Pubdate: Thu, 17 Sep 2015
Source: New York Times (NY)
Copyright: 2015 The New York Times Company
Contact: http://www.nytimes.com/ref/membercenter/help/lettertoeditor.html
Website: http://www.nytimes.com/
Details: http://www.mapinc.org/media/298
Author: Julie Turkewitz

COLORADO TREATS BUYERS TO ONE-DAY MARIJUANA TAX BREAK

DENVER - Some called it Christmas for stoners. Others warned of 
marijuana anarchy.

Marijuana products across Colorado were nearly tax free on Wednesday 
- - a one-time tax break forced by a quirk in the state Constitution. 
The break knocked away the state's 10 percent tax on cannabis 
purchases - which is imposed on top of the existing state sales tax 
and any municipal taxes - and marijuana shops around the state spent 
months coordinating their distribution plans, advertising deep 
discounts in addition to the tax vacation and encouraging customers 
to start lining up at dawn.

"I've been saying 'Happy holidays' to everybody today," said Mandie 
Farrow, 21, a dry cleaner employee who had just left the Grass 
Station, a shop that was offering 50 percent off on top of the tax 
break. She grinned as she waved her purchase - four grams of a 
marijuana concentrate stuffed in a white paper bag. Behind her, a 
line of eager customers snaked out the door, and a security guard 
with a silver badge had been told to expect a Black Friday-style event.

"This holiday is off the charts," said the guard, Kristian Adam, 47. 
"It's right up there with 4/20 and the state's visit from Phish," he 
added, referring to April 20, a date associated with marijuana use.

Colorado's marijuana consumers owe their good fortune to the state's 
Taxpayer's Bill of Rights, a constitutional amendment that passed in 
1992 as a way of limiting government growth.

Among the amendment's stipulations is one that says new taxes must be 
set back to zero if state tax collections exceed government 
estimates. When legislators learned that tax revenue had surpassed 
expectations in 2014, they voted to return marijuana taxes to zero - 
for one day - and then reinstate them. Voters gave the legislature 
the power to re-establish the tax when they legalized the 
recreational use of marijuana in 2012.

"It's a lost opportunity to be collecting money," said State Senator 
Pat Steadman of the one-day arrangement, "but it's part of our Constitution."

The tax break is a boon not only for customers, but also for 
marijuana growers, who are excused from paying a 15 percent tax on 
all sales they make to stores. On Wednesday, Subarus, minivans and 
armored trucks stuffed with marijuana crisscrossed the state as 
growers raced to get their product out of warehouses and onto store 
shelves before the close of business.

At the Grass Station, workers unloaded their biggest shipment ever - 
at least 17 boxes containing prerolled marijuana cigarettes in glass 
tubes and marijuana flower in white medicine bottles.

"I can only imagine what it looks like for the outside, for people 
who are not in Colorado," the shop's owner, Ryan Fox, 38, said by 
telephone. "They must think we're crazy."

Customers still had to pay Colorado's typical 2.9 percent sales tax 
on their marijuana purchases, as well as any municipal taxes. And as 
the law provides on any day, they were limited in the amount they 
could purchase at one time. Residents could purchase one ounce of 
marijuana (roughly a large fist-sized clump of flowers) and 
nonresidents could buy a quarter-ounce.

Officials estimate the state will lose out on $3.7 million in tax 
collections because of the holiday.

Not everyone is thrilled by the marijuana-selling frenzy. This week 
the editorial board of The Colorado Springs Gazette expressed concern 
about dangers caused by overconsumption on the tax holiday.

"For advocates of marijuana anarchy, holidays don't get better than 
this," the editorial said, adding that "a sudden drug surplus stands 
to burden employers, law enforcement, schools, hospitals and 
responsible parents. It will undoubtedly make pot more available to 
kids, who can lose 8 IQ points with regular use. That's neither 
magical nor funny. It is tragic."

Others, though, like Matthew Lopez, 33, who recently moved to 
Colorado from Laredo, Tex., said the tax holiday was just a part of 
Colorado's quirky character. "The marijuana industry is the main draw 
for this state," Mr. Lopez said, adding that he planned to work 
behind the counter at a marijuana shop. "Who wouldn't want to be a budtender?"

The tax break comes at a time when the state marijuana industry is 
booming. Sales hit $96 million in July alone, a record.

It also comes as Colorado grapples with how to handle revenue earned 
from marijuana sales. The Taxpayer's Bill of Rights requires the 
state to return money garnered from new taxes when yearly revenues 
are higher than expected - meaning $66 million in marijuana 
collections could go back to the public, instead of going to schools 
and other programs, as legislators had planned.

In November, a ballot question will ask voters to give the state 
permission to keep the money, a measure Senator Steadman expects to pass.

Tim Cullen owns Colorado Harvest Company, which has three marijuana 
growing operations and three shops, including one on a Denver strip 
that is increasingly known as the Green Mile for the prevalence of 
cannabis shops along the roadway.

On Wednesday, he said in a telephone interview, his employees hauled 
about 300 pounds of marijuana out of his growing operations and into 
his shops in order to avoid taxes. He said all his stores had lines 
out the door in the morning. "We're rocking and rolling," he said.
- ---
MAP posted-by: Jay Bergstrom