YES !!! I have literally used coffee grounds for ground cover since the mid '50s on the Lionel pike. Today I use it for texture in various parts of the HO layout.
As I did as a kid… put the coffee grounds on a foil covered cookie sheet, spread them out, and bake at say 250 for a 1/2 hour or so. This will dry them out, and they will last “forever”. Well, maybe not forever but my current supply was put together in the late 1970s. Yikes, that’s almost 40 years!
If you try to save them wet, you will get a moldy mess. You could hold them for a day (so as to have two days worth to dry), but I wouldn’t hold them wet any longer.
Earlier in this thread Mike mentioned tea leaves. I’m not sure if coffee will have the same effect, but I’ve used tea for weathering. I stewed some tea then evapourated it down to concentrate it, then added some alcohol. This produced a dark rust coloured wash that I used in my first weathering attempts. Worked reasonably well. The natural tannins in the tea could be used for other tinting and weathering jobs.
There is an article in the September 2015, NMRA magazine titled, “I can’t believe it’s not a real desert!”; pg. 14, by Phil Maasek, that describes how used coffee grounds are reproposed as ground cover.
In a nut shell; as described on pg. 14, ¶ 5:
Place the used coffee grounds in a 16-ounce plastic container; the author used a margarine tub.
Rinse the used coffee grounds until the water runs clear.
Fully drain.
Add enough chlorine bleach to cover the grounds.
Over the course of one-hour stir several times.
Drain thoroughly and allow to dry.
The author notes that after this first bleaching the color, “…will make one shade of ‘dessert sand’ with a yellowish hue. You will want to repeat this step with the grounds to get an even lighter shade of sand.”
The resulting ground cover in the accompanying photos to the article looks convincing.
He goes on to write, “Very important: dry these grounds thoroughly or mold will form when you store them in a closed container.” He does not specify a preferred drying method.
I imagine that this material could also be dyed to suite many specific ground cover needs.