The Durango City Council will not ask the voters to approve a 5 percent tax on recreational marijuana.
After hearing from supporters of the marijuana industry the councilors decided they did not want to fund improvements to city buildings by taxing one industry.
“We need to think of a more creative way to make this happen,” said Mayor Dean Brookie.
City Manager Ron LeBlanc said the city has exhausted most options to fund improvements to buildings such as the Durango Police Station and the Carnegie Building.
The city estimated the tax could raise $900,000 annually for buildings.
Representatives from the industry argued that their business are already overtaxed, and the councilors seemed convinced.
In town, marijuana customers pay 17.9 percent in sales tax and 15 percent in excise tax, said John Menzies, owner of Animas Herbal and Wellness.
Menzies argued that the perception of marijuana as a massive cash cow with everybody getting rich is false, and the industry is already overburdened by fees and licensing and operating fees.
“This would never happen to any other industry,” he said.
The owner of the Greenery, Joel Cameron, echoed some of these concerns about overtaxation. Specifically, he said the voters might find it confusing to be presented with a choice of keeping $58 million of state marijuana collections while at the same time Durangoans are being asked to raise municipal taxes on it.
Other speakers raised concerns about putting undue pressure on a fledging industry, and many businesses have already shouldered hefty startup costs.
“You guys have reduced our bottom line to almost nothing,” said Jonny Radding, co-owner of Durango Organics.
Before these arguments were presented, LeBlanc recommended the council place a marijuana-tax question on the ballot.
The retail marijuana industry is estimated to bring in $16 million in annual gross revenue, and there are more stores planning to open, he said. However, opponents argued it is unfair to turn to just one industry.
“It almost sounds like it’s the marijuana industry’s responsibility to fix all the city’s problems,” Menzies said.
While no one spoke in favor of the tax, other people previously have voiced support for the tax in a city poll.
The poll asks residents whether building improvements should be paid for with property taxes, sales taxes or marijuana sales.
So far, the poll has garnered 46 responses, and 39 percent of them supported the marijuana sales tax.
These taxes are also not uncommon, across the state, voters in 36 towns have approved additional sales or excise taxes, LeBlanc told the council. He asked the council to allow the people to decide whether or not the tax would be appropriate.
“That’s consistent with democracy,” he said.
The councilors said it was likely that if put to vote it would be approved, but it would not be fair for a small demographic to pay for infrastructure that benefits everyone.
“How does everybody contribute equally?” Councilor Christina Rinderle asked.
The city staff will be looking into those options.
mshinn@durangoherald.com