Up In Smoke

Cannabis, weed, pot, ganga, dope, reefer, chronic, Mary Jane or marijuana—it doesn’t matter what you call it—Attorney General Jeff Sessions hates it with a fiery passion.

He’s even gone so far as equating the drug to heroin and publicly shaming Lady Gaga for allegedly boasting an addiction to it. While the so-called “War on Drugs” originated with Richard Nixon and ramped up in the ’80s as a broken campaign promise during election season, Sessions has been barreling along on his own decades-long crusade to snuff out the green stuff, and take down any of the “bad people” associated with growing, selling, buying, smoking or having thoughts about enjoying the substance. So when the announcement to rescind Obama-era policy regarding legalized weed was passed down from the Justice Department at the beginning of the year, it didn’t come as a surprise to anyone—not even Lady Gaga.

In a statement sent to federal prosecutors nationwide, Sessions formally encouraged the prosecution of marijuana at a federal level in every state, a revision of the previous administration’s stance on legalized weed which was shared through the Cole Memo—a 2013 memorandum by the Justice Department that served as guidance for law enforcement and prosecutors in states opting to legalize weed.

In a nutshell, the memo reiterated that at a federal level, marijuana would continue to be classified and treated as a Schedule 1 drug (characterized as an illegal drug with a high potential of abuse, unsuitable for medical use), but discouraged enforcement of the drug at a federal level in states where it had been legalized. The memo also offered suggested priorities that state-legal law enforcement should focus on like preventing trafficking, and pot growing on public lands, and banning stoners from lighting up on federal property.

The legal cannabis industry met Sessions memo on “Marijuana Enforcement” with one simple question: why now?

The Rocky Mountain High 

On January 4, when Sessions’ memo hit the inboxes of law enforcement and prosecutors across the country, it came on the heels of November elections that resulted in four states passing ballot initiatives to legalize non-medical marijuana. Those publicly popular initiatives increased the number of states that have legalized recreational weed to nine and added another layer of growth in legal marijuana sales in the U.S. that topped $10 billion in 2017.

In fact, since Colorado voted yes on Amendment 64 in 2012, the state’s young cannabis industry has flourished under the guidance of the state government, most recently at the hands of Director of Marijuana Policy Mark Bolton. According to Bolton, the Office of the Governor has worked hard to build a strong and comprehensive regulatory system to monitor the marijuana industry in the state.

“While I would say our system is effective, we’re constantly in a state of evaluation and looking for ways to strengthen our approach and try to address any unintended consequences or abuses that have materialized,” said Bolton. He also added that Colorado relies on a collaborative relationship with the federal government to effectively regulate marijuana in the state.

While Bolton oversees the 12 agencies that have a role in legalized weed in Colorado, he also serves as the point person between the state and federal governments on marijuana issues. But perhaps the most rewarding aspect of Bolton’s gig is doling out a huge chunk of Colorado’s “pot tax” back into the state. In 2017, Colorado collected $247,368,473 in total revenue from the state’s medical and retail marijuana tax and fee collections.

Since it’s a heavily regulated industry, there are many layers of taxation on weed. There’s an excise tax on growers selling to retail shops; there’s a state sales tax, a state retail marijuana sales tax and in the majority of cities where retail or medical marijuana is sold, a local and special districts tax. It seems like a heavy price to pay for a little sticky icky, but the state is putting that tax revenue to good use.

At a state level, the first $40 million collected from the wholesale tax on pot is dedicated entirely to schools—yep, the same schools that only a few decades ago included a “Say No to Drugs” program taught by a cartoon bloodhound. That money is allocated to BEST—a program that funds competitive grants to school districts, school boards, charter schools and other school-related programs. Any tax revenue collected above the $40 million mark goes to a public school fund, and that number is generally in the millions. A portion of pot taxes also go to the Marijuana Tax Cash Fund which is used for drug regulation, enforcement, education, treatment and, most importantly for pot-friendly communities all over the state, ten percent of the gross revenue of marijuana sales tax is distributed to local governments overseeing recreational or medical marijuana sales in their cities.

Pot for Potholes

In Manitou Springs, the small town at the base of Pikes Peak, that windfall equates to a giant boost to the town’s Urban Renewal Authority budget. A town that boasts just over 5,300 residents, Manitou Springs is home to two recreational dispensaries along Highway 24—the city’s main travel vein that leads to the base of one of the state’s most popular fourteeners. Maggie’s Farm opened up shop first in 2010, followed by Emerald Fields in 2015. City-imposed sales tax revenue from the two shops has helped the city’s Urban Renewal Authority grow its budget from $100,000 to $2.5 million.

The increase in spending funds has allowed the city to focus on projects that improve the community, attract more visitors and boost the tourism economy in the tourism-driven town. Board members of the organization voted to allocate $1 million towards attracting more businesses to the downtown area and community improvement projects.

In southern Colorado, the town of Trinidad (population 8,200) has a new look since the legalization of marijuana. Once a nearly forgotten gas stop on the state line, Trinidad is now reaping the rewards of its location just 11 miles from New Mexico—a state that has yet to legalize marijuana. The once bustling coal mining town along the Santa Fe Trail had dwindled into a dilapidated cityscape dotted with abandoned buildings and rundown structures—that is until a dispensary moved into town in 2014.

Today, the city is home to 16 dispensaries and some recent much-needed upgrades throughout the town. Along with replacing the city’s 140-year-old brick streets, the local government also used the nearly $1 million in revenue taxes from recreational marijuana sales to purchase a new fire truck and a handful of eyesore buildings in the downtown area with the intention of transforming them into living spaces and art galleries.

Trinidad and  Manitou Springs are not the only two local governments in the state of Colorado benefiting from tax revenue from dispensaries. Any city where a dispensary operates in the state will collect a portion of the gross revenue of marijuana sales tax. In fact, the more dispensaries that operate within a city, the larger the chunk of money the local government will receive, which means with approximately 150 legal dispensaries in operation, Denver’s feeling the love. The state’s capital also has a booming cannabis tourism scene. Anyone visiting the city can participate in a variety of marijuana-themed activities including dispensary tours, weed-and-food pairings, puff-and-paint classes and weed-focused vacation packages. Guests can even book a room a the Bud and Breakfast—a 420-friendly lodging accommodation in the city that advertises “wake and bake breakfasts,” “munchies + beer and wine all day,” and, you guessed it, a happy hour that kicks off at 4:20 every day with snacks and the “freedom to consume whatever recreational marijuana products you desire.”

Bum Session

Even though the industry as a whole is booming, it’s still getting on its feet and far from perfect. Bolton remains hopeful for a thriving cannabis future in the era of Jeff Sessions, but he continues to closely monitor the impact of the attorney general’s memo on the state’s marijuana industry.

“A fear that we have is that we put a ton of time and effort into trying to help businesses establish banking relationships, because that has been an obvious challenge for the industry as long as it’s been operable here in Colorado,” Bolton said. “One fear would be that banks would either freeze the number of accounts they’re offering, stop offering accounts or start canceling accounts, which would drive the industry back to a cash business. And I don’t think that’s a desirable outcome from anybody’s prospective.”

Although Sessions’ announcement has sparked a buzz throughout Colorado, Bolton says it won’t dissuade state officials from continuing to focus on putting better systems in place to continue to regulate the industry.

“Our focus is going to be continuing to demonstrate the strength of our regulatory system, the fact that it’s a model for the rest of the country, and then trying to help businesses maintain compliance,” he said. “This certainly isn’t a time to fall out of compliance with state law.”

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