This Colorado city declined to allow pot sales. Now it’s having second thoughts

COLORADO SPRINGS, Colo. — At the two malls in town you can buy key chains and Christmas ornaments shaped like marijuana leaves. Along a downtown shopping corridor, paintings of cannabis plants grace storefront windows.

Even Kmart stocks its shelves with T-shirts and mugs decorated with the signature green leaf and “Colorado est. 2012” — the year the state legalized recreational marijuana.

But that is the one pot product you can’t buy in Colorado Springs.

When Coloradans voted overwhelmingly to make non-medical marijuana legal, they left it up to cities whether to allow sales. Colorado Springs, home to five military bases and known for its conservative politics and religious values, blocked recreational cannabis sales. Now some in town want to change that, saying the state’s second largest city is missing out on sales taxes that are enriching cities across Colorado.

Similar debates are already happening in cities in California, Maine, Massachusetts and Nevada — states that passed legalization measures last year. Recently, the Los Angeles City Council, eager to pull in new tax revenue, crafted rules for recreational marijuana sales that will begin in January.

In Colorado, one of the first states to legalize recreational marijuana, just a handful of cities still forbid such sales. The Colorado Springs City Council enacted its ban in 2013, but Denver, suburbs and mountain ski towns rushed to implement sales and quickly saw the boon.

Last year, Colorado pot sales and fees produced nearly $200 million in tax revenue. In Denver, the city raked in about $24 million, which, among other things, was used to build a recreation center near downtown. Aurora, a Denver suburb, brought in about $16 million and used the money to help fund projects to help homeless people.

And in Manitou Springs, a community of about 5,300 known for its eclectic charm — it has a weekly Wiccan meetup — pot money has revitalized the town.

For nearly 12 years, a project to revamp the main thoroughfare stagnated. Now, marijuana taxes are funding new bike paths, decorative sidewalks and lighting. Major improvements were already underway thanks to a voter-approved road initiative, but money from pot made the extra amenities and aesthetic improvements possible.

The town’s two dispensaries last year generated $1 million in taxes — some of that from the pockets of residents from neighboring Colorado Springs. In 2016, Manitou Springs’ budget was about $8.3 million. And this year, it increased to about $10.4 million, thanks, in part, to pot.

“It’s brought new life to this town,” Farley McDonough, president of the Manitou Springs Urban Renewal Authority, said. “In many ways, it’s good Colorado Springs does not have sales.”

Marcy Morrison, a former Manitou Springs mayor, staunchly opposed legalizing pot back in 2012.

“I thought it was terrible,” she said. “But really this has been a learning experience. Legal pot has helped the city.”

For Colorado Springs City Council President Richard Skorman, it’s frustrating to watch the cash flow to other cities — “sales tax leakage,” he calls it.

“People are going all over this state to buy marijuana and it’s outrageous,” Skorman said. “It’s already legal. It’s in the state’s Constitution.”

Skorman is teaming with a local group, Citizens for Safer Neighborhoods, which is working to get a legal pot initiative on the local ballot in November. The group must gather 20,000 signatures by the summer to place it before voters in this city of 465,100.

Safer Neighborhoods commissioned an economic study by a University of Denver professor that estimated Colorado Springs would make an additional $20 million in taxes — money that supporters say could, among other things, help repair roads and hire more police officers.

A large portion of that would come from medicinal marijuana shops looking to sell recreational pot. According to the study, if all 356 licensed medical marijuana establishments in the city were to pay a licensing fee of $7,500 for recreational pot, Colorado Springs would collect about $2.6 million.

Tom Scudder, who is a member of Safer Neighborhoods, said his two marijuana shops illustrate some benefits, and unfulfilled potential, of legalized pot.

At Rocky Road Aurora, which sells recreational and medical weed, the line of people waiting to buy strains of Agent Orange sativa and Lemon OG indica loops around stanchions and a Christmas tree in the lobby. The walls of the bustling shop are decorated with hats and T-shirts emblazoned with the company’s name, and near the checkout counter are marijuana themed greeting cards.

An hour away back in Colorado Springs, Scudder runs a medical pot dispensary, A Wellness Centers, out of a small office space in a low-slung, cinder-block strip mall that looks like an aging motel. Inside, the hum of a dusty air-conditioning unit attached to the paint-peeling walls fills the silence of the often empty shop.

“Not having legal sales here is wrecking my business and hurting this community,” Scudder said in the Colorado Springs dispensary.

But his effort faces strong pushback from a prominent local voice: Republican Mayor John Suthers, who was the state’s attorney general when Coloradans passed legal weed.

“I may well be behind the times, some have called me a ‘drug war dinosaur,’ but I remain absolutely convinced it’s terrible public policy,” Suthers said. “People should not be getting high for fun. … We’re creating a generation of young marijuana users who will go on to become lifelong drug abusers.”

Suthers often points out that local law enforcement supports his view. He also notes past reports from the Substance Abuse and Mental Health Services Administration that showed an uptick in teen marijuana use in Colorado since voters passed legal pot. (A report, however, released in December by the agency found that the current rate of marijuana use among Colorado 12- to 17-year-olds dropped from 11% in 2014 to 9% in 2016.)

And cutting off the black market? That’s wishful thinking, Suthers said.

He cited a recent example in Denver, where grand jurors indicted 62 people in a marijuana-trafficking organization that amassed millions of dollars by illegally growing pot and selling it out of state. It was among the largest crackdowns on illegal growing since marijuana sales went into effect.

And Suthers says the city’s conservative values and image are at stake. Not since Lyndon B. Johnson was on the ballot in 1964 has a Democratic presidential candidate won here, and the community recently faced backlash for opposing needle-exchange programs embraced throughout much of Colorado amid the country’s opioid crisis.

When asked what he would do with increased revenue from marijuana taxes should it become legal here, Suthers demurred, saying the notion the city would “fund essential government services with proceeds from drug sales in violation of federal law is irresponsible.”

“For me, it’s largely a moral issue,” he said.

On a recent evening, a trickle of customers arrived at Scudder’s Colorado Springs shop, which he admits could use a renovation. He decided a while back to hold off on putting in new floors and walls until legal sales are implemented. And he never thought it would take this long.

“We are literally allowing money to walk right out of the city,” Scudder said. “For what? Because of some so-called ‘conservative values.’”

Chris Webb, 45, who uses marijuana for anxiety, came into the shop to buy a quarter ounce of Flo sativa. To him, the pushback against recreational sales has been surprising.

“I’ve lived in this city most of my life,” he said. “We could use the money to fix some of these damn potholes.”

As the shop’s employee — the bud tender — handed Webb his change, her face lit up in agreement.

“I hit one of those the other day,” she said.