As Colorado Springs voters weigh whether to legalize recreational marijuana sales, proponents are stressing the potential to collect millions in new city tax revenue and opponents have highlighted high costs it could drive for the city.
Voters will consider two recreational marijuana questions in November. One that would only allow the existing 115 medical shops to transition to recreational sales if the owners choose and a second one that would impose a 5% special tax on recreational marijuana sales. If the tax question passes the revenue would be dedicated to public safety, veterans services and mental health programs.
Local proponents backing the question with the Your Choice Colorado Springs campaign say the city has missed out on $150 million in potential tax revenue because residents are buying recreational marijuana in other communities like Pueblo, Manitou Springs and Denver. While opponents, such as Mayor John Suthers, say marijuana revenues will not cover its associated costs and legalization has not forced out the black market as the industry promised when recreational marijuana possession was legalized, among other arguments.
Manitou to 'turn the money off,' reallocate urban renewal funds ahead of Colorado Springs pot vote
After legalizing recreational marijuana sales in 2014, Denver started tracking marijuana tax revenue, costs, crime and numerous other data points that can help show the effects of legalization. Denver officials heard numerous predictions about the impacts of legalization as well, such as how youth use would sky rocket, said Molly Duplechian, Denver Excise and Licenses executive director. She is considered Denver's head marijuana regulator.
"In Denver what we saw is that none of those extreme predictions were achieved," she said.
Denver collected about $72.4 million in marijuana revenues last year including taxes on recreational and medical marijuana and licensing fees from about 440 shops. The city's revenues have steadily risen from about $24 million in 2014.
Pro recreational marijuana campaign in Colorado Springs raises more than $1 million
Denver is an appropriate comparison for Colorado Springs with a similar population. But Colorado Springs probably will have a smaller industry even if the questions pass because the city has capped the number marijuana shops in town at 115. If a license is relinquished for any reason, it cannot be reissued.
Last year Denver spent about $8.8 million on marijuana education, enforcement and regulation. The enforcement includes 10 police officers including folks who work on licensing issues and cracking down on the black market, she said. Total marijuana offenses have steadily declined, the city's data shows, from 788 cases in 2014 to 307 last year.
The city's 5.5% special sales tax on recreational marijuana has been a key piece of what the city got right early on, she said.
"I think that is been very important to us being able to build regulatory and enforcement efforts," she said.
While Denver's metrics show clear benefits to city initiatives, Luke Niforatos, executive vice president to Smart Approaches to Marijuana, said the costs are likely not all inclusive. A 2017 analysis released by the The Centennial Institute at Colorado Christian University found that social costs of marijuana are likely $4.50 for every $1 in tax revenue. The study factored in health costs such as hospitalizations, lost productivity and enforcement such as traffic stops among others.
Marijuana youth use
Denver has focused on funding city priorities, such as marijuana education, services for the homeless, the opioid crisis and city facilities. To combat youth use, the city has spent $24 million since the tax passed on marijuana education programs, including curriculum for afterschool programs about marijuana use and an awareness campaign.
"We are just giving them the facts and how (marijuana) can be damaging for them to use it before their brain is fully developed," Duplechian said.
The Healthy Kids Colorado Survey shows that 11% of students in Denver County used marijuana within the last 30 days last year, down from 25% in 2019. The reasons for this drop aren't completely clear. The pandemic's disruption of classes could have played a role, as well as greater awareness about the dangers, people involved in marijuana policy said.
Data is not available for marijuana use among students in El Paso County last year because not enough youth participated.
The city also required shops to give schools and day cares a 1,000-foot buffer and and limited the signage shops are allowed to have to help reduce the exposure youth have to the shops, Duplechian said. When youth see a high density of shops selling substances such as marijuana and alcohol it can decrease the harm they associate with that substance.
One Chance to Grow Up Executive Director Henny Lasley said Denver has done a better job with regulations to protect kids than other cities, but more steps particularly on the state level are needed. For example, she would like to see even greater limits on high potency marijuana that would build on recent legislation that limited the number of grams of marijuana concentrate patients can buy and started requiring shops to provide educational materials about the effects of concentrates.
She noted many parents do not realize the THC levels in current products are so much higher than the products common in the 1970s or '80s.
Niforatos would like to see a cap on the total percentage of THC products can have in them to protect public health.
Black market trends
Denver saw a large increase in black market marijuana in early years after legalization, but it has fallen in recent years, a 2021 city report showed. The total number of pounds of illegal marijuana processed by Denver police are down from 9,500 in 2014 to about 4,300 last year.
Strict enforcement has helped reign in the illicit market and send a message that it would not be tolerated, Duplechian said.
The city also passed new rules for stores that require cash and products to be securely stored overnight to help combat marijuana shop burglaries. The hope is that even if people get into the stores they won't be able to take any product.
Duplechian recommends that other communities considering legalizing recreational marijuana collect baseline data, such as including crime and black market trends, ahead of shops opening so policy makers can make good decisions going forward.
"Everyone is going to ask what the baseline is," she said.
This story has been updated to correct Henny Lasley's name and to clarify the limits on marijuana concentrate sales apply to the recreational and medical marijuana markets. It has also been updated to clarify reasons youth use may have dropped in Denver.