January 2020

High Hopes: Rising Tides in the Desert

Part 3: How federal cannabis regulation trickles down to raise water prices for Pueblo businesses.

A greenhouse worker hand-watering plants during the flowering stage at White Diamond Botanicals in Pueblo, Colorado. (Noah Weeks for PULP.)

By Noah Weeks

High Hopes is a collaboration between PULP and Colorado College’s Journalism Institute.

Cascading down the slopes of Rocky Mountain bluffs before gathering in the Arkansas River, the majority of the water in Pueblo has survived quite a journey before emerging out of the tap.

“Pueblo Water’s supply is 100 percent surface water,” reads the county’s 2019 Water Quality Report. Before being pumped to the Whitlock treatment plant nestled in northwest Pueblo, the water supports recreation and local wildlife in the Pueblo reservoir.

In other words, it’s easily accessible by the public — unless you want to grow cannabis. In that case, you need a lawyer’s litany of proof that the water you use was never touched by the federal government (or their lands or pipelines or processing plants — or anything).

Kevin Niles, general manager of the Arkansas Groundwater Users’ Association, or AGUA, a group that tries to “provide water for augmentation at the lowest cost possible,” provides an alternative source of water.

“Our company owns water assets,” Niles said. “My certified shareholders are guaranteed some sort of water allocation every year.”

In 2014, when Niles assumed his role in AGUA, he says the Arkansas Basin was experiencing a “great green rush.” Five years later, consolidation has left a gulf where many hopefuls once stood, according to Niles and other growers. Niles’ own association has gone from 16 to four marijuana growers since 2015.

“I mean, the strong will survive,” Niles said. “So all these mom and pops that came in here, all these fly-by-nighters that came here to grow marijuana, and make a quick buck, and get out did so, and now they’re gone.”

Kent Ricken, general manager of the Colorado Water Protective and Development Association, says the ripple of cannabis legalization with Amendment 64, the 2012 statewide Colorado ballot measure legalizing possession, consumption, and sale of cannabis here, has even been felt earlier in the supply chain. “When the seller of the water realized what you were using it for, that drove the price of the native source up,” Ricken said.

The reason? “If we were not able to really prove black and white that we did not use federal sources, we have the liability of the Feds coming back on us,” he added. For Ricken, that meant charging “10 times more” for water used for cannabis production.

For Niles, that’s $1,000 for cannabis farmers and $75 for alfalfa farmers.

Balaji Rajagopalan, a professor at the University of Colorado in Boulder who teaches hydrology, has warned since 2009 that in Colorado by 2057, “the risks of fully depleting reservoir storage will increase seven-fold under current water-management practices,” according to a newsletter published on University of Colorado’s website. While environmental concerns are exacerbated by water-intensive crops such as cotton or rice, the cannabis industry is an outlier in water efficiency.

“I think all of the grow operations in Pueblo County combined don’t equate to the water use of an average alfalfa farmer,” said Rachel Zancanella, Lead Assistant Division Engineer at the Colorado Division of Water Resources Division 2 office in Pueblo. Although Zancanella’s office receives some complaints from community members regarding cannabis, it’s often a concern about cannabis operations using water not designated for cannabis.

Environmentalism, these past five years, has not been a large part of the conversation. Entering 2020, paradoxically, environmentalism has become a boon for the cannabis industry.

“In 2018, Congress passed the 2018 Farm Bill, which was signed by President Trump in December of 2018, which de-schedualized and removed industrial hemp from that controlled substance act,” Niles said. Although industrial hemp was bred to be free of THC (0.3% or less), or tetrahydrocannabinol, and therefore is non-psychoactive, federal regulators didn’t remove it from its classification as having “a high potential for abuse” until 2019. The 2018 Farm Bill, in effect, allows hemp to use alfalfa-priced water.

“You get a crop every year with hemp,” said Karson Beckstrom, owner-operator of White Diamond Botanicals in West Pueblo. “With a forest you cut down once, you get one every 20 years.” Beckstrom says the hemp crop could be processed into a high-tensile strength mix of concrete, be spun into a fabric that could “replace a lot of cotton products,” and even be converted into biofuel.

Product innovation has been the status quo since industrialization, so is hemp a market disruptor? It comes down to simple math: hemp requires between 2,401 and 3,401 kilograms of water per kilogram harvested compared to cotton’s required 9,758 kilograms of water per kilogram, according to the Stockholm Environment Institute.

The environmentalist and capitalist stars have aligned for hemp, so regulation has followed.

Medical and recreational marijuana, however, is categorically different. Although it holds comparable economic promise to and is as water-efficient as hemp, marijuana remains a drug with limitations prescribed by the federal Controlled Substances Act.

As a drug, marijuana should be regulated separately from industrial hemp in order to protect consumers. However, proving irrigation water never came from a federal entity is a limiting factor for economic growth.

For AGUA, a nonprofit member organization, all that paperwork required to prove their cannabis-water is air-tight means charging around $1,000 per acre-foot, which is simply too high an entrance fee for a startup economy to outlast consolidation for long.

About the Authors

Miriam Brown

Originally from Memphis, Tennessee, Miriam is a student journalist at Colorado College’s Journalism Institute. She worked for CC’s independent student newspaper, The Catalyst, for two years in a variety of roles, including reporter, section editor, copy editor, and co-editor-in-chief.

Michael Gorman

Junior, studying race, ethnicity, and migration studies and journalism at Colorado College. From Bethesda, MD, with journalism experience in the Journalism Institute at CC as well as running The Sideline Observer, a student-run online media organization. @SidelineOMike

Noah Weeks

Noah grew up in St. Louis, MO, and is a senior Film and Media Studies major at Colorado College. His interests include public policy, political journalism, and sustainable international development, and his documentary “Guns for Everyone” was featured on Rocky Mountain PBS’s series “In-Short.” Noah can be found on @WeeksNoah.

Ana Mashek

Ana is from Swarthmore, PA. She’s currently a sophomore at Colorado College, where she is pursuing a degree within their Journalism Institute. She works for the school’s independently run newspaper, The Catalyst, as both a writer and layout editor. @ana_mashek

This series was produced by Colorado College journalism students and PULP.

High Hopes

What has happened to Colorado’s ‘Napa Valley’ of weed?

Intro: What has happened to Colorado’s ‘Napa valley’ of weed?

In 2014, Pueblo was referred to as the “Napa Valley” of cannabis, but by whom?

Part 2: License and Registration, Please

What does it take to earn a license in a tightening Pueblo cannabis industry?

Part 2

Part 3: Rising Tide in the Desert 

How federal cannabis regulation trickles down to raise water prices for Pueblo businesses.

Part 3

Part 4: Bloom Doom, Seedless in Pueblo

How federal cannabis regulation trickles down to raise water prices for Pueblo businesses.


Part 5: From the Ground Up

Fluctuating market prices have made hitting profit thresholds a veritable science for cannabis growers.

Part 5

Part 6: What happened to the ‘Silicon Valley’ of Testing? 

With only one functioning cannabis testing facility, how can retail owners and growers be sure of their product?

Part 6

Part 7: Driving the Business

The white vans army fuels gets the cannabis from grow to the store.

Part 7

Part 8: Seeds to Retail Shelves

What happens in a Pueblo dispensary, anyway?

Part 8

Part 9: Not One Typical consumer

The white vans army fuels gets the cannabis from grow to the store.

Part 9

Part 10: High Hopes: Profit, Taxes and the Budweiser of Cannabis

Which companies have found success or failure in the new and tumultuous landscape of cannabis in Pueblo County?

Part 10