The Pueblo City Council decided to waive retail marijuana excise taxes for the next three years, as a result of a 4-2 vote held on Tuesday.
Since 2016, a tax of 8% on retail marijuana grown within the city boundaries has been in effect. Those in favor of removing the tax believe it will encourage new enterprises to set up in Pueblo, create jobs, and support the local marijuana sector, which is currently facing challenges.
Councilman Dennis Flores expressed his concern about potential job losses and the changing landscape of the industry, noting the surprisingly low amount of excise tax collected by the city.
In 2021, Pueblo garnered close to $800,000 from this tax, but the figure significantly dropped to $159,601 in 2022. It’s projected to stay under $200,000 for 2023.
The approved ordinance states that the tax suspension will start from January 1, 2024, and end on January 1, 2027. The tax is expected to revert to 8% in 2027 unless further actions are taken.
Council members Flores, Larry Atencio, Sarah Martinez, and Vicente Martinez Ortega voted in favor of the suspension. Heather Graham and Regina Maestri opposed the ordinance, while Councilor Lori Winner was absent from the meeting.
Maestri argued that funds from the marijuana excise tax should be allocated towards community projects and law enforcement needs, rather than being removed from the city’s budget.
Graham also disagreed with the ordinance, stating that any change to the marijuana tax should be decided by the public. She referred to a failed attempt in 2022 to gather signatures for a ballot question that would have removed marijuana excise taxes, suggesting that the public might not support the suspension.
The original 8% tax rate was set by voters in November 2015, with the provision that the city council could alter the rate as long as it doesn’t exceed 15%.
Local advocates, including former legislator Sal Pace and David Lemon, spoke in favor of the suspension. Pace regretted his previous support for the marijuana excise tax, stating it’s detrimental policy. Lemon highlighted the disparity between the city of Pueblo and Pueblo County, which has a 5% tax rate, and noted the negative impact on local marijuana cultivation jobs.
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