Aurora's Marijuana Tax Increase Proposal Moves Forward

A Terrapin Care Station dispensary budtender helps a customer.
A Terrapin Care Station dispensary budtender helps a customer.
Jacqueline Collins
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Aurora's Amendment 64 Committee agreed on February 27 to move the proposal to raise the marijuana sales tax from 4 to 5 percent to a study session scheduled for March 23.

Revenues from the proposed tax increase would fund organizations that help mental health and disadvantaged youth services in the city, as well as work for gang-violence reform and to aid victims of domestic violence. The proposal comes after Aurora voters made the decision in 2018 to remove red-light photo cameras, a program that was generating $2 million a year and funding those programs. The proposed marijuana sales tax increase is predicted to generate an annual $1 million, which would cover some of those causes.

At the Amendment 64 Committee meeting, Aurora officials and marijuana industry leaders discussed the possible effects that the increased sales tax might have on businesses. Aurora City Councilwoman Marsha Berzins, the committee's chair, says that having marijuana industry reps there was important for a productive discussion of the new proposal. "I always like to hear from retailers and what their thoughts are," she says. "The government shouldn't sit around and impose taxes after taxes on the people they're taxing."

A couple of committee members were concerned that the higher tax might frustrate consumers, who'd stop buying from Aurora retailers and perhaps look to the black market.

"The marijuana industry has been taxed over and over, and the question comes up as to why tax the same business so many times?" Berzins explains. "If those prices become too high, people might start buying from the black market. And that's a dangerous thing."

The owners of Starbuds and Green Solution, which have dispensaries in Aurora, voiced concern that the increased tax would hurt legal sales.

"What my case to them was, I never would have brought this up at all if we were overtaxing. I made comparisons between Aurora and other counties like Adams, Commerce City and Denver, and showed how Aurora will still have a lower sales tax," explains Angela Lawson, the councilwoman pushing for the increase. "I'm just trying to figure out a way to backfill these programs that are really essential in this community."

Mayor Mike Coffman, who supports the proposal, says he doesn't think the tax increase would change the way consumers shop. Back in 2014, voters approved raising the limit on marijuana excise and special sales taxes to 10 percent, and Aurora is still well within those limits to raise the tax.

"The voters chose 10 percent in terms of what the city's sales tax is on marijuana, but the city still chose to keep it at 4 percent," he explains. "We already had permission of the voters to increase the tax, so we don't have to go back and ask for permission again. I think it's important that we move forward now and backfill these needed programs, and the marijuana tax program is one easy way to do that."

"From an industry standpoint, we encourage policy makers and voters to make the best decisions," says Peter Marcus, communications director for Terrapin Care Station, a dispensary chain with two locations in Aurora. "We don't want to come in and dictate how the government works."

At the March study session, the committee will take a closer look at how funds would be dispersed; the public can attend the meeting (though no public comment is allowed at study sessions). If the proposal moves on from there, it would go to the full Aurora City Council; public commentary would be allowed at the meeting, where the measure is first read and given a preliminary vote. At a second reading, council would decide whether to finalize the proposed tax increase, which would become effective thirty days after being approved.

In the meantime, there are still details to work out. "The marijuana industry is looked at like a cash cow," Berzins says. "These businesses are already paying a lot in taxes. I'm in agreement that these programs need to be funded, and I agreed to move this proposal forward, but there are definitely other places to be explored besides marijuana."

Coffman plans to continue meeting with marijuana businesses in Aurora, to explain the importance of the tax increase and listen to feedback. "Nobody wants to be taxed, and I get that," he says. "But they'll be still be able to retain their competitiveness even with the tax increase, given that Aurora has a lower tax rate than other jurisdictions."

And the city definitely has funding needs. The Aurora Mental Health Center, one of the organizations that would receive some of the new marijuana tax money, supports "the City of Aurora’s consideration to increase the marijuana tax to support new and expanding behavioral health programs across the city," says CEO Kelly Phillips-Henry. "It will take multiple creative ways to enhance funding to best serve our community — for youth services, veterans' programming, suicide-prevention efforts, vocational training, and critical law enforcement co-response and jail diversion programs."

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