Medical pot shops get head start in Colorado
The Associated Press
Aspen, CO Colorado
DENVER – Medical pot shops will get a nine-month head start when Colorado opens recreational pot sales next year, a legislative panel voted Thursday.
The committee also signed off on taxes that could exceed 30 percent. Lawmakers debated for hours over the right number to make sure Colorado reaps a financial windfall from the newly legal drug, but doesn’t tax it so highly that the black market persists.
The votes in House Finance presaged lengthy debates still to come as legislators struggle to set rules for a never-before-regulated drug that violates federal law.
The head start for existing medical marijuana businesses was set in hopes of preventing a Wild West-style explosion of recreational pot shops across a state that already has more than 500 medical dispensaries.
“What we don’t want to do is have a big rush … where things get somewhat out of control,” said Mike Elliott, head of the Medical Marijuana Industry Group, which represents several dispensaries.
A few lawmakers opposed the idea, saying Colorado’s proposed protectionist scheme for existing pot means a select few will stand to make a fortune when recreational sales begin in January. New marijuana shops wouldn’t be allowed until October of 2014.
“If I could move to a market and be the only person who could sell pizzas … that would be a huge advantage” establishing a pizza clientele before anyone could compete, argued Rep. Brian DelGrosso, R-Loveland.
On the other side, a volunteer group opposed to marijuana proliferation asked for even stricter controls on who could enter the pot business.
“Traditional market forces of supply and demand should not govern the marijuana industry,” said Rachel O’Bryan of Smart Colorado.
The sponsor of the measure, Democratic Rep. Dan Pabon of Denver, said nine months was a good compromise. He pointed out that pot shops wanted a much longer head start, a year or more. The question has been one of the most fiercely lobbied of the year.
“This is sort of an experiment in process,” Pabon said.
The marijuana regulation bill could be debated by the full House as soon as Friday. It includes a long list of proposed marijuana regulations governing how the drug is labeled, advertised and sold.
That bill also includes a marijuana blood limit for drivers. The driving standard was rejected earlier this week in the Senate, so reviving it in the House marijuana bill sets up a late-session showdown.
Marijuana taxes were also approved Thursday in a separate vote by the same committee. Subject to voter approval, the bill taxes recreational pot more than 30 percent. Fifteen percent could be charged as an excise tax, with most profits going to school construction. Another 15 percent would be charged to pay for marijuana regulation, such as safety inspection of the product. The 30 percent taxes would be in addition to a statewide 2.9 percent sales tax and any local sales taxes.
The House Finance Committee debated the appropriate pot tax rate for hours.
Republicans tried unsuccessfully to lower the taxes, arguing that pot users could simply stay in the black market to avoid paying a premium for legal weed.
“Are we going to be heading into a larger problem here?” wondered Rep. Kevin Priola, R-Henderson.
Others insisted the pot users would find legal weed shops so convenient that they’ll pay a premium to avoid finding illicit dealers for questionable pot.
Assistant Attorney General David Blake, who helped write the tax proposal, told lawmakers the tax rate is a great uncertainty. But he insisted taxes could be hefty.
“The legal market would have to be dramatically higher for a reasonable person to participate in the illegal market,” said Blake, who dismissed fears pot smokers would be “going into an alley and risking criminal prosecution” to avoid pot taxes.
Even at rates above 30 percent, Colorado’s recreational pot tax would be lower than the looming pot tax in Washington state, the only other place with legal weed. The pot question approved by voters in that state included a 75 percent marijuana tax.
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