Pubdate: Mon, 18 Jan 2016
Source: Record, The (Kitchener, CN ON)
Copyright: 2016 Metroland Media Group Ltd.
Author: Betsy Powell
Page: A8


Colorado Cities High on Benefits of Taxing Marijuana; Proceeds Go to 
Infrastructure, Substance-Abuse Programs

The gym rats who join the still-under-construction recreation centre 
in central Denver will owe their workouts to weed smokers.

In Pueblo County, south of Denver, students will soon be able to walk 
to school on a sidewalk paid for by marijuana tax revenue, or apply 
to the world's first cannabis-funded scholarship program.

"We're taking dollars that were previously going to drug cartels in 
Mexico and using them to provide opportunity and education to the 
next generation," says Pueblo county commissioner Sal Pace.

Elected officials there recently approved the use of $2.5 million 
U.S. in pot taxes to fund a mix of community projects.

As Canada prepares to legalize marijuana, cash-strapped governments 
at every level across the country are eyeing the potential tax 
revenue recreational pot might generate.

In Toronto, where the 2016 budget process is underway, many 
councillors, fearing voter backlash, are loath to raise or impose new 
taxes, even socalled sin taxes, while the city falls behind in its 
ability to fund public services.

But in Colorado, one of four U.S. states so far to legalize pot for 
recreational use, voters and lawmakers have embraced the idea of 
collecting taxes from its sale.

In a statewide vote last November, 69 per cent of voters even 
rejected refunds after the state collected an unanticipated $66.1 
million in pot sales tax revenue. Instead, $40 million went to school 
construction and $12 million to youth and substance-abuse programs. 
The remaining $14 million went into a discretionary fund, according 
to the Denver Post.

Fixing roads, building sidewalks and funding post-secondary school 
scholarships with pot tax revenue "was never something I thought 
would be a reality in my time in government," says Pace. "It's a bit 
surreal." But marijuana-related tax revenue - projected to pump $28 
million into Denver's coffers this year - is no fantasy, says Tyler 
Henson, president of the Colorado Cannabis Chamber of Commerce.

"That extra tax revenue the cannabis industry is bringing in is very 
helpful for the state of Colorado and the cities," says Henson, who 
calls his organization a "pro-business association for the marijuana industry."

In 2014, when there were financial difficulties with the construction 
of a Denver recreation centre, the city made a one-time allocation of 
$3.2 million toward the $33-million facility - after months of 
collecting higher-than-expected retail marijuana revenue. Shovels 
went into the ground late last year.

"I would never say that single-handedly legalizing recreational 
cannabis would be the solution to every government's problem," Henson adds.

"But it's a good tool to have, and it can alleviate some problems 
especially if a city or a county is looking at a budget deficit."

Ashley Kilroy, executive director of marijuana policy for the city 
and county of Denver, said pot revenue is prioritized toward 
regulation, education, enforcement and public health, while excess 
revenues go into general revenue to pay for city services.

However, that's "a very small portion of the overall city budget," 
she wrote in an email.Marijuana revenue constitutes only 2.3 per cent 
of the city's general revenue fund.

All retail marijuana and related products sold in Denver are subject 
to a general city sales tax rate of 3.65 per cent, plus a special 3.5 
per cent sales tax, for a combined 7.15 per cent.

To ensure robust regulation of pot and responsible implementation of 
legalized sales, "it takes a significant dedication of resources, and 
that costs money," she wrote.

"There should not be an expectation that marijuana revenue will make 
a city flush with cash."

Mason Tvert, director of communications with the Washington, 
D.C.-based Marijuana Policy Project, says some jurisdictions in 
Colorado and other legal pot states aren't limited to imposing sales taxes.

The state also allows local government to regulate "social 
consumption venues," which pay licensing fees.

As of June 2015, more than 21,000 Colorado residents held valid 
occupational licences to work in marijuana-related businesses.

Those businesses employ workers and use services from other sectors, 
such as construction, legal, insurance and real estate.

"There's lots of opportunities," Tvert says.
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MAP posted-by: Jay Bergstrom