Cochise County communities are anxious to get their hands on the revenue generated from the recreational sale of marijuana.
City councils in Bisbee, Willcox and Douglas have discussed how they will embrace Proposition 207, the citizens initiative adopted by Arizona voters in the Nov. 3, 2020 election. Arizona is now one of 15 states where the drug has been decriminalized.
Hopes for significant tax revenue in the near future from local sales of marijuana are misplaced. Considering the cost, the number of dispensaries and other factors, it may be some time before marijuana sales generate any local revenue.
Prop. 207 will collect a 16 percent excise tax, in addition to a sales tax. For most cities in Cochise County — including those mentioned above — that means upward of 25 percent of the total purchase price for retail marijuana will be paid to state and local taxes. Sierra Vista and Huachuca City have the lowest Transaction Privilege Tax rates in the county at around 8 percent, lowering the overall tax burden for a marijuana purchase in these communities to a mere 24 percent.
Unlike the purchase of a “high-quality” six-pack of beer, which rarely costs more than $10, the price of medical marijuana in Tucson currently runs around $200 an ounce. The good news for those who purchase pot is that the cost in the Western United States is significantly lower than elsewhere in the nation. The three least expensive states for marijuana that allow legal recreational use are Oregon ($210.75), Washington ($232.90), and Colorado ($241.74). The national average is $326.06 per ounce, according to a September, 2020 study conducted by the Oxford Treatment Center, a nationally-recognized addiction care facility based in Mississippi.
It will also be a while before local communities see much revenue from retail sales. Existing dispensary operators are hoping to be able to offer recreational sales by April 20, 2021, or on “420” as those who are familiar with the culture understand.
Even when it’s possible to purchase pot for recreation, Cochise County currently lacks licensed-locations to buy marijuana. Cochise County has just one of the 120 operating medical dispensaries in Arizona and these outlets will be the first in line to get licenses for adult sales to anyone over 21. There are about nine or 10 licenses in Arizona that are not yet being used at a dispensary, and eventually those are likely to open and sell medical and recreational marijuana. The measure also allows DHS to issue licenses to counties where there are fewer than two dispensaries, which is currently the case in Cochise County. There are 26 “social equity” licenses to be issued in the state, but based on the qualifications to obtain one of these permits, it’s unlikely Cochise County will have a dispensary meeting these criteria.
All totaled, the number of dispensaries in the state will be about 160, and at best, this county might have three when business is booming.
We understand the need for local cities to discuss the impact of Prop. 207 on local ordinances and regulations. Any thoughts that the sale of recreational marijuana will be a financial windfall for cities in this county is just plain wrong.