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Colorado Springs, Palmer Lake and Cripple Creek weigh in on marijuana retail sales amid industry downturn

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October 15 – After nearly a decade of legal recreational marijuana possession in Colorado, voters in Colorado Springs, Palmer Lake and Cripple Creek will decide whether it is time to allow sales in each area.

Proponents promise a rise in tax revenue, while opponents argue that the social costs are too high.

Palmer Lake and Cripple Creek officials say tax revenue from recreational marijuana is badly needed to cover costs, such as roads. Conversely, the Colorado Springs City Council passed a resolution last week opposing recreational marijuana sales, urging residents to consider the potential harm of marijuana and how such sales could threaten the national city’s reputation as a desirable place to live.

With campaigns going into recent weeks, some medical marijuana business owners in Colorado Springs are anxiously awaiting a decision that could save them financially following a change in state law.

“The city needs to know the business is actually hanging by a thread in the springs…so it’s going to flip it over,” said Ryan McGuire, owner of a local Zipz dispensary.

A law passed in 2021, House Bill 21-1317, aims to address concerns about high potency marijuana and introduces limits on the amount of concentrated medical marijuana that can be purchased in a single day, reviewing the limit from 40 grams to 8 grams, among other changes. Recreational marijuana stores already have 8 grams of concentrated marijuana per person per day.

He said that highly concentrated marijuana could be more effective for those who use it to treat pain, and anyone who uses it every day for medical reasons can exceed 8 grams per week.

Before the purchase limits, medical marijuana patients had been driving from out of town to stock up for a month, said Andrew Heaton, who sells the medical marijuana business in Colorado Springs WTJ MMJ Supply. Heaton and other industry representatives said they believe patients are turning to the illicit market out of convenience.

After the new purchase limits, the number of people coming to Zipz each day has dropped from about 30 to eight or 10 people, McGuire said. Heaton said the drop in sales also forced layoffs and business closures in the industry.

Marijuana revenue is expected to decline statewide this year because recreational and medical marijuana sales are declining, said Truman Bradley, CEO of the Marijuana Industry Group. The decline in recreational marijuana sales was driven in part by other states legalizing recreational marijuana, notably Arizona and New Mexico. But recreational sales in Colorado Springs could slightly increase the state by making it very convenient for many people, including tourists, he said.

The market is also likely to mature nationally, with 19 states allowing recreational sales and others like Canada legalizing it. Jason Wharf, executive director of the Southern Colorado Cannabis Council, said the international destination status for Colorado’s marijuana culture is likely to be over and prices are likely to remain low here.

“It’s really just stabilizing the market, as in any new industry,” he said.

If voters approve of recreational marijuana sales in Colorado Springs, that would allow only the 114 existing medical marijuana stores to move to recreational sales if they choose. Voters can also enact a separate special 5% sales tax on those sales to fund veterans services, public safety and mental health programs.

McGuire said the relocation could keep residents who normally shop in local Denver, Manitou Springs or Pueblo, doubling demand at Colorado Springs stores and helping keep them open.

The Colorado Springs Choose Your Choice campaign estimates that $150 million in revenue has been lost since the city refused to allow recreational marijuana sales.

The Allow Recreational Sales campaign was worth $137,521 earlier this month to help reach voters, according to Colorado Springs city filings. The Safe Neighborhood Coalition in Colorado Springs has not raised any money.

Elected officials of the Colorado Springs City Council and 49th District Council last week urged residents to vote against the questions.

The D-49 decision focused on how students could be more easily exposed to marijuana if sales were allowed, and warned of the drug’s risks to developing brains.

The Colorado Springs City Council statement, which passed a split vote with a three-member opponent, covered a myriad of issues such as how sales could harm the pool of workers by limiting who can pass drug tests, and how the change might affect safety agencies public in the city.

“We’re going to add another addiction industry for profit,” said Dr. Kenneth Finn, who has addressed the board and worked on marijuana issues statewide.

The Colorado Springs Police Department did not respond to repeated requests for comment on the legalization of recreational marijuana sales.

Regarding black market activity in the state, Dan Falls, assistant director of the Colorado Bureau of Investigation, said he couldn’t speak for a general trend after legalization.

“It is really impossible to tell if the illicit market has increased or decreased because we have never had a clear indication of the illicit market to begin to measure against. What we can say is that our teams are staying very busy and basically working at full capacity at this point,” He said in a written statement. Bureau teams focus on growing illegal marijuana mostly in rural areas.

The CATO Institute, a libertarian think tank, studied multiple states after marijuana legalization and found that crime “neither went up nor down.”

In smaller communities considering legalization, officials are looking for marijuana to help solve revenue problems.

In Palmer Lake, voters will decide whether to allow two existing medical marijuana stores to relocate. After several previous attempts to allow the sale of recreational marijuana, trustee Darren Dawson said he believed attitudes could change but felt it was important to let voters decide because of the failed date on the ballot.

Dawson said the additional revenue is critical to maintaining full-time police and fire departments and repairing roads.

“We need to look at revenue and find revenue sources that maintain what we all feel we want,” he said.

The board linked a question to raising property taxes to allow the sale of recreational marijuana; If both questions are passed, the mill tax would go up 15 mills instead of 30. A 15 million increase on a $400,000 home would add about $390.75 to the tax bill. Lake Palmer already imposes a special 5% tax on recreational marijuana sales.

In Cripple Creek, the issue of marijuana could pave the way for the first marijuana stores in Teller County. If the question passes, the town could issue four marijuana licenses – two medical and two recreational, campaign spokesman Kyle Blakely said. One company could hold a medical license and a recreational license, he said, reducing the number of stores.

City Councilor Charles Solomon said he thinks the community is largely divided on the issue, but added that the need for more tax revenue is clear.

“If you’re driving around town, the roads are in dire straits,” he said.

Allowing pot sales will increase the need for emergency services response, increase the cost of law enforcement regulation and response, and increase hospital admissions, said Teller County Sheriff Jason Mixel.

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