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article imageWestern Colorado town approves tax on medical marijuana

By Lynn Herrmann     Apr 7, 2010 in Politics
Fruita - The small town of Fruita is Colorado’s first town to approve a city tax on medical marijuana, even though the town has no dispensaries.
Located in western Colorado between Grand Junction and the Utah border, Fruita has a population of about 11,000. voters approved the measure on Tuesday by an unofficial 1,533 to 936 vote. The town had one pending application to sell medical marijuana when the proposal was placed on the ballot, but has since been withdrawn.
Fruita’s new 5 percent tax will be placed on marijuana paraphernalia and products made with medical marijuana. The tax will be used to cover costs associated with regulating any dispensaries the town may eventually approve, and will be added to the town’s existing 3 percent sales tax, according to a report in the Grand Junction Sentinel.
Fruita city officials estimate the new tax will generate little more than $100,000 in additional revenue which would be used for enforcement and regulation of the dispensaries. City Manager Clint Kinney said most of the measure’s support came either from advocates who felt the tax would legitimize the industry or citizens who wanted a higher tax on the industry.
The state approved an amendment to its constitution in the 2000 general election allowing medical use of marijuana. Due to a high volume of applications, Colorado’s Department of Public Health and Environment has modified its process for medical marijuana registry procedures.
Marijuana dispensaries in the state already pay a 2.9 percent state sales tax, although state officials are unsure how much tax revenue comes from the sale of marijuana because the dispensaries are not regulated.
While marijuana possession has been decriminalized in Denver and Breckenridge, the measures are considered symbolic. Pot possession in the state is still a crime except for those with an approved medical clearance for its possession.
Among Fruita’s more popular events are Dinosaur Days, the Fruita Fall Fest, the Fat Tire Festival, and the “Mike the Headless Chicken” Festival.
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