Mon August 26, 2013
Ahead Of Vote, Colorado Marijuana Taxes A Source Of Debate
This fall voters across Colorado will decide how recreational marijuana should be taxed.
Taxing recreational marijuana was a key part of the campaign to legalize the drug. And when voters legalized it, they also agreed to a 15 percent excise tax to be passed at a later date.
“The big message is we’re going to be fulfilling our commitment to the 55 percent of Colorado voters who voted in favor of amendment 64 last year,” said Joe Mgyesy, spokesman for the yes on initiative AA campaign.
The owners of pot businesses also want to show regulators they’re serious and want to be taxed just like everyone else. Last legislative session state lawmakers tacked on a 10 percent sales tax on top of the excise tax
“We think it’s a fair way to go. It’s a pretty reasonable rate and will help ensure there’s going to be appropriate funding to get the program to work in the coming years,” said Michael Elliot, with the Medical Marijuana Industry Group.
The sales tax would only apply to recreational marijuana and not medical marijuana sales. While the initiative has broad support, there are some who worry it goes too far. Jessica LeRoux, as the owner of Twirling Hippie Confections in Denver, doesn’t back the sales tax.
She hopes people continue using medical marijuana so they can avoid paying it.
“Screw the state, they’ve done a horrible job in administering the system,” said LeRoux. “Why should we pay them a penny more in taxes, all they’ve done is be corrupt.”
LeRoux is referring to a 2013 audit that blasted state regulators for miss-managing money and failing to track and oversee medical marijuana operations.
“I think a lot of issues that they’ve had with enforcement has been poor allocation of the funds they received,” said Teri Robnett with the Cannabis Patients Action Network. “I’m questioning, I’m not sure how smart it is to hand them a whole bunch more money without clear oversight on how that money is going to be spent and what it’s going to be used for.”
Robnett also doesn’t like the precedent the tax would set. As written, the measure would give lawmakers the ability to raise the sales tax rate up to 15 percent.
“What we say is it’s 10 percent and trust us that we’re not going to raise it,” said Robnett. “I think they’ve now shown the rest of the state how to get around TABOR because they didn’t want to have to go back to voters.”
For others the tax issue is another way of gouging the customer.
Attorney Rachel Gilette heads Colorado Norml, a group that represents consumers. She notes that some local communities such as Denver and Boulder are putting their own special sales taxes on the ballot. She says it’s too much.
“These other special local sales taxes may make the cost to the consumer just too high, which defeats the purpose of regulation, because it ultimately supports the black market or underground market,” said Gilette.
The state says it’s trying to learn from past mistakes and believes it will have a robust regulatory structure in place. Communities across Colorado are counting on that.
“One of the critical components of this whole statewide system working is a marijuana enforcement division that is adequately staffed to handle the statewide enforcement of a legalized drug,” said Kevin Bommer, Deputy Director of the Colorado Municipal League. “Because individual municipalities and counties can’t be equipped to track seed to sale and things like that. The state needs to be well funded.”
Despite various concerns, backers of the tax campaign expect the measure to easily pass. The statewide taxes are just one step, as the Jan. 1 date for the legal sale of recreational marijuana gets closer.