Voters in Small Colorado Town Tax Medical Marijuana Before It Arrives

April 7, 2010 - 5:33 AM
One application to sell medical marijuana is pending, and city leaders said they wanted to be ready with a tax source in case the dispensary opens
Fruita, Colo. (AP) - A small western Colorado town has become the first in the state to levy a city tax on medical marijuana, even though it doesn't yet have a dispensary.
 
Voters in Fruita, a town of about 11,000 at the foot of the Colorado National Monument, decided Tuesday to impose a 5 percent sales tax on marijuana.
 
One application to sell medical marijuana is pending, and city leaders said they wanted to be ready with a tax source in case the dispensary opens and requires city resources such as additional police patrol.
 
The tax passed 1,533 to 936. Already dispensaries pay a 2.9 percent state sales tax, though Colorado revenue officials aren't sure exactly how much comes from the sale of pot.
 
Last year, Oakland, Calif., became the first city in the country to create a special tax on marijuana sales. Voters approved a measure requiring dispensaries to pay $18 for every $1,000 in gross sales; the rate for other retailers is $1.20 for every $1,000 in gross sales.
 
The ballot question in Fruita wasn't the only marijuana question in Colorado municipal elections. The town of Nederland, about 47 miles northwest of Denver, was considering whether to decriminalize pot possession in small quantities for adults over 21.
 
Marijuana possession has already been decriminalized in Denver and Breckenridge. The measures are mostly symbolic, though, because pot possession remains a state crime except for people with medical clearance for the drug.
 
A voter-approved amendment to the Colorado Constitution allows limited marijuana use for certain medical conditions but doesn't regulate dispensaries. Fruita's rules include background checks for dispensary owners.