Horse Gulch Blog

Watchdogging for the greater Durango area

17 Oct 2013

Vote yes on Proposition AA–Create jobs, reduce black market crime & fund school construction

Posted by Adam Howell


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Vote yes on Proposition AA in this election to create jobs, reduce black market crime, fund school construction and the regulation of a budding retail recreational marijuana industry.

Proposition AA would implement the taxation of recreational marijuana in Colorado at rates approved of in Amendment 64, the Initiative to Regulate Marijuana Like Alcohol, which was approved by voters in November of 2012.

Specifically, a vote for Prop AA would authorize the state to collect an excise tax of 15% on the average wholesale exchange of marijuana between the grower/processor and the retail business.

The first $40 million dollars collected from the 15% excise tax will be used to fund school construction through the Building Excellent Schools Today (Best) program.

“The program prioritizes funding awards based on issues such as asbestos removal, building code violations, overcrowding, and poor indoor air quality,” says an excerpt from the 2013 State Ballot Information Booklet (blue book). “Program grants are available to public school districts, charter schools, boards of cooperative services, institute charter schools, and the Colorado School for the Deaf and the Blind.”

BEST funds can be used for the construction of new schools as well as general construction and renovation of existing school facility systems and structures, according to the Colorado Department of Education.

For those cities and counties that choose to allow retail marijuana sales, Proposition AA would also authorize a 10% sales tax on it, in addition to the existing 2.9% state sales tax. Fifteen percent of the revenues collected from the 10% percent sales tax will go back to participating jurisdictions, and the rest going to the State, according to the blue book.

“The proceeds will be divided according to the percentage of retail marijuana sales within each jurisdiction,” says the blue book.

In addition to the preexisting city sales tax of 3% in Durango, a county sales tax of 2%, and this new 10% state sales tax on retail marijuana, it would equate to a total sales tax of 15%. This meaning that for $50 dollars worth of cannabis products, one would pay $57.50, but please correct me if I’m wrong on this.

If you don’t buy marijuana, you won’t be taxed.

Yes on 64In all, Proposition AA will give the green light for businesses to begin creating hundreds of jobs in the cultivation, processing, testing and sales of  retail marijuana that is currently prohibited in all municipalities in Colorado until the state sales and excise taxes are approved by voters.

Once this statewide tax rate is adopted by voters, municipalities that allow retail marijuana can begin passing and implementing their own set of regulations.

For people in Colorado, the vote on Prop AA could determine the fate of retail marijuana industries–so don’t forget to vote!

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6 Responses to “Vote yes on Proposition AA–Create jobs, reduce black market crime & fund school construction”

  1. This is a very misleading and half baked article. First, read ALL of the details of AA. It clearly states that in addition to the excise tax for schools, a 10-15% tax will be implemented to create a bureaucratic Marijuana Criminal Enforcement Division. It will start at 10% but will most likely go up to 15% WITHOUT voter approval. So we already voted in favor for amendment 64, part of which will send 15% of retail sales towards schools. Its already written, its set. But there is a bait and switch tactic for the feeble minded in AA. It will create more government control than is needed by throwing a huge amount of money into a new department solely enforcing marijuana. This is a response to the idle threats of the feds, who say they “might” step in if states don’t regulate properly. But Ad. 64 was a campaign to regulate marijuana like alcohol. The tax on alcohol is less than 1% and is more harmful and costs society more than marijuana. Why a tax of up to 30% on pot?
    Jobs? So AA will really hurt legal retail shops who will already have pay large amounts for permits, licenses, and start up costs. The amount of profit will be minimal for business owners with all of the regulations. Retail shops won’t be able to hire as many workers and will be more likely to find illegal ways of covering their costs. Mean while, there will be MORE LAW ENFORCEMENT as a result of AA.
    The Math: So in Durango city tax is 5%, state is 2.9%, with AA there will likely be a 30% tax. Thats 37.9% man. You want $100 worth of weed, bend over and pay $38 extra on that. So if you know a few people and know where to get weed on the street, are you going to pay 38% on something from a store or are you going to get it from a local farmer on the black market for a lot cheaper? The new Marijuana Criminal Enforcement Division will start busting people, funded by legal sales of marijuana. If they don’t, the feds are going to get involved when people are growing legally and selling illegally.

    VOTE NO ON AA!!!!!!!!!!!!!

     

    Myth Buster

  2. Let me correct you on this list of inaccurate falsehoods that you’ve just bled all over the web page.

    First of all, Proposition AA would impose a 15% excise tax on the wholesale exchange of marijuana–not 10% to 15%, as you stated. That’s a minor inaccuracy.

    Second falsehood that you just perpetuated in your comments–you said that 15% of retail sales would go towards schools.

    Truth: According to the blue book language, Proposition AA would impose a 15% excise tax that would go towards school construction. Don’t mix up excise and retail sales tax–one is imposed on businesses buying wholesale products, and the other on retail consumers.

    Third falsehood, that you just made up to fit your argument–people buying recreational marijuana will be charged a $38 dollar tax on a $100 dollar bag of weed. That’s totally False!

    Instead, marijuana products sold to the consumer in Durango will be imposed a 3% City sales tax if you’re in the City, or 2% County sales tax if you’re in the County, plus a new 10% State sales tax that’s added to the existing 2.9% sales tax that’ll be implemented as a result of Proposition AA.

    Pop quiz, Myth Creator: what does 3+10+2.9 equal? 15.9% , not 30%.

    So a $100 dollar bag of weed in Durango would be imposed a $15.90 dollar tax with the passage of Prop AA, which isn’t bad, considering that the increased supply in our community has already caused the price of your average 1/8th to drop by $5 to $10 dollars BELOW street values seen before the dispensaries came into existence.

