Manitou Springs gets about half of its sales tax revenue from marijuana, and that’s a startling reality for the town’s administration looking to diversify.
Mayor Ken Jaray expressed concern about the marijuana industry accounting for so much of the city’s general sales tax revenue in a Facebook post this weekend.
“To me, the reliance on a single industry, which could so easily change over the coming years with the expansion of legalization locally and nationwide, is extremely risky,” said Jaray.
Currently, there are two recreational marijuana stores in Manitou Springs, and they’re largely served by tourists who can’t purchase cannabis recreationally in Colorado Springs.
The mayor suggested that the Manitou Springs City Council should sponsor an economic development summit next year.
“It would be really good to have a broad community conversation about this topic and to figure out how we can proactively plan for a sustainable future,” Jaray wrote.
For this story we interviewed Mayor Ken Jaray and Councilman Jay Rohrer of Manitou Springs.
Mayor Ken Jaray
Just how much revenue does the marijuana industry bring into Manitou Springs?
We’re about six million dollars in sales tax revenue and just a little under half is coming typically from our marijuana industry.
What do you think would happen if another city nearby legalizes recreational marijuana sales?
Our assumption is that prices would go down if there’s more competition. Now we think that the prices perhaps are higher than they would ordinarily be because there’s not a lot of competition within a 35-40 mile range of Manitou Springs. So we think that if that changes, there will be a change in the market.
What could the city do to balance out its future economy and revenue sources?
Well there’s two ways: we could cut back our spending or we could look for other opportunities. My approach would be to try and look for other opportunities. What we can do is have more successful businesses. I think one of the things we can look at is who is coming to town now. I think it’s a different demographic than who used to come. What kind of services and businesses would they like here and could we offer them? And then we can capture the folks that are already here and hopefully improve our sales per square foot as opposed to expanding.
One option could be to embrace Manitou Springs as a pot town, no?
I’m not sure that’s really what I would think the community identity ought to be or really the desires of the community. You could, yeah, that’s certainly an option. I’m not sure I see our community going in that direction.
Councilman Jay Rohrer
What is driving the large sales tax revenue from the marijuana industry in Manitou Springs?
Manitou Springs is the only city in El Paso County to sell retail marijuana. The marijuana stores are very popular and they have a price point and so they generate a lot of sales tax. There isn’t anything in town that has gone as well as [the marijuana industry] has in the last five years.
Is it a bad thing to have so much revenue from the marijuana industry?
It’s not a bad thing to have the revenue, obviously. It’s been needed in Manitou for a long time. We’ve been able to do a lot of good things with it, including matches to all the federal grants we got from the flooding in 2013 and 2015.
On the other hand, any community that relies on one industry is always in peril when that industry changes. You always have a concern.
There’s a concern that the industry will soon change nearby?
Yes. As soon as another entity in El Paso County chooses to have retail marijuana, then our revenue is going to drop. They’ve all been waiting for it to happen somewhere. Whether it’s Palmer Lake, Monument, Fountain, Security… it just doesn’t matter. As soon as it happens somewhere, our revenue will decrease.
What’s your take on the solution? What do you think could help Manitou Springs not rely as much on the marijuana industry?
You know I just got back from the Colorado Governor’s Tourism Conference and this year’s theme was “See Further.” Most of the conference was on place-making and understanding your place and how you market your place. We really need to make sure we’re aware about, what our identity is and how we think about our town, and then leverage that, whether it’s for more tourism or even to bring in another type of industry.
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