Fruita eyes sales tax on medical marijuana

The city of Fruita may ask voters next spring to approve a 5 percent sales tax on medical marijuana, a move that would give city officials additional revenue they say they need to help pay for enforcement and regulation of the growing industry.

The City Council will hold a hearing Jan. 19 for public comment and is expected to decide sometime after that hearing whether to put a measure on the April 6 municipal ballot.

The tax on medical marijuana, products made with medical marijuana and medical marijuana paraphernalia would be tacked onto the city’s existing 3 percent sales tax. The tax would not affect any nonmarijuana products sold at dispensaries.

City officials say they don’t know how much money the tax would generate because they don’t know how many dispensaries will open in Fruita. None have set up shop so far, although the city has received some inquiries, City Manager Clint Kinney said.

The city recently adopted a set of regulations that, among other things, requires dispensary owners to undergo background checks and restricts dispensary locations to certain commercial and industrial zone districts. A moratorium on business licenses for dispensaries expired Dec. 21.

Mayor Ken Henry said any medical marijuana shops that open in Fruita will require monitoring by police, community development and other city departments to ensure they are following city codes and state laws.

“Part of the thinking was it was going to require some additional demands on the city, and this is a way to recover some of those costs,” he said.

Henry said some medical marijuana dispensary owners operating in the Grand Valley have expressed concern to council members about being targeted by criminals. A shop in Grand Junction was burglarized twice this fall.

The medical marijuana industry has blossomed in Colorado and the Grand Valley this year, leaving municipalities and counties scurrying to adopt regulations.

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