City council members voted unanimously this week to grant Tumbleweed Dispensary a year-long waiver to a local law that requires retail marijuana establishments in Steamboat Springs to source 50% of their product from within the city.

Tumbleweed Dispensary, which has been owned and operated in Steamboat since August 2020, has not complied with the requirement since early October 2023 when the company’s local grow facility closed.

The city requested that Tumbleweed Dispensary submit a quarterly compliance report following the closure of the grow facility. 

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According to the city, the dispensary “submitted an incomplete report lacking significant details” later that month.

One year later, Tumbleweed submitted all missing quarterly reports from the remainder of 2023 and 2024. Those indicated the dispensary was not meeting the requirement to source 50% of product from Steamboat, according to the city.

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Failing to comply with the ordinance could result in a revocation of Tumbleweed’s 2025 retail license.

Addressing council members at their meeting Tuesday, City Attorney Dan Foote stated that all eight Tumbleweed facilities across Colorado are involved with a lawsuit in Denver District Court that deals with a dispute amongst the ownership group. 

Foote added that the Denver Court issued an order that prohibits anyone from taking legal action against any Tumbleweed location, which would require the city to get permission from the court to revoke Tumbleweed’s license. 

“Regardless of what you do tonight, probably nothing is going to happen to the license until we can get an answer from the court, which will take around three months,” said Foote.

Sherri Marzario, co-owner of Tumbleweed, stated that no renewing the license would mean the Steamboat location would shut down, causing the company as a whole to lose its healthcare plan for all employees across its seven other locations in Colorado. 

According to Rob Lynch, who oversees the company’s human resources and payroll, Tumbleweed employs over 65 people across the state.

“We believe it is our responsibility to take care of our team and provide them with the piece of mind of healthcare,” Sherri Marzario said. “Non-renewal would leave these employees without jobs or healthcare, placing them and their families in an extremely difficult position.”

The city’s local grow ordinance was established in 2013 with a requirement to source 70% of marijuana products locally, however, that limit was later lowered to 50%.

This ordinance was enacted to encourage vertical integration to help the local economy thrive and create more local jobs, according to the city. Foote noted that Steamboat is the only city in Colorado that requires this type of compliance. However, the city did not begin enforcing compliance until 2023.

Madison Marzario, who oversees Tumbleweed’s operations, said the company approached Billo Premium Cannabis and Golden Leaf Dispensary, which are both located in Steamboat, about buying cannabis products from their local grow operations to comply with the ordinance, but both companies were unable to support Tumbleweed’s operations.

Tumbleweed has also allegedly explored grow facility options within the city but has not yet found a solution to sourcing local cultivation, according Marzario.

However, Charlie Peddie, Billo’s chief operations manager, stated that Tumbleweed never approached them about the matter but they would be willing to help supply product on a short-term basis.

“I think it would be appropriate and reasonable to work with Tumbleweed on a temporary waiver to keep them in the game,” said John Peddie, co-owner of Billo. “They’re a good steward of the industry in Steamboat, but I think they need to grow.”

Council members echoed the sentiment, stating they were open to granting Tumbleweed a waiver to allow the company time to comply with the ordinance. However, the city ordinance expires in early 2027, which some council members said defeats the point of the waiver if the company were to fail to comply within the year.

Other council members voiced concerns about the waiver’s fairness, considering other local grow facilities have consistently complied with the ordinance without issue. 

Council member Steve Muntean added that he is against the local, 50% growing requirement as a whole and he supported granting a waiver for that reason.

“This is a free capitalist society and a free market,” said Muntean. “Why are we trying to protect this one industry?”

Council members also considered expanded the ordinance to extend to all of Routt County, which would give dispensaries more options for local sourcing, but they agreed that undertaking a revision of the would be challenging due to a full slate of priorities already set for this year.

Ultimately, council voted in favor of granting Tumbleweed a waiver, allowing the company one year to find a solution to local sourcing. If the company is found to be not in compliance with the ordinance after one year, it may apply for additional waiver.