Durango City Council approved reduced licensing fees for retail and medical marijuana businesses on Tuesday after members of the marijuana industry had requested a more equitable fee structure over the past year.
Since recreational marijuana businesses first opened their doors across Colorado in 2014, new retail and medical marijuana businesses were charged a total of $10,000 for license fees in addition to application and operations fees. Renewal fees cost businesses $8,000 annually.
Beginning April 1, both new licenses and renewals will cost marijuana businesses $2,420 – a 24% reduction in fees for new licenses and a 30% reduction in fees for renewals – according to the city clerk’s office.
City Council also approved a new proration policy for marijuana business licensing after a business paid in total $18,000 after getting a new license, undergoing a corporate restructuring and then needing a license renewal within five months.
“We’ve addressed this by (noting) that an annual license fee may be prorated based on the day of the issuance of the license to the new licensee. We could prorate the license fee for any remaining days until the expiration based off the new $2,420 fee,” said Ben Florine, chief deputy city clerk.
If a change of ownership at a marijuana business happened midway through the business’ licensing period, for example, it would pay a prorated fee of $1,210, he said.
Florine said the rate changes result in a reduction of general fund revenues of $72,540 annually.
City Manager José Madrigal said the general fund will eat the reduction this year and funding adjustments in various departments will make up the deficit. Sales tax revenues will determine how much adjustments are necessary in years to come.
Florine provided data about other municipalities that have implemented dedicated marijuana sales taxes and how much revenue the city could generate if voters approved such a tax in Durango.
Durango currently has a 3.5% sales tax and no dedicated marijuana tax. It collected $444,828 in sales tax revenues at the 3.5% rate from marijuana businesses in 2025.
Grand Junction and Golden have a dedicated 6% marijuana sales tax approved by voters, Florine said. Denver has a 5.5% dedicated tax; Manitou Springs has a 5% tax; and Boulder has a 3.5% dedicated marijuana sales tax.
If voters were to approve a 6% dedicated marijuana sales tax rate in Durango, the city would collect $1.2 million annually, he said. A 3.5% dedicated marijuana sales tax rate would generate $889,656 annually.
Two representatives of Durango Organics, a retail and medical marijuana business with three stores in Durango, provided public comments at the meeting on Tuesday addressing the proposed fee changes.
Durango Organics’ Vice President of Business Administration Carolynn Raish said she is pleased with how quickly city staff presented reduced licensing fee rates to City Council after councilors requested a proposal last month.
Durango Organics owner Jonny Radding thanked City Council for considering the reduced rates and asked councilors not to revisit the idea of a dedicated marijuana sales tax.
“We have had this discussion twice before in front of City Council, and twice before City Council voted it down, understanding that the industry was already really heavily burdened by extremely high taxes and the licensing fees,” he said.
He said implementing a dedicated marijuana sales tax would be “two steps back” for Durango Organics and the marijuana industry in Durango.
cburney@durangoherald.com
