Colorado House gives initial approval to marijuana tax measure

Colorado marijuana tax hbtv hemp beach tvColorado lawmakers spent Monday afternoon trying to find the Goldilocks level for recreational marijuana taxes — an amount neither too high to discourage voters from approving it nor too low to pay the costs of pot legalization.

At the end of the debate, the state House gave initial approval to a bill that proposes a 15 percent excise tax and an initial 10 percent special sales tax on recreational marijuana, over the objection of Republicans who said the tax rates are too much. Voters would have to ultimately approve the tax rates, though the bill that proposes the rates must first receive a final vote in the House and a full vetting in the state Senate before going to the ballot.

“We are running a risk of setting this too high and having it not pass,” Rep. Brian DelGrosso, R-Loveland, said during the debate on House Bill 1318, the tax bill. “We are playing a game of chicken with the voters.”

Democrats, meanwhile, assured their colleagues that voters would approve the taxes, citing a poll that suggests wide support for a 10 percent sales tax on marijuana.

Rep. Dan Pabon, D-Denver, called the Republicans’ arguments “fear-mongering” that was based on “some fundamental disagreement with the subject matter of what the voters approved.”

The bill initially proposed a 15 percent special sales tax, in addition to the 15 percent excise tax. Faced with the Republican’s disapproval, Rep. Jonathan Singer, a Longmont Democrat who is the bill’s sponsor, proposed an amendment that would set the sales tax rate at 10 percent to start, though lawmakers could later raise it to 15 percent.

Republicans said the rate was still too high and said the state would be cash-strapped to pay for regulation of recreational marijuana stores if the tax doesn’t pass. House Minority Leader Mark Waller, R-Colorado Springs, complained that marijuana-legalization advocates are lukewarm about supporting the taxes on the ballot, though Singer said they are supportive of the measure.

That perceived reluctance, though, has sparked talk of linking a repeal of marijuana legalization to the tax measure — in part to provide marijuana advocates incentive to back the taxes. No repeal measure has been introduced, but Rep. Frank McNulty, a Highlands Ranch Republican who supports the idea, hinted that talks about a repeal are ongoing.

McNulty said he still has “a desire that bipartisan common ground can be found.”

The tax bill still must clear a final vote in the House — which could come as early as Tuesday — before heading to the Senate, where it faces another series of votes.

The bill was the second marijuana measure the House passed on Monday. Earlier in the afternoon, the House gave final approval to a major bill laying out regulations for recreational marijuana businesses.

The bill saw no major changes on Monday but underwent a significant shift in the days prior.

Before sending House Bill 1317 — the regulations bill — to the Senate by a vote of 35-29, lawmakers extended the window of exclusivity in which only medical-marijuana dispensary owners will be able to apply to open a recreational pot shop. In the version of the bill that hit the House floor, the window had been three months. That window is now set at nine months, until July 1, 2014.

House members also added in a temporary requirement for vertical integration, the mandate that growers and sellers operate as part of the same company. That’s how medical-marijuana dispensaries are currently structured. Under the compromise reached for HB 1317, vertical integration will be required until Oct. 1, 2014, after which growers and sellers can operate separately.

The House also added an amendment requiring marijuana regulators to come up with some way of restricting the size of commercial marijuana grows. And, most contentiously, they added in a limit for how high is too high to drive. That limit had been in a separate bill — which a Senate committee killed last week.

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