Economic Study: Colorado Springs missing out on $20 million per year in tax revenue by banning licensed retail marijuana establishments
A new economic study concludes that Colorado Springs would generate more than 20 million dollars a year in new tax revenue if it allowed licensed adult-use (recreational) marijuana 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.
According to the author of the economic study, Economics Professor Jack Strauss, the Miller Chair of Applied Economics at the University of Denver, “Colorado Springs would solve many of its economic woes if it allowed licensed adult-use marijuana establishments. If Colorado Springs chooses to allow licensed retail marijuana establishments, next year it would generate tax revenue and licensing fees of approximately $25.4 million. This would increase the total City budget by approximately 10%.”
The study was commissioned by Citizens for Safer Neighborhoods, 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.
According to Michael Elliott, spokesperson for Citizens for Safer Neighborhoods, “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.”
According to a recent publication from VS Strategies, Colorado recently exceeded $500 million in cannabis revenue since legalization.
- “In June 2017, Pueblo County used $420,000 in local cannabis tax revenue to provide college scholarships to 210 local students.
- The Aurora City Council allocated $1.5 million in cannabis tax revenue to fight homelessness. Funds are also being used to improve roads and help pay for a new recreation center.
- The City of Edgewater has used cannabis tax revenue — which accounted for 20 percent of its budget in 2016 — to repave all of its streets, fix miles of sidewalks, and help fund the construction of a new city complex.”
Michael Elliott will be available for interviews on July 27th, between 2:30 and 4 PM, outside the Colorado Springs City Hall, 107 N. Nevada Ave. To schedule an interview, please call Jane Ard-Smith at 719-351-2584.
The executive summary from the study is below:
The Economic Impact of Allowing Retail Marijuana Establishments in Colorado Springs
2017 Tax Revenue: Would have generated approximately $13.0 million in tax revenue in 2017:
- 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 in tax revenue in 2018:
- 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: Will create 1,320 to 1,762 jobs in 2018
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 $7500
$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