Forte Commercial Real Estate, says rents for industrial spaces have risen 40 percent since 2012. Spaces that before legalization were all but unrentable are now going for $10 to $12 a square foot, he says.

The displacement pressure related to the marijuana boom is impacting all manner of Denverites, not just artists. Analysis by the Denver Post found that the industry is clustered heavily in low-income neighborhoods along Denver’s I-70 and I-25 corridors, a mix of residential and light industrial areas that are also home to much of the metro’s Latino community. These industrial areas are also where artists have traditionally found inexpensive spaces to live and work.

Lauri Lynnxe Murphy, an artist and curator, has been working from a rehabbed garage near the River North Art District for 10 years. Her landlord has been good to her, but she knows her days in her studio are limited. She expects to lose her lease any day. Likely, it will push her out of Denver. “You can’t deny there are a good things and bad things that have come from legalization,” Murphy says. “But you can’t say it hasn’t caused a lot of pain.”

Legalization has boosted a strong tourism market and helped fill tax coffers. According to the Marijuana Policy Group, a Denver-based market research firm, legal marijuana sales generated $2.4 billion in economic impact in 2015. It brought 18,000 jobs and $121 million in combined sales and excise tax revenues. Adam Orens, a partner of the group, said he expects the 2016 numbers to be larger. Marijuana is a Colorado growth industry, he says, and that will likely continue, although the state may face competition if other states legalize recreational marijuana.

But Orens also says the industry is given too much credit—and takes too much blame—for the economic changes in the city and the state. He thinks the rising cost of living here is a market adjustment; modern Denver now has more in common with high-cost coastal cities like San Francisco or Boston than other metros in the Mountain West. “In 2014, marijuana legalization was a national curiosity; it was the reason a lot of people came to Colorado,” he says. “Now it’s just another amenity, like brew pubs, the Colorado Rockies, and skiing.”

Cheap rent, however, is no longer one of those amenities, and that has some local artists worried about the longer-term fate of the city’s cultural scene. In December, the city shut down Rhinoceropolis, a popular underground venue and heart of Denver’s vibrant DIY culture, over fire code violations—part of a wave of such closures that swept the country after the Ghost Ship fire in Oakland that killed 36 people. But the artists who lived and worked there say the 11-year-old venue was targeted as part of the transformation of the city’s River North Arts District. “The city is basically sweeping us out of the places that we create and treating us in a similar way they treat homeless people,” says Stephan Herrera, an artist who has lived at both Rhinoceropolis and the venue’s sister space Glob, which are not zoned residential.Herrera doesn’t blame legal marijuana. But without the warehouses to relocate to, he says the DIY arts community has been dispersed, which makes it harder for younger artists trying to break in to the scene.

It’s a topic of particular interest to Chandler Romeo and her husband Reed Wiemer, who own most of the buildings in the Navajo Street Art District in Northwest Denver. The couple, both artists, moved to Denver in 1980 and bought their first building a few years later. Over the years, they added four more, started an art co-op that became the Zip 37 gallery, and rented cut-rate space to galleries. Among them is Pirate: Contemporary Art, one of Denver’s oldest. “We became old crappy building collectors,” Romeo says, buying boarded-up buildings that no one wanted.

Their real estate holdings made Romeo and Chandler rich, on paper. But rising taxes, insurance and maintenance costs were bleeding the couple’s finances. Romeo and Chandler say they were forced to significantly raise rents in their buildings. Pirate and two other galleries have since left the Navajo Street Art District, and the couple say new tenants, including a nonprofit coffee shop, will move in. The couple says the artists understand, and they haven’t lost friends. “We were really concerned about that. It is our peer group,” Romeo says.

The city and cultural groups are floating several proposals to help artists find affordable places to work and live in Denver. One proposed development includes 90 spaces for low-income artists in the River North Art District. But Mark Sink, for one, is suspicious that artists can thrive on these sort of official handouts; he feels that the city and developers are selling the artistic history of neighborhoods to promote the condo-heavy development that is changing the face of the neighborhoods. “It’s just a big front,” he says. “At $30 a square foot you are an arts district? Yeah, sure.”

For his part, Sink has recently purchased a small building outside the city that has been boarded up since 1980. He is not optimistic about the future of the city’s cultural scene.

“In 20 years, it will be, ‘What happened? Where are all the cool people?’”

About the Author

  • Joe Eaton is a former reporter at the Center for Public Integrity, the Washington City Paper, and the Roanoke TImes. He now teaches at the University of Montana School of Journalism.