Tax deterring marijuana business in Hayden
Steamboat Springs — One of three groups hoping to open a marijuana grow facility in Hayden says a tax imposed by the town has created a roadblock.
“At the current excise tax, we are absolutely on hold,” developer Jon Peddie said. “We’re moving ahead and hopefully will come up with something that works for everyone.”
In January 2016, Hayden residents voted to impose a 7.5 percent tax on all marijuana that is grown in Hayden and then sold at wholesale to dispensaries.
“We have requested the town of Hayden reduce the excise tax,” said Peddie, who wants to build a 5,600-square-foot grow facility with his business partner Paul Franklin.
Franklin and Peddie developed the Valley View Business Park where the facility would be located.
The town of Hayden is hoping marijuana tax revenues will help shore up its finances, but Peddie said the increasing costs of opening a facility currently make it cost prohibitive. The profit margins are also shrinking.
Peddie said the wholesale cost of marijuana has dropped from $3,000 per pound a year ago to somewhere between $1,200 and $1,700. They would also have to compete with other grow businesses that are coming online.
He said before they spend several million dollars to build and outfit a building, they need to make sure the business is sustainable.
“You need to make sure it’s not a flash-in-the-pan industry,” Peddie said.
Peddie and Franklin sent a letter to the Hayden Town Council asking them to have a discussion about the excise tax.
Hayden Town Manager Mathew Mendisco said council members looked at taxes in other communities, and they decided not to lower the tax.
Two other groups that have gotten approvals to open grow facilities are not deterred by the tax.
“I would like to see it be less, but it’s not a deal breaker,” Rodney McGowen said.
McGowen said he thought he had financing secured in the fall to build the 5,600-square-foot facility in the industrial park, but it fell through. He still plans to move forward and hopes to have plants growing this year.
“It’s always money issues,” McGowen said. “You think you have it figured out, and then you don’t.”
The third group, Emerge Farms, could not be reached for comment.
McGowen and Mendisco said Emerge Farms is moving forward and retrofitting a 9,484-square-foot building.
“They’ll have plants there in the near future,” McGowen said.
To reach Matt Stensland, call 970-871-4247, email mstensland@SteamboatToday.com or follow him on Twitter @SBTStensland
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