Aurora ponders 1% marijuana tax hike to replace lost red-light camera revenues

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AURORA | City lawmakers are considering a 1 percent increase in local sales tax on retail marijuana to “backfill” programs that lost funding after Aurora voters ended the Photo Red Light program in 2018.

The proposal, being led by Councilwoman Angela Lawson, was presented at the city’s Amendment 64 Ad Hoc Committee along with two other cannabis and hemp-related bills on Friday.

Marijuana business owners at the meeting said the 1 percent increase, which would take the marijuana special sales tax rate from 4 percent to 5 percent, wouldn’t get passed on to consumers, but more likely would be felt by employees of the company in terms of pay or benefits.

City staff said raising the tax rate would bring in an estimated $1 million to the city each year, and even with the increase Aurora would still be below Denver’s tax rate of 5.5 percent and Commerce City, which taxes 7 percent.

With the new revenue, city documents estimate that programs and services that once received Photo Red Light funds — like Aurora Mental Health Center, Gateway Domestic Violence Services and Mile High Behavioral Healthcare — would no longer require budget reductions and some budgets could even be increased.

Starbuds owner Brian Ruden told the committee he’s opposed to the increase.

“Is 1 percent going to tip the scales? No. But if I don’t voice concerns now… there is a point where the equilibrium can tip where you’re giving more legs to the black market,” he said, suggesting that there’s a point where legal, regulated marijuana in Colorado would no longer be the affordable choice for consumers.

Other cannabis retail business representatives said Aurora is an attractive place for people across the metro region to buy marijuana because of the lower tax rate. 

Lawson said she wouldn’t propose any increase that would push Aurora over the tax rate of neighboring cities. Aurora city lawmakers can vote to increase the tax rate on retail marijuana without the approval of voters up to 10 percent.

The bill was recommended to be considered at a city council study session. After discussion there it could head to a floor vote.

Other proposed ordinances at the meeting would ban the public consumption of smokable hemp, which city officials say is difficult for police to distinguish from marijuana, ban sales to anyone under the age of 21, and establishing a hemp manufacturing license. 

“Once the hemp has been harvested, processing hemp is very similar to how marijuana is processed. Aurora is allowing hemp extraction businesses to operate and are being monitored by the Marijuana Enforcement Division. However, the interest in manufacturing hemp is growing. We have about seven projects pending, some to be quite large in scope,” according to city documents. 

Those projects are currently only required to obtain a general business license. A hemp manufacturing license would allow the city to regulate the industry like it does with marijuana manufacturers.