Colorado Cannabis Business Park Entangled in Legal Battle Over Unpaid Electricity Bills

NEW YORK — A legal tussle over a six-figure electricity bill has emerged between the owners of Area 420, a Colorado cannabis business park, and one of its tenants, as reported by NBC. The dispute, centered on an unsettled debt exceeding $100,000, has led Potch LLC, the parent company of Area 420, to pursue foreclosure on property held by tenant Terry Ferrari.

Area 420 houses approximately 70 cannabis-related businesses and claims that Ferrari has accumulated over $100,000 in unpaid electricity bills, plus accruing interest. The conflict arose shortly after Ferrari acquired land in the park in 2021, with both parties in disagreement over the responsibility for the electrical bills and the installation of commercial-level indoor lighting and electrical systems.

The original sale contract left ambiguity regarding this responsibility, with Ferrari believing Area 420 was to handle the installation, while the business park’s owners assert that Ferrari was aware of his obligation to procure power services from San Luis Valley Rural Electric Cooperative independently.

In response to the impasse, Ferrari ceased payments to Area 420. He conveyed to NBC his exasperation over the situation, stating that after investing $2 million in property construction and renovations, the additional cost for electrical upgrades might impede his operations.

Ferrari, who has poured his life savings into the venture, expressed his plight: “I’ve been looking at a big building that I can’t use, and I’m in a big heap of trouble because they promised me power and couldn’t give it to me.”

On the other side, Mike Biggio, co-owner of Area 420, countered the allegations, emphasizing that the electrical arrangements are the tenants’ responsibility. “It’s up to each individual buyer to determine how much power they need, and then they have to pay for it. This is a power company issue, not a developer issue,” Biggio stated, noting his efforts to resolve the situation with Ferrari.

The legal confrontation marks a significant strain in the relationship between cannabis entrepreneurs and property developers in the burgeoning Colorado market, underlining the critical need for clear contractual agreements in the real estate dealings within the industry.