Originally Posted On Colorado Springs Independent by Nat Stein
There’s a new group in town that’s serious about bringing retail pot shops to Colorado Springs. Citizens for Safer Neighborhoods describes itself as “a group of dedicated Colorado Springs business professionals committed to enhancing safety and the economic vitality of Colorado Springs through reasonable regulation of licensed medical and adult use marijuana establishments.”
On Thursday, the group announced the findings of a commissioned study by economics professor Jack Strauss, the Miller Chair of Applied Economics at the University of Denver. Its conclusion? Colorado Springs would generate more than $20 million a year in new tax revenue if the city started licensing adult-use establishments. “While Colorado Springs allows only licensed medical marijuana establishments, neighboring communities that allow licensed adult use establishments have reaped the tax benefits, including Manitou Springs, Pueblo, Denver, and Aurora,” a press release announcing the findings stated.
Here are some other findings from the study, titled “The Economic Impact of Allowing Retail Marijuana Establishments in Colorado Springs.”
2017 Tax Revenue: Would have generated approximately $13 million:
- $4.6 million from Colorado Springs’ local 3.12% sales tax
- $3.3 million from the 15% shareback of the 15% special state sales tax
- $5.1 million from additional economic activity
2018 Tax Revenue: Will generate approximately $17 million:
- $5.5 million from Colorado Springs’ local 3.12% sales tax
- $5.4 million from the 15% shareback of the 15% special state sales tax
- $6.1 million from additional economic activity
Additional 3.5% Sales Tax: If Colorado Springs passed an additional local marijuana sales tax of 3.5% (Denver’s rate), it would generate the following:
- 5.1 million in additional tax revenue in 2017
- 6.1 million in additional tax revenue in 2018
Jobs: [Would] create 1,320 to 1,762 jobs in 2018
[New] Licensing Fees: $2.3 million in additional licensing fees could be collected by Colorado Springs if all 356 licensed medical marijuana establishments were to pay a licensing fee of $7,500
$18.1 million would have been generated in 2017 between the local sales tax, the 15% shareback, the additional economic activity, an additional 3.5% local marijuana sales tax, and licensing fees
$25.4 million would be generated in 2018 between the local sales tax, the 15% shareback, the additional economic activity, an additional 3.5% local marijuana sales tax, and licensing fees
The release of this study and the unveiling of this new group come on the heels of a major indictment against 13 locals who allegedly engaged in the retail sale of marijuana without proper licensure (that is not currently available here). At a press conference announcing the indictment, District Attorney Dan May railed against recreational marijuana, saying it’s “a gateway drug to homicide,” responsible for car crashes, attracting more homeless people, and it’s getting into the hands of youth. At different points in his speech to media, May both condemned the defendants for skirting Colorado’s legal industry and cautioned against allowing that legal industry to be established in Colorado Springs.
But Citizens for Safer Neighborhoods has a different take on the public safety effects. Spokesperson Mike Elliott, a Denver-based cannabis attorney, said in the press release that “Banning licensed adult-use marijuana businesses only benefits the black market and organized criminal enterprises. Allowing licensed adult-use businesses would force sales to occur in licensed, regulated, and taxed facilities that are secure, accountable, check IDs, and ensure consumer safety through labeling, child-resistant packaging, and testing. Let’s take the money away from criminals in the black market, and invest the new tax revenue in the police, parks, potholes, and stormwater.”
As reported by the Gazette, City Council members are open to letting voters decide the retail marijuana question for themselves. A different Council opted out in 2013, even though Springs voters approved Amendment 64, the state constitutional amendment that legalized adult-use marijuana in 2012. Now, there’s renewed interest in revisiting the question, but Councilors haven’t made any definitive moves to make it happen.
Citizens for Safer Neighborhoods wants to see retail pot in Colorado Springs sooner rather than later. According to community activist Jane Ard-Smith, who’s a consultant for the group, there’s no one way to get it done: Council could refer the question to either this November’s ballot or 2018’s; Council could just go ahead and adopt a licensure scheme without putting it to the voters; or the group could pursue a citizen-initiated ballot measure. In all likelihood, she says, it may be too late to start a successful petition drive ahead of this November’s election.
“We don’t want to wait on the tax revenue or let the black market keep going,” Ard-Smith told the Indy.
And just to put “waiting” into perspective, the study’s tax revenue projection for 2018 is $25.4 million — a figure that includes licensing fees, a local special sales tax (like those collected in other retail-friendly cities) and “additional economic activity.” That would more than cover the $17 to $20 million in annual stormwater obligations the city will have to pull from the general fund if voters don’t approve the proposed stormwater fees this November. Recent polling indicates that support for that question sits at just 51 percent.