BRECKNRIDGE TO LIMIT POT DISPENSARIES TO THREE

Town Plans to See Seven Current Dispensaries Reduced Through Attrition

BRECKENRIDGE -- The Town of Breckenridge will move forward in the
next few weeks with a measure to cap the number of medical marijuana
dispensary permits that will be allowed in the town limits.

The ordinance, which has not yet been presented to council, is
expected to begin to resolve for the town an issue state and local
governments have grappled with for the last few years.

Breckenridge currently has seven dispensaries doing business in town,
but will look to reduce that number to no more than three in the
coming years through attrition, allowing market forces to narrow the
number of operations and not approving any new licenses. Existing
dispensaries will not be allowed to change locations or ownership
under the new ordinance, town officials said.

"Obviously we're not going to run them out of business," Breckenridge
spokeswoman Kim DiLallo said of the cap policy. "We'll get to a point
where there will be natural attrition."

Town council gave staffers direction to begin drafting the dispensary
cap ordinance at Tuesday's town council retreat.

Tricky issue Breckenridge has been considering how to regulate
medical marijuana dispensaries in town since a moratorium went into
effect last year. Both local and state governments have grappled with
the issue since voters approved Amendment 20 in 2000, allowing the
use and sale of marijuana for medical purposes.

The town council's move to cap dispensaries comes as marijuana
advocates plan to push eight separate ballot initiatives aimed at the
legalization of the drug. The initiatives would ask voters to allow
the possession and use of less than one ounce of marijuana for people
ages 21 and up, and to give the state leeway to begin regulating the
retail sale of marijuana.

It was those initiatives, in part, that gave Breck officials pause in
moving forward with a proposed marijuana tax, which would be similar
to a tobacco tax.

Half of the proposed initiatives will include a taxation component,
town staffers said.

Breckenridge officials also considered the fact that medical
marijuana is supposed to be used as medicine, which is tax exempt.
Also at play is the fact that marijuana use for any purpose is still
illegal under federal law, and applying a tax appears to legitimize
the practice.

Breckenridge's seven licensed dispensaries netted about $1 million in
taxable sales in 2010 and already grossed more than $200,000 in the
first quarter of 2011. A 5 percent marijuana tax would bring in
almost $58,000 annually, based on estimates from the town, in
addition to the approximately $25,000 in sales taxes Breckenridge
collected on marijuana in 2010.

Council members said an additional marijuana tax would help offset
the costs that regulation questions and enforcement have incurred.

"My concern is that medical marijuana has cost this town our time,
staff time," Mayor John Warner said. "I'd like to see us doing it
sooner than later."

The Denver Post contributed to the reporting of this story.