Parachute gives green light to rec marijuana
PARACHUTE — With a single vote Thursday, town trustees repealed a ban on recreational marijuana facilities and replaced it with an ordinance detailing rules for establishing marijuana businesses.
The 4-2 decision was made after virtually no public comment — although the dozen or so people in attendance were given the opportunity.
It also comes as the town continues to cope with declining sales tax revenue attributed to a weaker energy sector, which has long served as the economic backbone in the town of about 1,100.
Through May, the town had collected $347,300 in sales tax this year — $132,890 less than what was collected in the first five months of 2014.
Although he did not vote on the matter, Parachute Mayor Roy McClung said he wrestled with the issue leading up to the meeting in the event that he would have to cast a tie-breaking vote.
“Morally I’m against it,” he said. “But the moral issue that weighed on my mind is I was elected to do what’s best for the people. That includes making sure the town stays solvent.”
The ordinance passed Thursday sets a $5,000 application fee for each of the four types of recreational licenses now allowed in the town, which include cultivation, testing and manufacturing facilities, as well as retail stores. Applicants will be required to renew each license annually at a cost of $2,000.
Attorney Jeff Conklin told trustees the town looked at other communities to try and determine an appropriate fee structure. Trustees can adjust the fees in the future by resolution — which is simpler than adjusting the fees by ordinance.
If trustees decide to establish an added sale or excise tax on marijuana, they would have to put it on the ballot for voters to decide, Conklin said.
The ordinance includes a provision allowing the board to use up to 1 percent of the town’s 3.75 percent sales tax collected from retail marijuana to address marijuana use in the town’s schools.
McClung indicated that the money could be used for issues other than marijuana, but Garfield County School District 16 would have to formally request the money from trustees.
The provision does not require that the town allocate the money to the school district. As McClung noted, the budget may be too tight some years.
Marijuana businesses cannot be located within 500 feet of a school or within 150 feet of another recreational marijuana business. However, the ordinance does not cap the number of licenses allowed. Trustee Tom Rugaard and Mayor Pro Tem Juanita Williams rejected the idea of setting a cap on the number of licenses approved by the town. Instead, they opted to allow the market and the distance requirements in the ordinance to dictate the number of businesses in town.
“I think that’s kind of like picking the winners and losers,” Williams said.
The fee schedule and terms approved Thursday are more than fair, said Mark Smith, CEO of Green Cross Colorado. Smith, whose company hopes to establish a recreational store and manufacturing kitchen and eventually a grow facility in Parachute, welcomed the news and said he appreciated the “thoughtful” conversation the trustees engaged in before voting on the matter.
“I’m very impressed,” he said. “They were very professional and very thorough.”
While Smith said he would like to file the necessary permits and applications as soon as possible, he also wants to do it at a pace that the town is comfortable with.
“You definitely don’t want to be a bull in a China shop.”
But that is what the passage of the ordinance feels like, said Trustee Norman Feck, one of the two who voted against the measure.
“It’s going to degrade the town like it degrades everywhere else,” Feck said of the marijuana industry. Parachute has been an enclave for people who do not want to live in neighboring cities and towns that already have recreational marijuana, he added.
“It’s not the type of environment I want to raise my kids in,” Feck said.
Trustee Daniel Manzanares, who was appointed to the board in May, joined Feck in voting against the ordinance.
“I was doing what I believed was in the best interest for the town … Certainly there are some benefits for the town, but there’s risks too,” he said.
One of the more surprising votes came from Rugaard, who joined Williams and fellow trustees John Losche and Tim Olk in voting for the ordinance.
In past meetings, Rugaard has spoken passionately about how drug abuse impacted his family. In May he said he was trying to weigh the expected economic benefits against the moral issues, but added that the door was still open. He declined to comment Thursday after leaving the meeting early following the vote on the marijuana ordinance.
Some people will say the town sold out its morals for money, McClung said, “But it’s hard to turn your nose up when you don’t have anything coming through the door.”
Feck questioned why Parachute could not recruit a different business, such as a hotel or McDonald’s.
The town is working on a economic development strategy, but any large-scale projects — such as recruiting a supermarket to the town — would take several years to get off the ground, Town Manager Stuart McArthur previously told the board. The town needs something more immediate, and in addition to Green Cross Colorado, McArthur said he has received several other requests from marijuana businesses hoping to locate in Parachute.
If the town were receiving requests from other businesses and industries, the marijuana issue likely would not have even made it to the board, McClung said Thursday.
Conservative projections that Smith presented to trustees in May estimate $31,500 in sales tax revenue during Green Cross Colorado’s first full year of business in Parachute, with projected growth each year in the facility’s first five years of business. The company also expects to create 27 full-time positions paying anywhere from $12-$22 per hour, plus benefits.
“It’s good news for everyone,” Smith said of Thursday’s decision.
Feck sees it differently, and said there are probably plenty of Parachute residents who share similar feelings. When asked why none of the people in the audience decided to comment on the issue during the meeting, he said people tend to lose their voice when the time for public comment comes.
It certainly was not due to a lack of opportunity, both Feck and McClung said. The town requested public comment when it sent out water bills, according to McClung.
He and Smith gave similar explanations as to why there was no public comment either for or against the ordinance.
“I think the shock of marijuana is over,” Smith said.
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Current Basalt officials say the town government has violated the Colorado Taxpayers’ Bill of Right by increasing the property tax mill levy over the prior years 10 times since the mid-2000s. Two former mayors contend the mill levy could be adjusted in any given year as long as it didn’t exceed the mill levy in 1994. It’s a $2 million question.