With legal haze cleared, High Valley Farms sells for $8.35 million
High Valley Farms, one of the first legal and commercial marijuana cultivation facilities to open in the Roaring Fork Valley, has changed ownership for $8.35 million, but not before a judge and the parties involved had to sort out an array of legal issues.
Earlier this month a company called Silverpeak Real Estate closed on the purchase of a 19,925-square-foot warehouse, 5,075-square-foot office building and a 2,536-square-foot house, all part of the High Valley Farms enterprise at 24480 and 24530 Highway 82, according to filings made Tuesday in the Pitkin County Clerk & Recorder’s office. The two-parcel, 4.7-acre property flanks the Roaring Fork Club and is located on the outskirts of Basalt.
News of the ownership change began to circulate last year, when Pitkin County commissioners approved the transfer of High Valley Farms’ grow and retail licenses to a company called Silverpeak Real Estate.
Businessmen James Young of Aspen and Chapman Ducote of Aspen and Miami — both principals with Silverpeak Real Estate — told commissioners in November their pending acquisition of High Valley Farms would include the Silverpeak dispensary business in Aspen. They said the shop would keep the Silverpeak name — hence their new company’s name — and they would expand the brand in Colorado by acquiring more cannabis stores.
The seller, cannabis entrepreneur Jordan Lewis, had operated High Valley Farms and the Silverpeak dispensary in Aspen. Silverpeak and the now-defunct Stash were the first Aspen stores to sell recreational marijuana in March 2014.
Yet the transaction was hardly a turnkey deal. Attorneys for the new ownership, as well as Young and Ducote, could not be reached for comment about the High Valley Farms deal this week.
Legal documents, however, show the transaction was enabled by multiple parties reaching an agreement through what’s called a “quiet title” action, a court measure taken to clarify ownership of a property.
That’s what both the buyer and seller did Jan. 3, when they jointly filed a quiet-title complaint in Pitkin County District Court. Their reason: The transaction was being held up by four judgments against High Valley Farms affiliates under Jordan Lewis’s control.
Three of those judgments, issued in July 2018 by Pitkin County District Judge Chris Seldin, were in the amounts of $1.6 million, $2.1 million and $1.1 million against multiple limited liability corporations associated with Lewis and High Valley Farms.
Owed the money was New York-based agriculture investment firm B. Zaitz & Sons, which along with two associated parties sued Lewis and High Valley Farm affiliates in September 2018. The suit accused Lewis of fraudulently transferring nearly $5 million from three loans B. Zaitz & Sons made to his companies from 2013 to 2015 — which were intended to support his Silverpeak and High Valley Farms operations — to a marijuana venture he started in Uruguay. Lewis denied the claims at the time through his Aspen attorney, Darryl Cramer, who could not be reached Friday.
Even so, because Seldin ruled in the plaintiffs’ favor with the combined $4.8 million judgments, this week’s High Valley Farms sale could not go through without B. Zaitz & Sons releasing the deed of trusts attached to the property. That’s what they agreed to do, although the judgments were partially paid down in the amount of $2.063 million, rather than in full, at the closing of the sale.
“Although the pay down will be partial, leaving a deficiency to be collected through other legal means that have nothing to do with the property, the Zaitz Parties have concluded the pay down is sufficient and, in exchange, to effectuate the release of the Zaitz (deeds of trusts),” the title action said.
B. Zaitz & Sons also did not respond to a message seeking comment.
Another judgment was related to a $3 million line of credit given to High Valley Farms from Fortunate Sons LLC, managed by Aspen resident Jonathan Lewis.
Fortunate Sons originally provided a $1 million line of credit to High Valley Family in October 2014, extending that $3 million, money that was borrowed against the property, according to court records. Upon this week’s closing, Fortunate Sons received $3.29 million, according to court documents.
“Proceeds of the Closing will be sufficient to provide for a full pay-off of the indebtedness owed by (High Valley Farms) to Fortunate,” the quiet-title complaint said.
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In the aftermath of the Grizzly Creek Fire in and around Glenwood Canyon, Eric Lovgren has been “swamped” with calls and emails, primarily from people in the Eagle and Gypsum areas where residents could see flames from the Grizzly Creek Fire as it grew toward the Coffee Pot Road.