An attempt by some state lawmakers to repeal Colorado’s historic marijuana legalization amendment if voters don’t approve a 30 percent tax to finance oversight of the industry is unconstitutional, according to lawyers for a group of advocates fighting the proposal.
In a three-page memo, attorney Ed Ramey wrote that tying a repeal of Amendment 64 to voters’ failure to pass a tax measure violates a constitutional provision that in odd-numbered years, only matters of finance and taxes can be referred to the ballot.
Repealing a constitutional amendment is not a financial issue and “would likely face post-adoption invalidation by the courts,” he wrote.
The repeal attempt, which has yet to be introduced, came to light last week as lawmakers struggled with how to tax recreational marijuana.
Colorado voters must approve all new taxes. If they reject the proposed 15 percent excise tax and 15 percent special sales tax, the state must fund industry oversight from the General Fund rather than through marijuana-generated tax revenue.
Opinions vary as to how appropriate the taxes will be — since no state has taxed and regulated marijuana, there is no data on market or pricing expectations.
A recent report by Colorado State University concluded that even the 30 percent tax wouldn’t be sufficient to cover regulatory costs.
But supporters of Amendment 64 say a 15 percent special sales tax is too high. They point to a recent poll that showed 77 percent of respondents would support a 10 percent special sales tax.
Republicans are in favor of the lower rate, but House Democrats tried late last week to amend the tax bill to allow for future legislatures to raise it to a maximum of 15 percent.
At least one lawmaker believes this to be just a ploy to gain favor with voters, with the intent to then raise the rate as soon as the next session begins.
“It’ll be set at 10 percent for one day, then after Jan. 1, the legislature after that one day will have the ability to raise this back up to 15,” Republican Rep. Brian DelGrosso is quoted as saying in the Colorado Observer.
Taxing pot is just one marijuana legalization issue among many that lawmakers must grapple with before the session ends May 8. They must debate and vote on regulations for everything from seed to sale or face the prospect of a costly special session continuing into the summer if they don’t meet the deadline.
An attempt to craft a ballot question to repeal Amendment 64 has an even steeper challenge, requiring two-thirds of each Democratic-controlled legislative chamber before it’s referred to the Secretary of State, who must certify it before it appears on the ballot.
That too could come under challenge, Ramey writes, noting that the constitutional conflicts he outlined in his memo would open the door to opponents filing an injunction.
Amendment 64 supporters said the legal opinion strengthens their argument that an attempt to repeal marijuana legalization would be “ill-considered,” as proponent Eric Sederberg said in a statement.
“The legislature shouldn’t be playing games with these important new excise and sales taxes by tying them to a separate vote on repeal of Amendment 64,” he said. “This would only encourage opponents of Amendment 64 to vote no on the tax in the hope of repeal. In fact, the only possible way a marijuana tax measure will fail is if it is done as part of such a repeal scheme.”
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