Mathew Klickstein | Yellow Scene Magazine | January 6, 2010
The taxing question of medical marijuana in Colorado
I well remember the citywide excitement the first time “cannabis clubs” suddenly opened up throughout Hollywood where I was eking out a living as a lowly screenwriter and journalist. Then, just as suddenly, the marijuana dispensaries vanished. Though California’s populace roundly supported the sale of medical marijuana to needy patients, the trouble—in the eyes of the federal government—ran the gamut from organized crime to allegations that nonprofit dispensaries were secretly earning money for themselves. It became a matter of the 10th Amendment to the US Constitution (“Leave everything else to the states, please”) versus the 14th (“Sorry, folks, you’re American citizens first and foremost, and that means we’re in charge”).
Colorado voters approved medical marijuana in 2000, but a storm of municipal concern and debate started only recently—more specifically, after President Obama announced he would stop raids on medical marijuana businesses—when pot shops sprouted up in numerous Colorado cities, including Boulder, Longmont and Fort Collins. Numerous cities have responded with moratoriums, giving themselves time to regulate dispensaries. While cities are still struggling (and will continue to struggle) with how to regulate the onslaught of medical marijuana dispensaries, it’s expected to be an issue at the state level as well.
When questioned about any tasty stories for Yellow Scene’s legislative preview, state Rep. Paul Weissmann of Louisville eschewed such lofty issues as the death penalty for the kaleidoscopic marijuana mess, which involves everything from zoning ordinances for dispensary locations to care providers now having to offer “additional services” such as yoga or lawn-mowing.
“I will be very involved in this,” Weissmann said, “looking out for the people who are using medical marijuana and making sure that the legal supply is not cut off.”
As a state representative since 1992, Weissmann has been fighting the fugacious War on Drugs with fervor and has personally followed Colorado’s marijuana policy for more than 30 years now, ever since his bygone days in college when—“like most people my age”—he dabbled in a bit of pot himself.
“Although, it’s been years,” he makes sure to note, “and I’ve lived to tell about it!” “I’ve never thought that it made much sense to spend millions…to ban a substance that, while not healthy, is not any worse than legal products like booze or tobacco. …It would make more sense to legalize and regulate it.”
Opining that the majority of Boulder County denizens would indeed support a proposal to legalize, regulate and tax marijuana for recreational use, Weissmann may in fact be ahead of his time.
Proving how nebulous an issue this has become, at the time of our discussion, Weissmann lamented that medical marijuana dispensaries only pay income taxes and license fees. A mere few days after our confab, Colorado Gov. Bill Ritter stated that he plans on directing dispensaries to start paying sales tax as well, now that Attorney General John Suthers has made it clear that medical marijuana is “personal property” and should be so taxed. Unlike tax-exempt prescription drugs and more like, well, alcohol and cigarettes.
Denver is already on its way to imposing such taxes, and the rest of Colorado’s dispensaries will have to just hold their breath in rapt anticipation. Perhaps this step will finally legitimize what has long been considered a “black-market” community, Courtney Tanning of the Colorado Wellness Association recently told the Denver Post. “I think the (medical marijuana) community is willing…to pay dues to be taken seriously,” she said.
Not to mention all the good levying sales tax on medical marijuana could do for Colorado’s $320 million deficit. The General Assembly has already transferred $35 million from tobacco moneys to the General Fund that will assist in the budget gap, and after state lawmakers lifted the archaically puritanical ban on Sunday liquor sales back in 2008, excise tax went up 7 percent. According to the US News and World Report, similar surges in tax money hit the other 12 states across the country who did the same, earning together more than $200 million in annual revenue.
Around $15 million—what Colorado lawmakers are estimating we’ll take in once legitimized medical marijuana is taxed appropriately—may seem like a drop in the bucket, but at least it’s a start. Better than having to eliminate more than the 270 full-time state employees Gov. Ritter is eighty-sixing thanks to 2009 state budget cuts. Better also than having to implement further wage and hiring freezes statewide, or having to extend the already enacted year-long suspension on senior citizen property tax exemption.
Maybe your neighbors should be slightly more flexible the next time they notice a pungent smell wafting in the air. As long as you’re paying sales tax on it, of course.