A Denver Colorado ballot measure could increase the sales tax for marijuana. Proponents of the proposed ballot measure want to use the revenue to fund research for the pandemic.   

The ballot initiative would add another 1.5 percent to the local marijuana sales tax. Advocates almost have enough signatures to put the proposal on the upcoming ballot.

Recreational marijuana purchases carry several sales taxes at the state and local levels. In Denver, there is currently a special marijuana tax of 5.5 percent on recreational cannabis sales. This is combined with a standard 4.81 percent retail sales tax. When you put the two together that amounts to just over a 10 percent tax.

Now the Denver Pandemic Fund thinks it is time to raise Denver’s special marijuana tax to seven percent. This would push the total local sales tax on recreational purchases in the city to just under 12 percent.

According to the ballot petition filed with the Elections Division, this increase would raise about seven million dollars annually. All of the funds will go to the University of Colorado Denver City Center. The funds will promote research for pandemic-related protective technology. This includes protective equipment and updated plans for public health and economic response.

When marijuana activists pursued legalization in Colorado, they argued that a lot of good could come from marijuana sales taxation. Members of the campaign pushing the increased tax petition argue that this measure falls under that framework.

In 2013 Denver voters approved language allowing the city to raise the special marijuana sales tax to as high as 15 percent. But any proposal must be approved by voters or Denver City Council. In 2018, the council approved a tax increase of two percent bringing it to 5.5 percent. The extra two percent goes towards affordable housing.

Local and State Taxes

But the local taxes are not the only extra charges placed on recreational marijuana. The state’s sales and special marijuana taxes add up to a little more than 15 percent on top of the local tax. The overall sales tax on purchases in Denver comes out to a little over 26 percent. If the pandemic ballot initiative passes, the rate will be closer to 28 percent. For a $30 purchase, it would add about 40 cents.

In 2020 Denver made nearly $70.5 million in local tax revenue from legal cannabis sales. Any increase will make a big impact on the total revenue.

Currently, the campaign is in the early stages of reaching out to community members. But the Marijuana Industry Group, a trade organization that represents around 400 cannabis businesses, will oppose the ballot measure, according to executive director Truman Bradley.

“Hopefully, Denver voters will see it for what it is: a vaguely worded money grab on the backs of Denver residents. Of all the worthy causes cannabis could fund, this one is a huge stretch,” Bradley says. “If it passes, Denver customers would end up paying a tax to fund something that, frankly, gets plenty of money from legitimate sources.”

The campaign for the Denver Pandemic Fund has been collecting signatures since March. So far, they have collected over 7,100. In total, they will need 9,184 signatures by July 5 in order to make the November 2 election.

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