Our view: City has created a marijuana monopoly | SteamboatToday.com

Our view: City has created a marijuana monopoly

At issue:

The city of Steamboat Springs limits the number of marijuana licenses to three.

Our view:

It’s time the city consider lifting the limit and letting the free market determine pot shop numbers or at least create a legal system for putting the licenses out to bid.

Editorial board

Suzanne Schlicht, publisher and COO

Lisa Schlichtman, editor

Jim Patterson, assistant editor

Tom Ross, reporter

Dennis Fisher, community representative

Ed MacArthur, community representative

Enimie Reumaux, community representative

— The second anniversary of recreational pot sales in Steamboat Springs coincided with the city’s release of a more detailed monthly sales tax report that now includes a breakdown of marijuana revenue. And with that new information in mind, we think it’s time for council to revisit the city’s existing marijuana ordinance.

In 2015, the city’s three pot shops had combined sales totaling more than $9.1 million — a 35 percent increase above the previous year — and those pot sales generated $366,455 in tax revenue for the city of Steamboat Springs.

Our view:

It’s time the city consider lifting the limit and letting the free market determine pot shop numbers or at least create a legal system for putting the licenses out to bid.

According to the latest sales tax report from January, the sale of both medical and recreational marijuana generated $39,977 in tax revenue last month, and even more surprising than the volume of pot bought and sold in Steamboat was the fact the tax revenue generated by local pot shops represented slightly more than half of the sales tax collected from local liquor store sales.

Currently, there are 101 liquor store licenses issued by the city compared to a limit of three licenses for marijuana dispensaries.

In our opinion, the city has created a monopoly for a few businesses by limiting the number of pot shops to three. This seems undemocratic, and we think the city should allow the free market to determine the number of pot shops in town through supply and demand.

Amendment 64, which local voters overwhelmingly approved, allows for marijuana to be treated the same as alcohol. The city used this reasoning when it decided to start releasing marijuana sales tax information last month, and we want to see them apply the same logic to their limit on pot shops.

The city does not currently limit the number of liquor licenses it issues, and we don’t think marijuana store licenses should be treated any differently. As we editorialized in September 2013, we encourage City Council to revisit their marijuana regulations and align those rules with those that govern the sale of alcohol.

We understand city leaders are worried that pot shops would pop up on every corner if the ordinance were changed, but we think the free market economy would naturally limit the number of pot shops that operate at a profit through costs of operation, competition and a finite consumer demand for the product.

If the city is going to arbitrarily limit the number of pot shops to three, maybe it should solicit bids and award licenses to the top bidders. By limiting the number of licenses, the city has created an unfair advantage for three business owners, who are not paying a price for the extreme protection they are receiving.

Now that the city and the public can clearly track the amount of sales the pot industry is generating locally, we also think it’s a good time for the city to consider imposing an additional tax on recreational pot sales to generate more revenue to benefit the community and support core city services, such as transportation, law enforcement and parks and recreation.

As the first state to legalize recreational marijuana, Colorado’s foray into this new world has been labeled as a “great experiment,” and the experience isn’t any different at the local level.

We’ve watched as Routt County has stayed the course and continued its moratorium on recreational pot shops. We’ve reported on Oak Creek’s burgeoning marijuana industry, which has sprung up due to the town council’s decision not to enforce limits on the number of pot-related businesses in town, and most recently, Hayden voters defeated a ballot issue that would have derailed plans for the town’s first marijuana grow operation, which is now moving forward. Those same voters approved a 7.5 percent tax on wholesale marijuana that is predicted to generate $143,500 in new tax revenue for the town.

It’s been an interesting two years, and as the marijuana industry evolves, we think local governments are wise to revisit their views on the issue; we think the two-year mark is the perfect time to do that.

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