    By the time you add in the price of taxes, I’m guessing that you’ll be paying the same amount for an eighth in the store as you would be on the street with the passage of Prop AA. The main difference you’d see with the passage of Proposition AA is that it’ll be safer for adults to buy that same product in the store than it would be on the street.

    Our local government won’t even license a retail establishment as it stands without having taxes and regulations in place.

    So basically, the Myth Creator is offering us no solution for implementing retail marijuana establishments, as the majority of Colorado’s voters approved of in 2012.

    Regulation works–Vote yes on Proposition AA.

     

    Adam Howell

  3. Ha ha, got ya fired up. It wasn’t a attack but its my interpretation based on the language on my ballet. There needs to be more debate about this.
    I never said the excise tax was 10-15%. The 15% excise tax has already been voted for in AD 64? Has it not? So i guess i don’t know exactly what an excise tax is, but according to the IRS, Excise taxes are often included in the price of the product. I’m not sure how exactly the excise tax will directly affect retail sales but they will surely affect the businesses profits therefore it will be passed onto the consumer.
    Ultimately there is still a 10-15% tax that will be put on weed with AA. It will most likely go up to 15% because there is really no reason not to. AND voters have no say about the tax increase up to 15%. Alcohol is taxed at less than 1% and is still heavily regulated. 15% is not a efficient use of tax payers money. All that to create more law enforcement?
    Do you really want more cops involved with your transactions? More taxes regulations than what medical marijuana has seen?
    Look at your receipt from city market. 5% is city and 2.9% is state. You just pay county taxes outside of the city limits.

    If you want more narcs, cops, and taxes, vote yes for AA.

    http://www.coloradonorml.org/news/colorado-norml-opposes-measure-aa-as-unnecessary-taxation-on-marijuana-consumers

     

    Myth Buster

  4. You did get me all worked up. Ha Ha!

    I did not mean to attack you, either.

    Excise taxes are taxes on the product between the manufacturer and the distributor. The retail businesses have every right to pass on those costs to the consumer.

    If you’re going to count an excise tax as a tax on the consumer, though, you might as well lump all of the fees that businesses have to pay to get their business up and running, which would make sense for your logic, but no so much for the consumers who are trying to understand how much of a tax that they are going to have to pay for products with the passage of Proposition AA.

    With the moratorium on retail recreational marijuana businesses that officials have imposed here in Durango and La Plata County, there is no guarantee that we will ever get to see this industry take root if we can’t agree to tax it.

    A few things that I see coming as a result of voters passing Proposition AA:
    1. Less violent crime associated with drug deals gone bad.
    2. Fewer minors being sold marijuana products due to tighter regulation, and increased enforcement of the law stipulated in Amendment 64.
    3. More narcs working to keep businesses honest by busting those that don’t abide by Amendment 64.
    4. More people making a SAFER living through an authorized and regulated retail marijuana market.
    5. More administrative assistants and office people hired to process all of the paper work associated with implementation of proposition AA and Amendment 64.
    6. More taxes at the point of sale for people who buy marijuana products.
    7. More tax revenue for the City of Durango to spend on snow removal, public transit, and all of the other public services that trickle up from the tax base.
    8. Hopefully fewer cops, but I could be dead wrong about that.

    You can petition to have the state sales tax rate lowered in the next election with a ballot initiative if you really want to see it kept below 10%. What a huge project that would be!

    La Plata County is having a public forum on pot tomorrow night at 6 p.m. in the Anasazi room of the La Plata County Courthouse. Be there!

     

    Adam Howell

  5. Look, i get the same emails from MPP and Brian Vincente who are saying Vote yes. But i’m thinking for myself and investigating the details on this one.

    I think your going to have to eat a turd sandwich that looks like a cheese burger with AA. Even the pro AA campaign says that the tax will be around 22% WITHOUT local taxes, which would be around 5%.
    http://www.yesonpropaa.com/faqs/taxing-results-on-black-market/
    http://www.forbes.com/sites/jacobsullum/2013/10/17/high-marijuana-taxes-could-derail-legalization-legislation/

    So we are looking at around a 28% rate right off that bat. It can and probably will go up 5% because its written that way. Look at your ballet. So realistically it will be 33% at some point. That is completely unreasonable, especially compared to alcohol taxes. That going to hurt the consumer and the businesses the most.

    Would you agree that medical MJ has been well regulated and fair to the consumers? Fuck yea. The state has been able to manage all of that will small fees to the consumers.

    Why the rush? LPC won’t even vote on retail MJ anytime soon anyways. Lets do this right the first time.

    I think people are putting a lot of faith into the competency of government and law enforcement on this one. We should know better.

     

    Myth Buster

  6. Sadly, the people at the Yes on Proposition AA campaign have had very poor communication with me and the rest of the public about the measure.

    The best information to read on what the measure really proposes can be found in the 2013 State Ballot Information Booklet (blue book).

    When I asked the Yes on Proposition AA people about the claim on their website that “The combined taxes on retail marijuana sales will add about 22 percent to the retail cost of marijuana products,” I got a very poorly-worded response from someone named Chrissie Nims.

    She basically tried telling me that the excise tax will add 7 to 9% to retail prices.

    This claim, however, cannot be confirmed since excise taxes do not require the retail distributor to pass any excise cost on to the consumer’s retail cost.

    Nims also told me that “the taxes would add a combined 21% onto the price,” which differs from the claim made on their website that “the combined taxes on retail marijuana sales will add about 22 percent to the retail cost of marijuana products.”

    Talk about inconsistent messaging!

    Also, Brian Vicente has been unwilling to respond to any of my emails related to marijuana-law reform.

     

    Adam Howell

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