The pipe dream of a new sales tax on recreational marijuana sales in Aspen went up in smoke on Tuesday.
During a work session, three Aspen City Council members heard about the pros and cons associated with a sales tax on recreational pot. At the end of a 30-minute discussion, Mayor Steve Skadron, Councilman Adam Frisch and Councilwoman Ann Mullins voiced no support for putting the issue in the hands of voters by asking for a special sales tax on the November ballot.
According to Skadron, Councilman Dwayne Romero, who was not present, wasn’t high on the idea, either. Councilman Art Daily is said to be traveling and could not make the meeting.
The tax was estimated — a very loose estimate, according to City Manager Steve Barwick — to produce anywhere from $250,000 to $550,000 in city revenue annually, depending on the potential sales tax rate. Recreational and medical marijuana sales already are subjected to the 2.1 percent Aspen sales tax imposed by the city on all retail sales.
The state already imposes a 10 percent sales tax on recreational marijuana sales in addition to its 2.9 percent state sales tax on general consumption. Any additional local taxation would not apply to medical sales, according to the proposal floated to the three council members.
Aspen only has two recreational marijuana shops — Silverpeak Apothecary and Aspen Green Dragon — which makes it hard to estimate how much a special tax on pot would garner, officials said.
“The financial impact is difficult to calculate and will depend on the supply and demand for (recreational) marijuana in Aspen,” says a memorandum from Alice Hackney, city accounting manager.
Jordan Lewis, owner of Silverpeak Apothecary on East Cooper Avenue, told council members that recreational pot already is heavily taxed, and that although there was an initial rush for the product when it became legalized earlier this year, sales are beginning to stabilize.
For competitive reasons, Lewis declined to discuss his sales figures. However, he said his overhead on each sale of pot is in the 50 percent range when taxes and other costs are considered.
Council members said the proposal needed more study over a longer period. Recreational pot sales became legal in Colorado on Jan. 1. Locally, sales of the recreational product didn’t start until March 5.
Officials outlined various beneficiaries of the potential revenue, including early childhood education, drug treatment and prevention and administration of marijuana laws and enforcement.