Pueblo City Council brings back marijuana tax at one of highest rates in Colorado

Just a few months after Pueblo City Council voted to slash the city’s marijuana excise tax, some newly elected council officials voted Monday evening to bring it back at a higher rate than ever before.

Marijuana growers within the city will now pay a 10% tax on cannabis grown within city limits, which is one of the highest municipal excise taxes on weed in the state of Colorado.

The councilors who supported bringing back the tax have said the city does not have an obligation to help struggling cannabis businesses in Pueblo and that removing the tax would go against voters' intent. Others have said that lowering the tax could save local jobs.

Excise tax will be double original proposal

As initially introduced, the ordinance would've brought the city’s excise tax from 0% to 5%, which is the same rate as Pueblo County. The state of Colorado also collects a 15% excise tax.

Cannabis excise taxes are collected on unprocessed, wholesale marijuana — before consumers buy weed at dispensaries.

Some of the newest councilors on the dais were not around when council previously opted to lower the excise tax in December 2023, and so spearheaded bringing back the fee.

At-large Councilor Mark Aliff worked with Mayor Heather Graham’s office to introduce the ordinance and two of the newest officials supported an amendment to make the tax even higher.

Councilor Roger Gomez, whose district includes Bessemer and parts of the South Side, introduced an amendment to double the tax to 10%.

Per a ballot question from 2015, city council has the authority to tax anywhere between 0% and15% on cannabis grown within city limits. The tax was 8% from 2016 through 2023.

Gomez previously worked in law enforcement. He said that the potency of marijuana has changed over the past few decades and that the excise tax could be the “wrong vehicle to utilize” for economic development.

Councilor Joe Latino seconded Gomez’s motion to bring forth the amendment. Latino’s district includes the East Side and Belmont.

Latino said that he is opposed to recreational marijuana — but “medical is a whole other story” — and that the tax should be the same as in El Paso County, Colorado Springs and Denver.

However, Pueblo’s neighbors to the north in El Paso County and its county seat don’t allow commercial marijuana cultivation and the city of Denver doesn’t assess any marijuana excise taxes.

Marijuana industry rep: Price will be passed to consumers, black-market sales may increase

Former Pueblo County commissioner and state legislator Liane "Buffie" McFadyen, a spokesperson for The Spot 420 Dispensary in Pueblo, said that the excise tax not only affects cultivators but the entire industry.

"That price is going to be passed onto consumers," McFadyen said. "There's very little flexibility in the marketplace for increased cost as our market is being severely challenged," especially since New Mexico has legalized recreational sales, she said.

McFadyen said that not enough time has passed for businesses to assess the impact of lowered excise taxes, but the aftermath of bringing back the excise tax could lead to more illicit sales on the black market.

"I don't believe that's the intent of the city council, but it could be a consequence of raising the prices in a very weak market," McFadyen said.

How councilors voted on the amendment

Aliff, Gomez, Latino and Regina Maestri voted to increase the excise tax. Maestri and Graham, when she was still a city councilor, both opposed temporarily eliminating the excise tax in December 2023.

Councilors Dennis Flores, Sarah Martinez and Charles “Chuck” Hernandez voted against bringing back the excise tax on Monday.

City council heard three people speak in favor of the ordinance and one against it. All but one of the commenters have been frequent attendees at council meetings.

No representatives from the local marijuana industry gave public testimony.

Anna Lynn Winfrey covers politics at the Pueblo Chieftain. She can be reached at awinfrey@gannett.com. Please support local news at subscribe.chieftain.com.

This article originally appeared on The Pueblo Chieftain: Pueblo City Council brings back marijuana excise tax, raises it to 10%