2017-03-08 / Letters to the Editor

Sanford needs to look at all issues about legal marijuana

At the last Sanford City Council meeting, I decided to voice my opinion regarding the commercial elements of Maine’s new Marijuana Legalization Act.  

I chose to make my feelings known because I continuously hear about the wonderful financial benefits of marijuana sales in places like Colorado and Washington State.  There seems to be a growing belief that Maine, and Sanford in particular, will reap similar financial rewards from the taxation of recreational marijuana.  From my perspective, it’s simply not the case, and this was the basis for my statements.  I would like to provide some additional details to clarify my position.  

The primary difference between Colorado's law and Maine's law is that Colorado towns and cities directly receive a percentage of the sales tax of recreational marijuana sold within their municipality. The State applies a sales tax of 29 percent, with towns and cities receiving about 4 percent of that tax. The State of Colorado goes further to tax recreational marijuana at its cultivation stage, it seems no opportunity to tax this product is missed. 

Without question, this practice creates a large bump to state and local revenues that can be applied to schools, roads, parks, tax reduction, and similar activities.  To provide other comparisons, Washington State taxes recreational marijuana at a whopping 37 percent and the new Massachusetts law provides a local sales tax of 2 percent for the municipality on top of their 10 percent state sales tax.  

Now for the reality of our situation, Maine's law applies a 10 percent sales tax to recreational marijuana with all funds going to the State’s General Fund.  There is no distribution set for municipalities.  This is detailed on page 28 of the Bill (Chapter 417: Marijuana Legalization Act) that was passed.  Like most documents of this size, the devil is truly in the details. 

I would encourage everyone to have a look and read for themselves the bill that was passed in November. Barring sweeping changes by our state lawmakers, there will be little money from the sale of recreational marijuana to fund any meaningful change in Sanford. 

At the meeting, I also spoke of my concerns about commercial and industrial density.  Sanford has low priced industrial and retail space, which is unique in Southern Maine.  Our neighboring communities do not have this same exposure due to their strong existing retail condition and high barrier to entry, and this is why I am concerned. 

With our low barrier to entry, Sanford is vulnerable to any industry that seeks a low point of entry.  There are visible examples of this in Sanford today. 

I will provide and apply an example of my density concern.  One of the marijuana success stories that continues to be floated around is about Trinidad, a small town in Colorado that generated $800,000 in local revenue from the 4 percent sales tax it applies to recreational sales. From my research, there are no less than 12 retail operations in Trinidad, a town of 8,000 residents. To put in context, if Maine lawmakers decided to allow municipalities to apply a local sales tax of 2 percent to recreational marijuana, Sanford would need roughly 24 similarly-sized marijuana retail operations to generate the same amount of revenue as Trinidad Colorado. 

This is my point, the benefits of a medical marijuana sales tax only work when density is high.  Our retail space is not infinite and this density would eliminate, perhaps permanently, the retail variety that most Sanford residents seem to be looking for.     

Since my statement at the council meeting, there have been suggestions that I am trying to apply a stigma to the use of marijuana. Just to be clear, I am not judging people who use marijuana, and I am certainly not comparing its health benefits/risks against alcohol or other substances. It's a discussion that has few conclusions and nothing to do with my concern about commercial sales. History shows that I was accommodating and cooperative with the medicinal marijuana growers in our Mill District. I believe they continue to be supportive of the ordinance we developed together. 

Back to Sanford’s historic challenges with attracting retailers. I believe there are several reasons. Our proximity to tax-free New Hampshire certainly hasn’t helped and the lack of highway access is oftentimes mentioned. Undoubtedly, our household incomes have played a part. The recession was very difficult on Sanford, but we are making real progress. Sanford’s median household incomes have actually grown by $5,000 over the past five years.

While there is still much work to do, our growth is an indication that we are making good policy decisions and moving in the right direction as a community 

With that in mind, I have remained focused on activities and initiatives that I believe will add to our household incomes and fuel our economy.  Sanford’s planned Broadband network – SanfordNet Fiber - is a great example: when complete, it will help us attract high paying jobs in the high-tech field and other professional industries.  These are jobs that will be well above average in pay scale and will help attract new residents and retail to Sanford. I remain focused on activities that I believe will provide lasting and sustainable growth.  I cannot support initiatives that I believe are counterproductive to these goals. 

Finally, there is plenty of time to discuss and decide upon the future of the commercial sales and cultivation of recreational marijuana in Sanford.  The Maine legislature is working through the specifics of the law, which will most likely take all of 2017 to sort out.  In the meantime, I would encourage you to read the Marijuana Legalization Act and contact your local and state officials to express your opinion. 

I remain honored and humbled to be your mayor. 

Tom Cote

Mayor, City of Sanford

 

  

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