Breckenridge: Council eyes medical marijuana tax

New federal government rules probably won’t affect town plans

Would Breckenridge voters approve a sales tax on medical marijuana?

By Summit Voice

SUMMIT COUNTY — The Breckenridge Town Council will discuss a proposed ordinance that would levy a 5 percent sales tax on retail sales of medical marijuana starting Jan. 1, 2012. The tax could generate more than $40,000 annually for the town, but is subject to approval by voters under the TABOR amendment.

In a short memo council members, town attorney Tim Berry discussed the potential implications of a recent guidance memo from the U.S. Department of Justice, which appears to take aim at large-scale medical marijuana businesses.

Berry said he doesn’t think there’s been a wholesale shift in the federal government’s stance on state-regulated medical marijuana. But the last paragraph of the memo states that, “those who knowingly facilitate” businesses engaged in the cultivation, sale or distribution of medical marijuana may be subject to federal prosecution.

“Some may read that as threatening federal prosecution against local governments or employees engaged in licensing medical marijuana operations pursuant to a state medical marijuana program,” Berry wrote. “I can see how the memo can be read that way, but at this time it seems unlikely to me that the federal government would choose to use its resources to take criminal action against a local government or local government employee who is merely dealing with a medical marijuana business pursuant to a state law.

Special sales taxes on medical marijuana have easily won voter approval in a couple of different localities, for example Fruita, where 62 percent of the voters approved a 5 percent tax in the April 2010 election. The town of 11,000 doesn’t have any operating dispensaries, but there is one pending application and the town manager said the tax could generate up to $100,000 in revenue to help offset costs associated with regulating future dispensaries.

In Oakland, California 80 percent of the voters approved a 1.8 percent tax on medical marijuana, with estimated revenue of about $294,000 in 2010.

In a previous interview, Breckenridge town manager Tim Gagen said some of the research suggests that some medical marijuana sellers favor a tax because it gives the business more legitimacy. Similar discussions are occurring across the county Gagen said, explaining there might be an effort to coordinate a tax rate so that potential operators don’t pick their locations based on the lowest taxes.

However, a local caregiver, who asked not be identified by name, said in a previous interview that there should be no tax on medical marijuana.

“There is no tax on any other medicine in Colorado, even over the counter medicine often has no tax. To tax medical marijuana more that the typical 7.9 percent or 8.9 percent just plain hurts patients in the end,” the caregiver wrote in an e-mail. “The tax doesn’t really justify medical marijuana … it is already legal. The tax  justifies the tax … During a recession an increase of tax is a bad idea on anything,” the e-mail concluded.

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4 Responses

  1. This is MEDICINE. Why are you hurting people that need MMJ to increase their quality of life? If you want to tax marijuana, then vote for everyone to access dispensaries and tax the recreational users.

  2. They want the $$, but none of the risk. They are encouraging people to open businesses so they can collect fees and taxes. I think they should get busted if anyone they have sold a license gets busted.

  3. Why should there be an “extra” tax on MMJ? These are approved businesses, they go through a lengthy process to receive a license from the TOB, they’ve already jumped through many hoops, why are we trying to tax them more. I think there should be extra taxes and/or fees for T-shirt shops and real estate offices. I think another tax on MMJ retail sales is ridiculous.

  4. Ha, an extra “T-shirt tax!” I like it, Daniel, I think you should go to town council and suggest it, and voice your opinion on the MMJ tax, too. So why not tax every other type of medicine, from allergy pills to Viagra? That could raise a bunch of dough! They’re doing it just because they can. It will be challenged in court eventually.

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