Manitou Springs upholds two-store limit for pot shops, spurring petition initiative to raise cap

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MANITOU SPRINGS, Colo. (The Gazette) - Manitou Springs officials reaffirmed the city's two-store cap for recreational pot sales Tuesday night, rebuffing a marijuana advocacy group's request to double that number.

The City Council voted 6-1 to pass the resolution, with Councilwoman Becky Elder opposed, signaling that the council has no intention to further explore the idea.

"By last week, I had heard enough from my constituents, pro and con, to be convinced a large majority of them — as well as other citizens and business owners in the city — do not want to increase the number of marijuana shops," Councilman Bob Todd said before the vote on the resolution he sponsored. "And I was hearing the same thing from most of my peers on the council."

The property and business owners who want more pot shops will start circulating an initiative petition to increase the city's limit, said Jason Warf of the Southern Colorado Cannabis Council.

"We don't know the will of the citizens yet, and neither does the city," Warf said, adding that council members "based their opinion" on a few anti-cannabis residents who don't represent the whole city.

"Let's say that the proponents do their polling, and it comes back incredibly favorable," he said. "At that point, the city has already said, 'We don't really care what our constituents say; we're not going to do this.'"

Once they start circulating petitions, proponents have up to 180 days to collect 330 signatures from registered voters in Manitou, according to the city clerk. If the required signatures are verified, the council would have a month to call a special election or pass an ordinance adopting the measure.

A special election would cost $15,000 to $20,000, Todd wrote in a memo to the council.

Warf asked the council late last year to raise the two-store cap after he was approached by Adrianne Mollins of Colorado Springs. She and her husband own a Pueblo marijuana cultivation center and want to expand to Manitou. More stores would generate more tax money for public improvements and bring competition that would drive prices down at Maggie's Farm and Emerald Fields, Warf has said.

City officials initially considered soliciting residents' views with a "community engagement" process. They also asked for evidence that residents want more stores and data that tax revenues would increase.

Sales tax revenues from Maggie's Farm and Emerald Fields have bankrolled projects from stormwater upgrades to helping pay for a major renovation of West Colorado Avenue.

Those recreational pot sales now are taxed at 25.03 percent, including the city’s 6 percent tax. A 2013 ballot measure allows the City Council to raise that rate to 10 percent. Per state rules, the city does not disclose sales tax collections because it has fewer than three pot stores. But the city’s tax collections in the “other” category for businesses, including marijuana, increased from $3,325 in December 2013 to nearly $240,000 in November 2018, according to the most recently available city data.

The city’s general fund, too, has more than doubled, from about $4.9 million in 2013 to a projected $10.4 million this year.

But council members said they doubt that new shops would bring in more tax money. The money instead might be spread out to more stores, Mayor Ken Jaray and other city officials have said.

Residents have questioned where new stores might open, given the city's tight restrictions. The shops must be in the commercial zone and more than 500 feet from schools, substance abuse treatment centers and some other facilities, says a 2014 ordinance that allowed the two shops. Other factors also are considered, including proximity to parks, community centers, hotels and neighborhoods.

Marcy Morrison, a former Manitou mayor and board member for the city's Urban Renewal Authority, told the council that she and others in the community support the resolution because the current regulations are best for the health and welfare of residents. Plus, she said, residents want to see diverse businesses, not just pot shops.

Maggie’s Farm opened on Manitou Avenue in 2014, and Emerald Fields opened a few blocks east the next year.

Ambur Racek, owner of Studio A64 cannabis club in Colorado Springs, said before the vote that allowing more stores could spread out business and result in better service at the existing shops, which don't always offer people enough education about the products they buy.

"From what I hear, we get a lot of complaints about the two dispensaries being overcrowded," she said. "It takes a really long time to get in and out of them."

Warf has said the stores charge two to three times the market rate because they have a "duopoly" in El Paso County. Customers leaving both shops Friday told The Gazette they would support more stores, echoing Warf's argument that the change would lead to lower prices.

Maggie's Farm and Emerald Fields have not responded to multiple requests for comment.