Local dispensary believes ballot measures are misleading voters
A local dispensary is concerned two measures on this November’s ballot taxing retail marijuana are misleading voters.
Grand County residents will decide two questions on increasing sales and excise taxes on retail marijuana this November. However, Igadi, a Tabernash dispensary and the county’s largest marijuana retailer, disputes the revenue numbers cited in the ballot questions, which they say are inflated.
One of the ballot questions, 1B, asks residents to decide whether or not they support increasing the excise tax, or a tax on the manufacturing of marijuana products, by 5 percent to raise $155,000 for the county’s general fund and the road and bridge funds.
The second ballot question, 1A, asks residents if they support increasing the retail marijuana sales tax by 5 percent to raise over $300,000 for the general and road and bridge funds.
Support Local Journalism
According to the county, the number cited in the sales tax ballot language was based on state data regarding marijuana sales and the excise tax number is based on the state’s value of a pound of marijuana.
David Michel, general counsel for Igadi, said these numbers don’t reflect the reality of the business.
“The odds that we are going to see the demand in sales rise above the current demand in sales in the county is unlikely,” Michel said.
Michel said a 5 percent sales tax increase would mean that Igadi would pay around $109,000 a year to the county.
The other dispensaries affected by the tax increase, Bonfire in Tabernash and Serene Wellness near Winter Park, are smaller than Igadi and, therefore Michel is skeptical the $310,000 cited in the ballot measure is achievable.
County Commissioner Rich Cimino said the sales tax was calculated by the director of finance for the county based on previous sales tax collections in unincorporated Grand County recorded by the state.
“He did the best he could to try to ascertain what the current marijuana business is just in unincorporated Grand County,” Cimino said. “It is an estimate, it is, so it could be higher or lower.”
According to Robert Franek, assistant county attorney, there are no legal implications for citing a too high or low number on the ballot.
In September, the most recent month the state has data on retail marijuana taxes, Grand County collected $6,180, which is 1.5 percent of the sales tax collected in the county by the state.
The state charges a specific 15 percent sales tax for marijuana on top of the state’s 2.9 percent sales tax and the county’s 1.3 percent sales tax.
Landon Looney, manager of Bonfire, said the sales tax increase would impact business because the store would have to raise prices.
“Raising our sales tax is going to raise prices on everything as well, so I mean it’s going to have an impact and we’re going to have some customers a little aggressive towards us because they’re thinking we’re raising the taxes on them,” Looney said.
Michel said the sales tax would hurt Igadi’s competitive advantage in the market and it would discourage them from expanding business in the county.
“For us, the excise tax would discourage us from potentially increasing our production here,” Michel said. “The county is trying to make our business harder and make our marijuana more expensive for us to produce, which gives us a competitive disadvantage.”
This is equally true for the excise tax, if not more so, Michel said. Since Igadi is currently the sole cultivator in the county, the excise tax would only impact them and Michel is sure they would not be able to raise the estimated $155,000.
“We calculated based on the most current (state average market rate) that it would be about $34,272 is all the county could produce on that,” Michel said.
The state currently charges a 15 percent excise tax and does not remit a percentage to the county, like they do with the sales tax. Local municipalities are allowed to charge up to 5 percent in excise tax.
Sara Rosene, clerk and recorder for the county, said the number cited in the excise tax ballot is based on the state’s average market rate for a pound of marijuana, which is $759.
However, the state’s market value of a pound of marijuana has been declining since it was legalized in 2014, Michel notes. He also said he wasn’t contacted for information that could have helped provide more accurate numbers.
Unfortunately, Rosene said the ballots have already been mailed out, so there is no changing the language as written.
“Our ballots are printed and we’ve already issued ballots for our overseas and military voters,” she explained.
Michel said he plans to coordinate with other dispensaries to inform their customers that the information on the ballots is incorrect. He said they are also planning on putting out pamphlets.
“There is no way to know whether the voted on the appropriate facts or they voted on the misrepresentations perpetrated by the county,” Michel said. “We will let voters decide and we will, of course, comply with whatever the voters decide.”
Support Local Journalism
Readers around Grand County make the Sky-Hi News' work possible. Your financial contribution supports our efforts to deliver quality, locally relevant journalism.
Now more than ever, your support is critical to help us keep our community informed about the evolving coronavirus pandemic and the impact it is having locally. Every contribution, however large or small, will make a difference.
Each donation will be used exclusively for the development and creation of increased news coverage.
Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.
User Legend: Moderator Trusted User