Marijuana taxes over 30 percent to start and other highlights from (almost) final pot bills
The THC-driving-limits bill, which could have a devastating impact on medical marijuana patients like William Breathes, our pot critic, was only one of several huge cannabis-related bills that passed yesterday. The measures still must go through a procedure or two today, the last of the legislative session, but they're thought to be more or less in their final versions. So we asked marijuana attorney and activist Warren Edson for bullet-point takes on the legislation's lingo for everything from taxes to treating weed mags like porn.
As part of House Bill 13-1318, the latest version of which is featured below, the legislature approved a 15 percent excise tax on marijuana, as well as a 10 percent sales tax "that they can adjust up to 15 percent," Edson says. "It talks about how the sales tax starts at 10 percent, but it can be cranked up to 15 percent with a vote of the legislature and the signature of the governor."
This approach appears to have been put in place to avoid another trip to the polls. The Taxpayer Bill of Rights, or TABOR, requires that voters approve all taxes, so a ballot measure to okay the numbers above will be on the ballot in November. But if the bill had simply set the taxes at 10 percent and the legislature subsequently decided an increase to 15 percent was necessary, the matter would otherwise have had to wait for the next election.
This work-around is the kind of thing to which Douglas Bruce, the father of the TABOR legislation, might see as violating the spirit of the law. It'll be interesting to see how he responds after it's signed into law.
In the meantime, Edson notes that local sales taxes will also apply to marijuana -- amounts that are typically in the 6-8 percent range. Thus, even if the 10 percent sales tax sticks, "you're overall going to end up with a tax somewhere between $32 and $35 dollars on every $100 purchase. That's a whole lot of money that gives the black market a whole lot of wiggle room."
• MAGAZINES AND ADVERTISING:
The final version of House Bill 13-1317, the main regulatory proposal, hasn't been published online at this writing. But Edson says restrictions requiring that marijuana magazines be displayed behind the counter, like porn rags, at general-interest outlets remain in the final bill, despite statements by an attorney for High Times that the publication will likely sue over the provision.
The matter "was pretty heavily discussed yesterday," Edson notes. "One person who spoke held up a High Times and another magazine and talked about how they teach people to grow and use illegal drugs. He kept referring to it as illegal drugs, which they are federally, and asking, 'Do you want your kids subjected to this kind of filth?'
"There was also mention of constitutional rights, meaning free speech, but they passed the sucker anyhow."
As such, Edson says, "I think we'll see some challenges the second the governor signs it -- especially to those parts relating to advertising and magazine display and sales."
A previous version of 1317 called for "a serving size for edible retail marijuana products that does not contain more than ten milligrams of active THC, label requirements regarding servings for edible retail marijuana products, and limitations on the total amount of active THC in a package that is no more than one-hundred milligrams of active THC."
These numbers are quite low compared to what's currently on the market for medical marijuana patients, and one edibles entrepreneur, Twirling Hippy's Jessica LeRoux, told us that if they held, she'd probably have to go out of business.
In the end, the digits were "tweaked," Edson says. "The bill now allows for more than 100 milligrams to be in a big package providing that the little packages within the big package are broken down into 100 milligram portions.
"I'm not sure what the protective concern is about that," he admits. "If the concern is somebody getting too much medicated product at one sitting, it doesn't exactly help that issue. There are plenty of Tootsie Roll-type things that are small. If you put 100 milligrams in each one and there are twenty in a package, how does making sure they're wrapped separately make a difference? But it obviously puts a dent into any kind of larger food products, like a whole lasagna or pizza or cake or pie."
• COLLECTIVES AND BUSES:
On Sunday, the Denver Post ran a large article about marijuana collectives whose operators touted them as a way to get around Amendment 64 restrictions. Featured in the piece was one such collective that invited people to come aboard a bus parked at the Denver Justice Center to get their bud on.
Afterward, lo and behold, Edson says, "they passed two amendments banning recreational collectives and marijuana buses."
In his view, the additions represent "a knee-jerk reaction to a Sunday newspaper article, without any discussion or debate as to what they were dealing with."
The term "vertical integration" pertains to a requirement that marijuana retail centers grow the majority of their own product. At first, this approach, which governs the way the medical marijuana industry operates, was set aside -- but last month, a compromise put it in place temporarily. The current text installs vertical integration for nine months after retail shops are allowed to open.
To Edson, this rule is a sop to current MMJ businesses that could have unfortunate consequences.
"We're going to have a huge increase in demand with no increase in supply," he says. "According to state figures, we're expected to go from 100,000 consumers" under the MMJ system "to 1.2 million consumers. That's a ten-fold increase with no preparation for meeting that demand. And cannabis isn't like baking bagels, where, if there's a demand for more of them, you just bake more. You need a two-to-four-month period to grow and properly cure cannabis.
"The industry hasn't been able to meet the demands of 100,000 patients, and we're going to multiply that by ten?" That, says Edson, will "lead to a price increase" even aside from the aforementioned tax boosts.
Despite his "bitching and moaning" about certain provisions of the bills, Edson acknowledges that they're historic when viewed from an outsider's perspective.
"If I'm living in Oklahoma and Utah, these are some pretty amazing pieces of legislation that will create a retail recreational marijuana market that is more progressive than any marijuana market in the world, including Amsterdam. But if you're a Coloradan, like me, it's a little disappointing that we've come so far and didn't get a little further. I wish we'd been able to do better."
He adds that the Department of Revenue will be called upon to write regulations based on the legislation -- and the efforts of staffers there will ultimately determine the shape of the Colorado marijuana industry. "They say the devil is in the details," he points out, "and we haven't even gotten to the devil yet."
Here's the latest, and presumably final, version of House Bill 13-1318 -- the measure pertaining to taxes.
More from our Marijuana archive: "Marijuana bill compromise could let current businesses sabotage new ones, activist fears."
Get the Marijuana Newsletter
Stay informed of the latest marijuana news and views with updates about dispensaries, strains, products, changes to the law, and special offers in your area.