Hemp company sues Carson City after growing permit denied

CARSON CITY, Nev. — Tahoe Hemp LLC is suing Carson City for blocking it from growing hemp on city-owned open space land.

The suit, filed Jan. 15 in the First Judicial District Court in Carson City, alleges the city is refusing to submit a needed authorization with the Nevada Department of Agriculture to allow the business to grow hemp on open space property known as Buzzy's Ranch.

The property's former owner is allowed to use it for cattle grazing, ranching and agricultural purposes, depending on how that is defined, and leased 98 acres to Tahoe Hemp in June 2019.

Tahoe Hemp is seeking $15 million in damages and legal fees.

The city was served on Jan. 24 and has 45 days to respond.

The main issue for the city is the Nevada State Lands grant used to buy the property in 2010.

Jason Woodbury, district attorney, said based on discussions with State Lands, the city believes hemp growing would not be allowed under the terms of the grant.

“In order to secure the grant we had to give assurances how the land would be used,” Woodbury said. “If we violate those assurances, the state could demand the money be paid back or the state could take the property back.”

The land was purchased by the city for $3.7 million with the $2.8 million grant and the remainder in Quality of Life Initiative Open Space funds.

The grant stipulates that the property be used for “open space purposes,” as well as “ranching and purposes that are consistent with the protection or enhancement of wildlife habitat,” vegetation, cultural resources, riparian corridors, floodplains or wetlands.

The property was purchased from James Jarrard, trustee of two Jarrard family trusts. The purchase and sale agreement gives the seller the right to continue to use the property for “grazing livestock, ranching, and other agricultural purposes …”

Woodbury said at the time of the agreement hemp growing was not legal in the state so it was not an intended agricultural use. Hemp growing was legalized by the 2015 Nevada Legislature.

After leasing the property, Tahoe Hemp filed an application for a hemp growing with the Department of Agriculture and submitted authorization from the Jarrard Trust but was told by the department that it needed authorization from Carson City.

The city declined to provide it and in November sent Tahoe Hemp a cease and desist letter.

Tahoe Hemp's lawsuit claims hemp growing would not interfere with “hiking or observing wildlife.”

The city, in its response, may dispute that.

“Hemp has a powerful odor from what I've been told,” said Woodbury. “The property's purpose is for Carson City residents to enjoy.”

The Board of Supervisors will discuss hemp growing at its Feb. 20 meeting, according to Nancy Paulson, city manager. City municipal code doesn't currently deal with hemp cultivation, which could be addressed via zoning.

At its Jan. 16 meeting, before the city was served but the day after the lawsuit was filed in court, the board voted to authorize the district attorney to take legal action.