Ashland is taking steps to ensure it's prepared for medical marijuana to become a presence in the city. On March 19, the state signed into law Senate Bill 1531, which allows local governments to impose their own regulations on medical marijuana dispensaries in addition to state regulations. Ashland set a moratorium on dispensaries in the city until the city council could determine these regulations. The moratorium was lifted on Aug. 5 when the council approved ordinances that determined operating regulations for dispensaries and taxes for medical and recreational marijuana (should voters approve recreational marijuana in November). The ordinances take effect Sept. 4. One dispensary, Siskiyou Medical Supply, reopened last week.
What the issue is
While the proposed city tax ordinance set tax rates on both medical and recreational marijuana sales (which would be allowed if a ballot initiative is approved by voters in November), city council members decided to set tax rates by council resolution instead, so the council would not have to go through the formal ordinance process to set and change tax rates. The proposed rates were 5 percent for medical sales and 10 percent for recreational sales.
"We polled cities in Colorado to determine these rates," City Administrator Dave Kanner said during Tuesday's city council meeting. "There's no real standard yet, but these seem to be the going rates."
The five councilors present at Tuesday's meeting unanimously approved setting the recreational tax rate at 10 percent. The medical rate proved more controversial.
Councilor Greg Lemhouse opposed the tax on medical marijuana, as did Councilor Pam Marsh.
"Recreational marijuana would be a luxury item," Marsh said. "Medical marijuana is not. A tax on medical marijuana would be punitive."
Councilors Carol Voisin and Rich Rosenthal supported a tax on medical use, citing the fact that medical marijuana is not a prescription medication, but something a doctor can recommend.
Councilor Michael Morris pointed out the uncertainty that made this decision difficult.
"There is that percentage of users who use medical marijuana for not-quite medical purposes," he said. "But there are the purely medical users out there."
A motion to set tax medical marijuana was opposed by Councilors Lemhouse, Marsh and Morris, which effectively set the tax rate in the resolution at 0 percent.
While marijuana tax rates are at 0 percent for medical and 10 percent for recreational, these can be changed in the future if necessary.
"We have a construct for these taxes now," Marsh said.
While there is uncertainty about whether these rates may get locked in should recreational use be legalized (the measure includes limits on local agencies powers to tax recreational sales), Lemhouse isn't worried.
"I would be hard pressed to see legislature telling cities how to tax," he said.