The Crested Butte News Serving the Gunnison Valley since 1999
Sales tax collection declines for first time
By Alissa Johnson
Colorado’s marijuana industry is booming, growing by 42 percent in 2015, and the Gunnison Valley has undoubtedly benefitted from the industry. In 2015, marijuana sales tax revenue in Crested Butte totaled $140,000—up from $94,000 the year before and representing about $3.5 million in retail sales. But as dispensaries come on line in Gunnison, the revenues in Crested Butte appear to be going down.
According to town finance director Lois Rozman, “November and December of 2015 saw the first decline in marijuana sales tax since its inception.”
In November 2014, the town collected $6,300 in marijuana sales taxes and in 2015 that number was $5,900. In December, collections declined from $10,300 last year to $9,200 this year.
That’s a six to ten percent drop, though collections for the entire year were up 42 percent over 2014. The timing of the decline suggests that the opening of dispensaries in Gunnison is negatively affecting retail sales in Crested Butte.
According to Ben Cowan, finance director for the city of Gunnison, the city of Gunnison collected $10,615 in sales taxes for retail marijuana. That represents $126,403 in total marijuana sales for December.
“While a couple of stores opened in October, December is the first month in which there were more than 3 vendors and no single vendor had more than 80 percent of the market share,” Cowan said.
A confidentiality agreement with the state prohibits the city from releasing revenues until there are at least three reporting vendors and none of them have a majority share of the market in order to protect the confidentiality of individual taxpayers.
As more stores continue to open, local and state marijuana sales taxes have the potential to continue generating significant revenues for the city.
“The city has a special marijuana sales tax of five percent, in addition to the normal four percent city of Gunnison sales tax rate. Also, the city receives 15 percent of the state’s 10 percent retail marijuana sales tax,” Cowan explained.
According to Gail Davidson, city clerk, the city of Gunnison has seven licensed retail marijuana stores, of which five are now open and operating.
“We have a public hearing scheduled for Tuesday evening, February 23, for a potential eighth retail store license. We have no other types of licenses at this time, just retail marijuana stores,” Davidson said.
While it remains to be seen how many stores the Gunnison market can support, statewide numbers suggest that the marijuana industry is sizeable and growing. According to calculations by the Denver Post, there were $996.2 million in legal sales of medical and recreational marijuana—up from $699 million in 2014.
