Colorado marijuana advocates clash over tax measure

source: Denver Post
By John Ingold

When supporters and opponents of a statewide marijuana sales tax measure on the ballot this November look across the battle lines, they will notice a lot of familiar faces.

Many of them worked together last year to pass marijuana legalization.

Just 10 months removed from that historic campaign — in which Colorado voters approved a first-of-its kind recreational marijuana industry — cannabis advocates have fallen out over how much the industry should be taxed.

Two of the main advocates behind the legalization campaign, attorneys Brian Vicente and Christian Sederberg, are now leading the pro-tax campaign. They're joined by marijuana-industry trade groups but also by opponents of legalization — such as Colorado Attorney General John Suthers and the Denver Chamber of Commerce.

On the other side of the fight stands attorney Rob Corry, who helped write the marijuana-legalization measure. Along with him is the local branch of NORML, the National Organization for the Reform of Marijuana Laws.

"The marijuana community is not a monolith," Corry said. "... We do have family disagreements within our own movement."

The tax fight is the latest cannabis community quarrel. Factions of marijuana activists have previously disagreed over medical-marijuana regulations and even over whether to support the marijuana-legalization measure. The annual 4/20 marijuana smoke-out is a constant source of tension.

The debates often focus on whether it is better to strive for political approval while accepting some continued restrictions on marijuana or to seek more freedoms while possibly tempting a backlash. And image, as much as policy, is frequently at issue.

For instance, when Corry kicked off the anti-tax campaign by holding a free joint giveaway in Civic Center Park — a stunt he said illustrated that there are many, less-regulated ways marijuana users can get pot legally in Colorado besides in stores — tax supporters quickly decried the no campaign's "cavalier approach."

This particular disagreement focuses on what economic conditions will best help legal marijuana stores thrive.

The ballot measure proposes a 15 percent excise tax and an initial 10 percent sales tax on recreational marijuana. Money from the excise tax would go to school construction — as specified in last year's legalization initiative — but money from the sales tax would be used to regulate the stores.
Voters in Denver are likely to be asked to approve a separate and additional tax on recreational marijuana sales in their city.

Supporters of the taxes — who are organized around a campaign group called the Committee for Responsible Regulation — say the money is needed to make sure the state's new rules for the stores are adequately enforced. Their concern took on an added urgency, they say, when the federal government announced it would allow marijuana legalization in Colorado to proceed so long as the stores play by the rules and the state fully funds its enforcement of those rules.
"We really think we need to keep the promise to Colorado voters," Vicente said at a kickoff for the campaign last month.

But opponents of the tax say the rates are too high and will cause marijuana users to avoid shopping at the stores and look elsewhere, like the black market, for supply. If that happens, the tax opponents say, Colorado's regulated marijuana market will fail.

"It's not that we oppose taxation and regulation in general, it's that we think the rates here are excessive," said Sean McAllister, a board member for Colorado NORML.


Colorado's nonpartisan voter-information guide estimates the proposed statewide marijuana taxes will add about $40 to the price of an ounce of marijuana — a roughly 20 percent tax rate on the retail price. The taxes are estimated to bring in $67 million per year initially, out of which $27.5 million will go to school construction and $6 million will go to local governments. That leaves $33.5 million for the state to regulate marijuana stores and fund marijuana education and treatment programs.
Stores will also have to pay licensing and application fees.

Tax opponents say the projected revenue is way more than is needed. The fiscal note for the bill that created the state's recreational marijuana regulatory structure estimated the regulations would cost about $1 million more than the $6 million the Marijuana Enforcement Division was already budgeted for.

"You could get that done with half the tax rate," McAllister said.

But supporters of the taxes say much is unknown about the rippling costs of marijuana legalization. A survey earlier this year from a Colorado State University research group questioned whether marijuana taxes would be able to pay for all the associated costs of legalization. Officials point to a scathing audit this year that they say shows the danger of underfunding marijuana regulation.
And lawmakers warn that any extra money needed to pay the collateral costs of legalization will have to come out of the state's general fund.

"This is about making sure marijuana pays its own way," said Rep. Jonathan Singer, D-Longmont.