The Pueblo Chieftan

Medical licensing for recreational pot shops a mere formality

CHIEFTAIN ILLUSTRATION/JENNIFER TATE
This illustration show the approximate locations of medicinal and recreational marijuana dispensaries, as well as separate marijuana grow facilities in Pueblo County.
CHIEFTAIN ILLUSTRATION/JENNIFER TATE This illustration show the approximate locations of medicinal and recreational marijuana dispensaries, as well as separate marijuana grow facilities in Pueblo County.

On Wednesday, the Pueblo County Board of Commissioners will take up four different items related to the growth and sale of marijuana in the county, including medical dispensaries that, if approved, will be eligible to apply to sell recreational marijuana.

State law requires that folks looking to get into the recreational marijuana business must first be licensed under the medical rules, both by the state and locally.

But, other than additional fees, that’s about as far as things go, said Anita Garcia, marijuana licensing clerk with Pueblo County.

“The state law says they have to be a medical operators, but it doesn’t designate a specific amount of time that they have to be operators,” Garcia said.

Garcia said one of the stores hoping for approval Wednesday plans on almost immediately converting its entire operation to recreational, so securing the medical license is just a first, necessary step in the process.

The requirements and regulations for both the state and county licenses are virtually the same and a store can’t open without both.

Stores also are required to have a grow operation of their own. Some grow on site, while others grow elsewhere.

Currently, the number of licenses either approved or pending before the county is 17.

Of those, just five have completed their applications for retail sales and just two have been open since Jan 1, when retail stores were allowed to start selling marijuana.

The county has capped the number of retail licenses at 10 through 2014, but more opportunities may open up after 2015.

County Commissioner Sal Pace, who has been the lead commissioner on the marijuana industry, said he doesn’t expect the county to keep the cap in place.

Pace said he believes the cap will go away for three reasons.

First, because he believes in the free market. But Pace also said the market will take care of itself.

“I don’t expect a proliferation when the market shakes itself out and other communities start to license,” Pace said by message Friday.

Finally, Pace said the county’s zoning will play a big part in keeping the numbers relatively low.

Many of the stores and associated grow houses are located within a single area in Pueblo West, a function of the restrictive zoning in place in the county.

Marijuana businesses are allowed only on property zoned B-4, business class zoning a step below industrial uses.

Pace said the limited properties available and landlords who may be squeamish about the business will serve as a third check to uncontrolled retail pot growth.

Pueblo County is hoping to see growth in its sales tax revenues, however.

County Clerk and Recorder Gilbert “Bo” Ortiz said he’s working on a system to collect sales taxes from stores on a monthly basis, though it isn’t in place yet.

The county charges two types of sales tax on the purchase of marijuana.

Pueblo County levies a 1 percent tax on all items sold within the county, including pot, then adds a 3.5 percent tax specifically on all marijuana sold here.

The state also charges a 2.9 percent tax on any item sold in Colorado and another 10 percent tax on marijuana.

Fifteen percent of the state’s collection on Marijuana sales is returned to the county.

There also is a 15-percent excise tax levied on products sold in stores but not manufactured or grown there.

Garcia said 30 percent of a store’s inventory can come from outside grows and the excise tax also is levied on marijuana-infused products such as baked goods and candies.

Retailers typically pay the excise tax when they order products to sell in their sore and the tax is rolled into the price of the items.

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