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Marijuana taxes: The campaign's case in favor of Proposition AA

Opponents of Proposition AA, intended to set tax rates on recreational marijuana sales, have gotten a lot of attention for showy events like Monday's free-joint giveaway on Boulder's Pearl Street Mall. But polls earlier this year showed 77 percent of those surveyed support such taxes, and Joe Megyesy, communications director for the Committee for Responsible Regulation, the Yes on Prop AA campaign, remains confident most supporters will back them. Moreover, he disagrees with critics who think they're too high.

According to Megyesy, "Most experts and those of us on the campaign -- a diverse group that's been working on marijuana issues for a long time -- feel the rate is at a level that will allow marijuana to become legitimate and emerge from the black market."

Proposition AA -- see the text as it will appear on the November ballot below -- calls for an excise tax on recreational pot sales of 15 percent, as dictated in Amendment 64, which legalized adults 21 and over in Colorado to use and possess small amounts of cannabis. In addition, the measure sets a 10 percent sales tax that can be raised to 15 percent if necessary to cover costs of the program.

Critics such as Corry, whose invitation to Vice President Joe Biden to help hand out free weed earned censure from Megyesy, believe these rates are excessive, especially given that they'll be supplemented by standard state and local sales taxes that could push into the 30-40 percent range. He believes the same sales tax consumers pay on other products, and perhaps a special marijuana tax comparable to that placed on alcohol (less than 1 percent in most cases, he says), would not only be sufficient but fair.

Megyesy's response?

"I also worked as a lobbyist on implementation of Amendment 64 at the State Capitol," he says, "and we had a big discussion back in March and April of this year about what the rates should be. Since the first $40 million on the excise tax -- the tax on wholesale activities -- is earmarked for public-school construction, which was a key messaging point of Amendment 64, there was a concern among legislators that there wouldn't be any money left over for enforcement. That's where the notion of the additional sales tax came up.

"When they originally proposed the sales tax," he continues, "it was a lot higher than we're talking about now: 25 percent. And we were very concerned at that point that marijuana would never emerge from the black market, and there would be more and more black market activity, and further gray market activity, that would really hamper marijuana's ability to come out as a legitimate industry. We fought hard to get that tax rate lower than 25 percent, and even though some people wanted it lower than the 10-15 percent range, that was the compromise we were able to arrive at."

The No on Prop AA camp contends that even this amount will push marijuana consumers to eschew legitimate retail outlets for underground sellers, thereby crippling the fledgling industry. But Megyesy isn't buying it.

Continue for more about the Yes on Proposition AA campaign, including a video and the measure's text.

"The convenience of buying marijuana, and paying this amount of tax on marijuana, will still outweigh any benefits consumers might think there would be in trying to get it from the black market," he believes -- not only because of the "hassle factor," but also due to "the comfort in knowing exactly the potency and the quality. You're going to be able to buy with confidence that there won't be any contaminants, and that you're getting exactly what you're paying for."

Joe Megyesy.
Joe Megyesy.

These arguments, and others like them, will be at the heart of the Yes on Prop AA campaign, which launched earlier this month with an event at the State Capitol attended by a slew of folks from the marijuana biz, including representatives of the Medical Marijuana Industry Group and the Cannabis Business Alliance. Also present were campaign chairman Brian Vicente, who co-authored Amendment 64, and politicians such as representatives Dan Pabon and Pat Steadman. A video from the get-together is on view below.

Additional supporters of Proposition AA include the Denver Metro Chamber of Commerce, the United Food and Commercial Workers (UFCW) and a couple of notable officials who last year urged voters to turn down Amendment 64, Governor John Hickenlooper and Colorado Attorney General John Suthers. Megyesy expects they'll be joined by plenty of others prior to election day: "We're still building our coalition, still making our case to a lot of organizations out there. But we already have a lot of people who were opposed to Amendment 64, which just shows the broad base of support this initiative has. They were against Amendment 64, but they're in favor of this."

At this point, decisions are still being made about campaign tactics, but "social media will definitely play a part in it. We've launched our website, and we'll have an appropriate presence on Facebook, Twitter, etc. And we're definitely hoping to have some print advertising and mailers, as well as relying on a number of surrogates to speak on the campaign's behalf. We're going to organize a statewide tour of editorial boards and we'll have a number of high-profile and credible people to speak on the campaign's behalf."

Is he concerned that opponents of Proposition AA will begin gathering momentum as a result of events like the free joint giveaway in Boulder and a similar gathering earlier this month in Denver?

"I don't think we're very fearful of that," he replies. "It's unfortunate that these groups," including the board of directors for Colorado NORML, "have come out and voiced their opposition to the tax. But our data shows that this still will pass overwhelmingly.

"Really, we're just fulfilling a commitment we made to Colorado voters -- the 55 percent of Colorado voters who voted for Amendment 64 with the notion that marijuana would be taxed to pay for its own regulation."

Look below to see the Yes on Proposition AA campaign launch and the measure's text.

Proposition AA: Retail Marijuana Tax

More from our Marijuana archive: "Marijuana: Attorney Rob Corry on today's free-joint rally in Boulder."


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