Marijuana sales helping Crested Butte town budget

Dispensaries wonder if some of the tax money should be spent on youth education

Legalized marijuana has certainly helped Crested Butte’s coffers since retail pot sales were approved by state voters in 2012 and put into effect a year ago. Between local sales tax and a Colorado excise tax that funnels back some of the revenue to the municipality where the sales take place, more than $100,000 has been collected and put into the town’s general budget.

There are four active dispensaries selling retail weed in Crested Butte. All are on Belleview Avenue and all appear busy. The town took in $82,260 in sales tax from the dispensaries through November. The state has sent the town $21,410 so far this year from its excise tax imposed on legal pot sales.
From the town’s perspective, the 4 percent sales tax from a dispensary is treated like any other sales tax. Just as if the tax were collected from a restaurant or boutique, 75 percent of the tax dollars go to the Crested Butte general or capital fund. The other 25 percent is earmarked for the transportation fund, which is used primarily for the Mountain Express bus system.
“The town has not designated any marijuana sales tax to a specific item,” explained town finance director Lois Rozman.
”It is the same sales tax percentage as on any other retail sale in Crested Butte and we don’t designate sales tax from any segment to a particular project (i.e., a tax on alcohol doesn’t go to something specific, tax on art isn’t designated for specific projects, etc.). The council discussed putting an additional excise tax on retail marijuana and devoting that tax to specific projects/programs and/or costs incurred due to retail marijuana legalization but elected not to put forward an excise tax measure on this past ballot,” Rozman said.
Chuck Reynolds is a co-owner of the Soma dispensary that opened this year. He said it is a busy place with lots of locals and tourists visiting the store. “For our store, it’s been going very smoothly. The town has been great to deal with and has been very supportive,” he said. “Sales have far exceeded our expectations. It seems lots of people want to try the legal product. I’m amazed sometimes at the numbers and the types of people coming in the door.”
David Niccum runs the Acme Healing Center and said the first year has been great. “We have had many nice experiences with people shopping at our store. It is so great to talk with people from around the world and hear why they are shopping with us and why they changed their vacation plans because of what we are doing,” he said. ”I believe 2015 is going to be more successful”
Niccum said the more education and information that gets out about the industry, the better, and using some of the tax money collected by the state and the town could be used to disperse that information. “I do believe with this new law in place that education for children and adults is important,” he said. ”The town is receiving new revenue from a new industry and it might consider using some of those funds for education and awareness. People still have lots of questions and there is still a lot of misinformation being put out there, so every bit of correct information is great and the more public the better.”
Reynolds also said he thinks it would be appropriate for some of the money coming back to town from the state to be used to educate children about the issue.
Former Gunnison County Substance Abuse Prevention Project director Matthew Kuehlhorn now runs an organization called Thrive. Thrive is organized to facilitate state and local level conversations among government, community-based coalitions, such as GCSAPP, and the marijuana and alcohol industries. Three of the four Crested Butte dispensaries—Soma, Acme and the Crested Butte Wellness Center—are business-level members of Thrive.
“We are changing the way we think about and do drug prevention,” said Kuehlhorn. “There are new revenues being created by the new marijuana industry and many people don’t have faith that ‘drug prevention’ works. Many people instantly think of ‘Just Say No’ and the 1990’s ‘D.A.R.E.’ programs—not a toolbox of strategies that leverage community assets and reduce community liabilities, like our GCSAPP does now.”
Kuehlhorn said Thrive consults with community-based organizations such as GCSAPP at low costs because of membership fees. ”In our consultation, we can help improve community organizations’ results in supporting the individuals who live in and visit those places,” he said. “We can help communities acquire more funding for youth development programs. We can then help them utilize those funds efficiently and effectively.”
Thrive would not ask for any local municipal funding, said Kuehlhorn, because memberships support Thrive’s efforts and any additional funding would be sought at a state or national level. He would be willing to help GCSAPP apply for local funds in Crested Butte and Gunnison if that organization desired. “GCSAPP is one of the most evolved, well-formed, established, and focused drug prevention organizations in the country. I think it is appropriate for them to ask, and expect to receive, local funds from various sources. We will help them in any way possible.”
Rozman pointed out that the town of Crested Butte has a community grant program that allows interested parties to apply for money for specific purposes. The council hears requests twice a year. “The town has a community grants program and entities wanting money for specific education or other kids’ programs could have applied for funding, but did not and have not in the past few years,” said Rozman.
Kari Commerford, the new GCSAPP director, said she would look into applying for some town grant funding. “Marijuana tax revenue would be best spent on the youth through educational programs, youth development opportunities, and creating substance-free activities that are easily accessible for all youth,” she said. “One of the best methods of prevention for our community is keeping kids active; that being said, not everyone skis or snowboards, bikes or rock climbs. It is important to help kids find activities that make them tick and then provide opportunities for them to engage in them—music, performing arts, skiing, rafting, etc.
“We also could really benefit from having a youth-friendly space for kids to hang out at night-time,” Commerford continued. “One risk factor for substance use is boredom. From a developmental standpoint (I am a clinical psychologist and teach half-time at WSCU in addition to GCSAPP), boredom is somewhat unavoidable during adolescence, so the more opportunities we have for kids to socialize in a substance-free space the less likely they will use substance as a way to ‘do something.’ The tax revenue could be used directly in our community to incentivize businesses to rotate youth nights and close their restaurants down in the off-season once a week for a youth hangout.”
In the end, the issue of a specific Crested Butte excise tax on marijuana is still possible. Crested Butte mayor Aaron Huckstep said the council passed on the idea of proposing the weed tax this year to avoid negatively influencing the proposed school mill levy override and town sales tax proposal on the same ballot.
“The issue will likely be revisited in 2015, although I do not have a clear sign of whether a majority of the council supports an excise tax on what is an already heavily-taxed industry,” explained Huckstep. ”The issue of directing revenue from an excise tax isn’t as simple as it might seem; there are many good reasons for communities to leave excise tax revenues undirected. That issue would need to be addressed if any excise tax were proposed.”
Stay tuned.