Cripple Creek Voters To Decide Fate of Marijuana Sales and Taxes

Local Residents Face Three Ballot Issues in November

Rick Langenberg


It’s now official:  The highly contested issue of legalizing the retail sales, grow and medical uses of marijuana operations in the city of Cripple Creek will be decided by local voters.


However, future reefer shops will face some pretty hefty taxes, if the pro-cannabis measure is approved.


Last week, the  Cripple Creek City Council, following extensive discussion, signaled the green light for the ballot language for a pro-marijuana issue and for a related tax proposal. Contrary to a previous meeting, no public comment, pro or con, was voiced at the meeting or via Zoom.


City Attorney Erin Smith told the council they didn’t have a choice in forwarding the issue to the voters. But she stated they have more latitude in the taxing of legal weed.


As a result, the council will impose total proposed taxes that exceed the 20 percent mark, with excise, sales and occupational tax levies. Local elected leaders took the position that they mainly want to cover the expenses involved with regulating the industry.


“We just want to cover our costs,” said Councilman Mark Green. “We are going to have to feel our way through this…We don’t want to cost the city more money than it is worth.”


The councilman and other elected leaders  hit a caution button last week about overburdening future marijuana shop operators with an abundance of regulations.


The big question, though, centers on how much money legal marijuana will generate for the city of Cripple Creek. In the proposed ballot language, the city has estimated its annual net revenue as ranging between $100,000 and $1 million. No detailed studies have occurred regarding how much pot revenue Cripple Creek can generate and no solid proposals have come forth from potential marijuana-related operators.


By law, the city has to set its potential revenue  mark as fairly high, as additional tax dollars that exceeds these numbers must be returned to the taxpayers, under the limits of the Taxpayer Bill of Rights.


“There are a lot of  moving parts to this issue,” said Finance Director Paul Harris. He said officials have reviewed a score of statutory towns that have legalized retail marijuana. The town that Creek sees itself on a similar path, if marijuana sales are approved, is that of Central City. Central City is a fellow gaming community that has pursued alternative revenue streams other than  legal betting.


According to Harris, the small gaming town, just west of Denver, generates between $250,000 and $300,000 a year in extra marijuana tax revenue. He sees Central City as a realistic model to follow.


Harris also cited a few unknown cards in the city’s pro-marijuana play. For example, he reminded the council that this issue is also slated for a city-wide vote in Colorado Springs. If Springs voters say yes, then Harris argues that Cripple Creek’s portion of the legal weed pie will definitely diminish.


Plus, he cited declining revenue for the marijuana arena in Colorado, with a 30 percent decline in the pot revenue  generated annually.


At last week’s discussion, a few council members sought more specific wording in reference in how the marijuana-related tax money can be allocated.


But Smith urged caution in this matter. “The question is simple. My recommendation is we keep it that way,” said the city attorney.


As for specific funding purposes, approximately 25 percent of the proposed 5 percent excise tax, which deals with financial arrangements made between the marijuana grower and retailer, will be used for the marketing of entertainment and recreation within the city.


The main local pot levy deals with a possible city sales tax levy that can reach the 18 percent mark.  Originally, the city has proposed a 10 percent marijuana-related sales tax , but learned last week it could raise this amount.


Smith, though, said she wants to review further the cannabis tax limits for the town, and plans to finalize these numbers during the final reading of the ballot questions, set for Sept. 7.


Split Opinions on Legalizing Retail Marijuana


The council, in an earlier meeting, voted to reject the proposed ordinance submitted by a citizens-initiated petition group, called Cripple Creek Wins.  The group submitted more than enough valid autographs from qualified electors of  Cripple Creek to force a vote.


In fact, the council had the option to accept the group’s proposal and avoid a vote altogether. That path, though, is rarely adopted by municipalities in the Pikes Peak region.


If enough votes occur from local voters on Nov. 8, Cripple Creek will become the first town in Teller County to legalize retail marijuana.


The proposition, though, has generated stern opposition from law enforcement officials in Teller County, such as Teller County Sheriff Jason Mikesell, and by the county commissioners. They argue that Telle County just doesn’t  have the current resources to grapple with the legalization of retail marijuana.


The city of Cripple Creek has taken a neutral stance and  have cited the issue as a community-wide decision.


Campaign leaders of the push remain cautiously optimistic. “We believe there is a lot of support in the community for this issue,” said Kyle Blakely, the registered agent of the group proposing the pro-cannabis push. As for potential impacts, Blakely contends that actual cannabis usage won’t  increase much if the proposition passes. “People who are taking cannabis are already doing so,” said Blakely.


He said the thrust of the group’s campaign will deal with targeting the actual voters of Cripple Creek, and in recruiting more registered voters who support the idea.


The idea of legalizing legal week in Cripple Creek certainly is not a new proposition.


Oddly enough, the campaign started to move forward when the city discussed the possibility of higher betting device fees for casino operators last winter.


This led the casino operators to urge city officials to consider other revenue sources, than just relying on the gaming industry for funding its operations.


Altogether, Cripple Creek voters will face three ballot issues, with two questions dealing with legal weed and another issue calling for a one-cent sales tax hike.