Colorado Springs News, Sports & Business

Medical marijuana tax collections taking off

DANIEL CHACÓN Updated: June 21, 2010 at 12:00 am

Sales of medical marijuana and marijuana-laced products in Colorado Springs — which topped $1.6 million in April alone — are generating tens of thousands of dollars in revenue for the city.

From January 2009 through April, Colorado Springs has seen a tenfold increase in monthly sales tax revenue from medical marijuana, from $4,000 to $40,000.

Last year, the city collected $111,000 total from the sale of marijuana and marijuana-infused products, such as brownies, lotions and teas.

In the first four months of this year, the city has collected $123,000, more than all of last year, when the industry started to take off.

Although sales tax revenue from medical marijuana is growing fast – faster than any other sector of business in 2010 – it’s still less than 1 percent of all sales taxes collected by the city, which budgeted nearly $106 million in sales tax revenue for 2010.

Some city officials and industry supporters say medical marijuana is having a ripple effect on the economy, indirectly putting even more money in city coffers.

“The medical marijuana industry may be accounting for more sales tax revenue increases than is simply reflected in the amount of sales tax collected on the sale of marijuana,” Councilman Tom Gallagher said Monday. “There’s a lot of electricians and carpenters and plumbers that are being employed.”

For Mike Miller, new dispensaries mean business.

Miller, who owns Colorado Sign Management, installs temporary signs and paints logos on business windows. In the last six months, he said he’s installed signs for more than six dispensaries.  

Jack Roth, owner of Alternative Medicine of Colorado Springs, has poured tens of thousands of dollars into renovating his dispensaries. He spent about $25,000 on materials, security alarms and construction costs to renovate Alternative Medicine of Colorado Springs in Old Colorado City and plans to spend $55,000 on another dispensary he plans to open soon.

But the boom in business may be short-term.

A group of residents is proposing a November ballot initiative to ban medical marijuana dispensaries in Colorado Springs, which is home to more than 100 dispensaries, up from only a handful last year.

Steve Wind, who is gathering signatures to place the initiative on the ballot, said he believes most city voters don’t want dispensaries.

“We are going to let the voters of Colorado Springs determine whether they want to have tax revenue or if they want to ban marijuana dispensaries,” he said.

Mayor Lionel Rivera said he’s taking a wait-and-see approach on whether the medical marijuana industry is good for Colorado Springs. He said it will take time to determine what kind of demand the industry will have on police and fire services and the City Clerk’s Office, which oversees the registration and licensing of dispensaries.

“Am I on one side or another? I’m one who is willing to the let the industry move forward and let us put the framework in to control it and manage it from the municipal standpoint,” he said.

Rivera said he suspects the increase in sales tax revenue is coming from regulating the industry.

“I don’t think that all of a sudden we increased the usage by tenfold,” he said. “I just think it went from the back alley, drug-dealing transactions to the dispensaries.”

Joanne Goodner, co-owner of Westside Wellness Center, said dispensaries are legitimate businesses that have helped boost the city’s economy. They put people to work, from electricians to security alarm technicians, and occupy what used to be vacant buildings, she said.

“This is revenue,” she said, referring to the taxes dispensaries are paying. “This is going to our city, and it’s staying within Colorado.”

Staff writer Emery Cowan contributed to this report.

Call the writer at 476-1623

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