Marijuana: Boulder agrees to 5 percent excise tax on marijuana producers and manufacturers

Categories: Marijuana
The Boulder City Council approved a 5 percent municipal excise tax on cannabis for growers and manufacturers last night and decided against enacting a separate sales tax -- for now, at least. The city did leave open the option of a 5 percent sales tax if other cities -- namely Denver -- introduce a similar sales tax.

As several councilmembers pointed out during the discussion, they don't want to be too far off from every other city that allows cannabis lest Boulder be seen as either too friendly or too harsh on cannabis businesses. Council also approved allowing the excise tax to be increased to 10 percent at a later date.

Council heard from several pro-cannabis speakers who opposed the high tax before the vote, including lobbyist and cannabis activist Shawn Coleman, who said that asking voters to approve anything higher than 5 percent simply to cover costs would not be successful. The initial Boulder tax plan called for as much as 50 percent of tax money collected going to future treatment programs.

Coleman also urged council to abandon the sales tax proposal, arguing that raising the prices too high for the consumer will send people back to illegal cannabis sales.

"The current proposal will result in only medical marijuana patients to access the safe, regulated, tested, labeled system that the city has put into place," Coleman said. "Marijuana use won't change at all, because people will still be getting it from their friends' living rooms, and you'll have no new revenues for the city."

An excise tax on producers will also help evenly distribute the tax burden, he suggested. Theoretically, grow facilities for the recreational industry won't conduct retail sales; establishing an excise tax on sales from growers would really be the only way to collect any additional tax revenue from the stores. Basically, it would balance things between growers and retailers who would be coughing up money in the form of Boulder's general sales tax, anyway.

Jeff Gard, a Boulder attorney representing Options Medical Center, pointed out that the city is already set to receive money from cannabis sales through the state, as half of the state application fees go back to the licensing municipality, as does 15 percent of the gross sales tax collected.

"The taxes have to have a purpose and justification," Gard told council. "We don't tax because we can, we tax because we should."

Boulder cannabis activist Terri Robnett put it more bluntly: The high tax rate proposals make the city government look like a pack of hungry wolves surrounding a fresh kill.
"It's getting to the point from the voters' perspective that it just smacks of greed," Robnett told council. "Marijuana is being charged with rescuing every state and local government from the downturn, and that's just wrong."

Council's vote Tuesday night was the first step in getting the tax proposal on the Boulder ballot this November. The next step calls for council to pass a special ballot measure at its meeting on August 5.

View the entire debate from last night in the video below:

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More from our marijuana news archives: "Survey shows parents want strict regulations"; "Medical marijuana: Active red cards continue to decrease"

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RobertChase topcommenter

There is no justification whatsoever for any of these taxes; the State shoud save money by not fruitlessly trying to suppress the use of cannabis and persecuting those who choose to use it.  We the People just authorized the General Assembly to impose up to a 15% excise tax on cannabis, but in its monumental contempt for the voters, it referred an initiative improperly combining the excise tax with a 10% sales tax surcharge.  Not to be outdone, Boulder and Denver are falling over themselves to add even more exorbitant taxes -- just on cannabis.  The effective retail tax on cannabis may be as high as 40% or even higher.  While such taxes are unlikely to kill general retail sales to adults, they will certainly undercut the intent of Amendment 64 by continuing to fuel the black market.  Rather than come up with a plan to employ the vast underclass which now subsists by selling cannabis on the street, Colorado's ruling class is determined both to keep the price of cannabis sold in dispensaries so high that the licit trade remain a largely white, middle-to-upper-income phenomenon, and to keep making felons of its citizens for exactly the same conduct it will license in dispensaries next January -- the General Assembly ignored the People's determination that cannabis "should be regulated in a manner similar to alcohol" and just reinstituted all the galaxy of felonies for cannabis.

There are two things we can do (speaking to all the politically aware, progressive readers of WW, who somehow never manage to pipe up in favor of ending Prohibition):  (1) campaign against all taxes that the electorate did not approve last November (i.e. all the tax referenda -- the GA needs to ask us for the excise tax, by itself, again next year), and (2) press our representatives to rescind all felonies for cannabis, in accordance with Article XVIII, Section 16 of our Constitution and Colorado's Liquor Code (C.R.S. Title 12, Article 47).  The situation is far from hopeless; there are many libertarians in Colorado who will agree with our objections to inappropriate taxes not contemplated in the Amendment.  Our greatest impediment is those who use cannabis, but are so ignorant of and disengaged from the political process that they cannot conceive of the political solutions staring us in the face.  I invite anyone who wants to join other like-minded people in ending Prohibition in Colorado to contact me; together, we can make a difference.

Robert Chase

Colorado Coalition for Patients and Caregivers

DonkeyHotay topcommenter

@RobertChase ... the dilettante egomaniac trots out his phony self-aggrandizing "coalition" once again.

"I am not even a registered patient" -- Robert Chase


DonkeyHotay topcommenter

@RobertChase = fabricates phony "coalitions" so he can pretend to be self-appointed leader.

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