Cannabis sales surge in Breckenridge

Breck main street reducedWill Breckenridge rake in $1 million

in cannabis sales this year?

by Allen Best

Will sales and excise taxes produce $1 million for Breckenridge during the first year of sales of marijuana for recreational use?

They will if the rest of the year are as good as January.

In comparison, taxes on medical marijuana last year totaled $120,000.

John Warner, mayor of Breckenridge, is skeptical the town will hit the $1 million mark. He’s more cautiously thinking $400,000 to $500,000. “You just can’t imagine all the money adding up to what January did,” he says.

Breckenridge receives almost 9.5 percent of every sale of both medical and recreational marijuana through its regular sales tax (2.5 percent), excise tax (5 percent) and share of the county sales tax (1.93 percent).

For recreational sales, the town also gets 0.015 percent of the state excise tax. Colorado levies a 10 percent state tax on all retail sales and a 15 percent excise tax on wholesale in addition to the normal 2.9 percent sales tax. In Denver, taxes amount to 25 percent of a marijuana transaction, says the Wall Street Journal.

Will tourists try to buy marijuana on the local, underground market to avoid the high taxes? Breckenridge officials think tourists are unlikely to spend time trying to cultivate local suppliers. They’ll just pay the taxes.

Breckenridge was one of the few Colorado mountain towns to have stores licensed and ready to operate when the state’s constitutional door opened on Jan. 1. The next day, Warner went to one of the stores. It had huge lines, “very orderly,” he says.

What also stood out was this: “Breckenridge certainly has more people than when I moved here 33 years ago, but I didn’t recognize a single person,” he says.

“What we’re hearing is that 80 to 90 percent of their customers have been visitors and didn’t have a local address,” says Tim Gagen, the Breckenridge town manager.

Problems have been almost non-existent.

“Local shops have been great about telling people they can’t light up a joint and go walking down the street,” says Gagen. “Not many tickets have been issued.”

Where will visitors smoke?

Steamboat Today wondered that question in January. It’s still illegal to do so in public, including forest lands and ski slopes, and most hotel rooms ban smoking. No bars for cannabis have been authorized, unlike that for imbibing of alcohol.

One answer: You can eat THC-infused products.

Who are the customers? Surprising to some, perhaps, many of Breck’s buyers are baby boomers, especially those now in their 50s and 60s, who smoked when they were young, in the 1970s.

Warner, 63, tells the story of the second time he was in a dispensary during January and encountering customers his age. They wanted something that would give them a buzz but not flatten them. In other words, kind of like what they smoked when they were in their 20s.

“I have just the thing for you,” said the proprietor.

Breckenridge has five dispensaries, but one plans to continue selling medical marijuana, catching those who are between 18 and 21 years of age who have cards certifying to medical needs. Recreational marijuana can only be sold to those above 21.

Many locals appear to be growing their own, says Gagen. Colorado’s constitutional amendment allows growing several plants for personal use.

Gagen says the town plans to allocate a portion of its bonanza of tax revenues from marijuana sales to the hiring of an additional police officer, to ensure that individual grow operations are not impacting neighbors.

Voters in Breckenridge, when authorizing sales, earmarked portions of the money for substance abuse programs. Last year, $40,000 was given to the Mind Springs Health detoxification program

Only one of the five stores is located in Breckenridge’s main shopping area, the downtown Main Street area, and it will be required to relocate to a less-visible location after its lease ends in October. The others are on Airport Road, easily accessible from public buses but more of a back-shop area.

This story was first published in the Feb. 17, 2014, issue of Mountain Town News. An e-zine, it is distributed to subscribers. Cost is $45 per year.


About Allen Best

Allen Best is a Colorado-based journalist. He publishes a subscription-based e-zine called Mountain Town News, portions of which are published on the website of the same name, and also writes for a variety of newspapers and magazines.
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