Colorado city 'just says no' to marijuana. Michigan cities may face the same decision.

COLORADO SPRINGS, COLO. — At the eastern foot of the Rocky Mountains here — a mile high and under the splendid peaks that inspired lyrics for “America the Beautiful” — you’ll find a sizable island.

As other cities and towns in Colorado have been cashing in on retail marijuana after the state legalized cannabis in 2012, Colorado Springs, the state’s second largest city, has just said no.

Michigan communities could face the same decision if voters this November pass a ballot proposal to legalize marijuana.

Nearly 75 percent of Michigan cities, towns and villages have opted not to allow medical marijuana dispensaries, so they might not favor allowing recreational either. Cass County, for instance, has no communities listed with the state as allowing medical marijuana businesses.

“We have no future plans of opting in on that recreational proposal if it passes,” Jerry Marchetti, supervisor of Ontwa Township in Cass, said.

Prospects are unclear in cities like Niles, where the mayor had to cast a tie-breaking vote to allow medical marijuana businesses.

Colorado Springs isn’t alone in banning retail cannabis sales. Only about a quarter of Colorado cities and towns permit them. But it is a notable exception.

“We’re by far and away the largest city that’s rejected it,” Mayor John Suthers said.

“We’re just a little island that’s resisting.”

But some wonder if the resistance makes sense if the city is missing out on millions in revenue — and residents are buying recreational cannabis anyway just beyond city limits in the small neighboring city of Manitou Springs, which has the only two retail marijuana shops in a 35-mile radius. There’s been talk about getting the issue on a ballot for city voters to decide.

Yet, it isn’t all just about the money.

For the mayor, it’s a moral issue. For some City Council members it’s about what’s practical. For a local business owner, it’s about freedom and enterprise.

Why the resistance?

Located about an hour south of Denver, Colorado Springs and its surrounding area is home to about 670,000 people, five military bases, U.S. Olympic Committee headquarters and the conservative Christian organization Focus on the Family. Skiing, hiking, biking and other outdoor activities are popular. The city and the county it’s in, El Paso, are projected to overtake the Denver area as the state’s most populous region by 2035.

While medical marijuana is available at more than 120 dispensaries in Colorado Springs if you’re a card-holding patient, City Council voted to ban the sale of recreational marijuana. The county opted out, too.

Because marijuana remains illegal at the federal level, there’s a fear that if the city allowed retail sales, it could become a black mark against it if any of the military bases are considered for closure or realignment, City Council President Richard Skorman said.

“We’re always afraid,” Skorman said. “Fort Carson is the biggest local employer.”

The Army base has more than 25,000 soldiers.

Suthers, a former Colorado attorney general and admitted “drug war dinosaur,” thinks banning sales is in keeping with the community’s culture and “relatively conservative population.”

“I think it’s important, and I think our public does, to say as a community, particularly with our military presence, our sports emphasis, we don’t think getting high for fun is good public policy,” Suthers said.

He cites rising rates of marijuana use among Colorado youth, fears of broadening substance abuse, and a thriving black market that uses legal cannabis as cover as three reasons, among others, he thinks it’s wrong for the city to promote retail marijuana and make money off sales.

Plus, he said, the money sales would bring in is relatively minimal and “not worth the cost.”

How much money?

A pro-cannabis group commissioned a University of Denver study that last year found Colorado Springs’ retail pot sales ban might be causing the city to lose $25 million per year in taxes, fees and other revenue.

“Oh, that’s ridiculous,” Suthers said.

He said the city’s “best estimate” on retail pot is that it could generate about $10 million per year in revenue.

The city brings in about $3 million per year in revenue from medical marijuana dispensaries, which is about the same amount it costs to regulate them, Skorman said.

Those numbers are small in the city’s total budget, which for 2018 was about $288 million, over $174 million of which came from sales and use taxes. Property taxes here are slight.

It’s unclear, though, how many retail shops there could be in Colorado Springs and therefore how much revenue they could generate.

An hour to the north, the state’s largest city, Denver, collected about $35 million in retail marijuana revenue in 2017, with nearly 170 recreational dispensaries. Nearly $10 million more in revenue came in from medical marijuana.

Amid talk of a recreational sales ballot initiative either by voter petition or council action, Skorman said he favors allowing a limited number of retail pot shops. He thinks 12 to 18 “tightly regulated” shops could work.

Where Skorman might be open to a small number of retail shops, City Council member at-large Bill Murray would go big. He’d favor letting all 120-plus medical dispensaries obtain retail licenses and allowing the market to shake itself out.

Murray says the city is making a mistake not allowing retail marijuana sales when sales are happening on the city’s doorstep in Manitou Springs, and a large portion of the buyers live in Colorado Springs.

“Your arguments are no longer valid because I can ride my bicycle to get what you say I can’t have here,” Murray said.

‘Sky hasn’t fallen’

Murray, a retired Army intelligence officer who did “a lot of counter drug work,” said he’s frustrated by the retail marijuana sales issue, and marijuana debate in general.

He said cannabis has been unduly feared, to the point that debate over it detracts from what he thinks are more pressing social concerns, like the opioid epidemic, alcoholism, cancer and obesity rates, and diabetes.

Medical marijuana has been in Colorado and elsewhere for decades, and now recreational marijuana has been in Colorado for six years, he said.

“You obviously see that the sky hasn’t fallen,” Murray said.

“I think the control and regulation of marijuana both medical and recreational is the answer,” Murray said.

He doesn’t see marijuana as much different from alcohol and favors allowing recreational marijuana consumption clubs, too, which has been a sticking point in the city.

Two clubs have city licenses to operate, but patrons have to bring their own marijuana to consume. No other clubs can obtain a license, and should the existing clubs go out of business, their licenses die with them.

Ambur Racek, co-owner of one of the consumption clubs, Studio A64, said not being able to sell marijuana makes it difficult to stay in business, and she wants retail marijuana sales in the city. She runs a café downstairs to pay for the club upstairs.

Racek’s involved in efforts to draft a consumption club license that could be a model in the state and that she hopes Colorado Springs will someday consider.

Colorado’s law legalizing cannabis, like the proposal in Michigan, does not allow for public consumption of marijuana. But several consumption clubs sprang up in Colorado Springs after marijuana was legalized in 2012, then were shut down for illegally trading cannabis to pay for operations. Racek said many of them have just gone underground.

Cannabis use is a “lifestyle” for regular users, she said, and they would like to gather with other users at a club like hers “instead of hide in their room.”

“It’s like being freed because this is who they are, this is how they live their lives and now they can do it openly,” Racek said.

She has plenty of patrons who pop over to Manitou Springs to buy their weed.

Manitou windfall

Manitou Springs has been collecting about $3 million per year in revenue from its two retail marijuana shops. That money has gone into the general fund, lifted the annual budget to about $8 million, and paid for things like road and bridge work, Mayor Ken Jaray said.

“It’s huge,” Jaray said. “Clearly it’s allowed us to do a lot more projects.”

Jaray said his town — a “tourist-oriented mountain community” of about 5,300 — got in on sales fairly early after gathering a lot of public input.

“Our community values are more in line with progressive thought that marijuana is one of those things that are better off regulated than ignored, that we can do a better job educating our youth if we are out in the open about what it does,” Jaray said.

Two stores operate in a commercial area on the east side, right near the border with Colorado Springs and along a main artery that connects the two cities.

Jaray said it’s clear “a large segment” of customers at the shops are from Colorado Springs.

“We are delighted to service that market,” he said.

“John Suthers and I agree wholeheartedly that Colorado Springs should not have legal recreational marijuana,” Jaray said with a laugh.