Marijuana sales tax declines in Parachute
Parachute once garnered coverage from the Washington Post and Good Morning America when it opened the nation’s first drive-through weed window. It also has the highest concentration of cannabis dispensaries per capita in all of Garfield County.
Parachute’s notable ambrosia of buds, however, is actually experiencing a bit of a lull. Tax revenue derived from marijuana sales has dropped compared to previous years. City numbers show Parachute’s cannabis tax dropped from $63,389 in June 2020 to $36,218 in June 2022.
Parachute Town Manager Travis Elliot said the town is seeing a pretty steady decline in monthly marijuana revenue.
“What I’ve heard anecdotally from operators and cultivators is that the market was ramping up and we saw a big spike in sales in 2020 in the midst of the pandemic,” Elliot said. “The good old balance of supply and demand forced prices to drop.”
While housing markets, gas prices and overall inflation continue to cause concern among Garfield County consumers, the overall price per pound of cannabis flower has dropped considerably.
“I think everyone’s kind of predicting that as more and more stores open, the share of the market would spread out,” Elliot said. “I’ve also heard that the price of marijuana has dropped significantly.”
Colorado Department of Revenue data lists the current average market rate per pound of marijuana at $709. The price per pound in Colorado on Jan. 1, 2021, was $1,721 — the highest price point over the past five years.
Parachute charges a 2.75% sales tax, which applies to all goods sold in the municipality, including marijuana. Money accrued from marijuana sales either goes straight into the town’s general fund or the local school district. For instance, Parachute received $555,230 in 2021 from marijuana revenue alone. Of that, the town allocated between $5,000 and $6,000 to Garfield 16.
While the town of Parachute is still in good standing financially, Elliot said it’s keeping an eye on how this revenue stream affects future budgets.
“We’re not making any decisions as of yet,” he said. “We’re just monitoring the budget currently in 2023.”
- Parachute: 7 dispensaries
- Rifle: 3 dispensaries
- Silt: 2 dispensaries
- New Castle: 0 dispensaries
- Glenwood Springs: 6 dispensaries
- Carbondale: 5 dispensaries
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