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Pueblo County asks voters to change marijuana tax collections

Posted at 4:24 PM, Oct 14, 2018
and last updated 2018-10-14 18:41:28-04

PUEBLO – When voters in Pueblo County open their ballots this week, they will find only one countywide issue to vote on this election cycle. Question 1A asks for a change in the way the County collects taxes on retail marijuana, and the outcome could have a big impact on how the community funds a popular scholarship program.

The scholarships are awarded by the non-profit Pueblo Hispanic Education Foundation. Sophomore Fredlina Gutierrez, who is studying psychology at CSU-Pueblo, is a recipient. She is paying her own way through college and said the scholarship program holds her accountable and motivates her to do her best.

“I normally work 2 or 3 days week,” she said. “So, the scholarships really do help a lot, and the grants, they all help a lot, they help pay for school.”

Ian Herrera is a freshman at Pueblo Community College and plans to earn a degree in journalism. He also was awarded a scholarship through PHEF and said the award lets him focus on his studies rather than worrying about how to pay for his education.

“It definitely helps, it takes a lot of the strain off because, even though it’s not covering all of it, it takes a huge portion out and that’s just that much less to worry about,” Gutierrez said.

Both students are striving to earn their degrees without going into debt. The money for their scholarship comes from taxes that Pueblo County collects on wholesale marijuana sales from growers to stores. Average prices for those bulk sales dropped 33 percent in both of the two most recent fiscal quarters.

“The market has become pretty over-saturated, and a lot of the costs of some of the products have definitely been going way down,” said Ethan Shean, the District Manager for Strawberry Fields, a recreational marijuana store in northern Pueblo County.

Lower marijuana prices mean fewer taxes. Fewer taxes means fewer scholarships.

Colorado lawmakers recently changed the requirements for how communities can levy taxes on bulk marijuana sales. Rates are currently set on the average market price. However, the new law now requires taxes to be calculated on a percent of the contract amount.

Since commissioners were going to have to ask voters to update the tax law anyway, they decided to also ask for an increase in retail sales tax collected from customers in stores from 3.5 percent to 5.5 percent.

“This has the potential to really impact our students who receive the scholarships, but also future students,” said Christina Trujillo, Executive Director of PHEF.

If 1A passes, Trujillo said the County is expecting to bring in $1.2 million a year for scholarships, nearly twice the amount received this year. If it fails, the scholarship funding will continue to dwindle.

Shean, the manager at Strawberry Fields, said that Pueblo has some of the lowest retail marijuana sales taxes in the state when compared to other communities.  He doesn’t believe the extra 2 percent will greatly impact sales.

“An average ticket of about $70, you can see an increase of about $1.50 on there.”