Last month, Paonia marijuana dispensary owners Susie Kaldis and Jimmy Lowe asked the Town Board of Trustees to limit the number of dispensaries within town limits to two. The existing cap of three, they claimed, had led to repeated failures.
Shortly after the vote in 2020 to allow marijuana dispensaries in Paonia, the town set a cap of three recreational and three medical dispensaries within town limits. The board lowered the cap on medical dispensaries from three to one in the past year.
Jimmy's joint owner, Susie Kaldis, read from a statement requesting a lowered cap on recreational dispensaries at the September 23rd meeting.
“By reducing the number of licenses to two, the town supports sustainability and stability in this industry. Two dispensaries can meet the community's needs while remaining financially viable, keeping jobs secure, and preventing the pattern of closures we've already seen twice in just two years. At its core, the role of government is to protect safety, apply fair rules, and help our community thrive — not to create conditions that lead to repeated business failures. Adjusting the number of licenses to reflect the reality of our market is a responsible and community-minded step.”
Trustee Rick Stelter argued that lowering the current limit could restrain trade.
“Would we stop another grocery store from coming in if they decided to come in? It's a sticky wicket here. And I know there's a very competitive market, and I don't like the system, the way it's set up. But I don't think that restraining, changing the number of licenses is the thing to do. It looks bad,” said Stelter.
The board, by a vote of three to two, defeated a resolution offered by trustee Lucy Hunter to lower the cap.
Kaldis and Lowe then asked the board to replace Paonia's additional $5 charge on every purchase to a 5 percent sales tax, the same rate as dispensaries in Hotchkiss and other nearby towns. They argued that the flat fee doubled the cost of small purchases —creating an unfair tax — and discouraged buyers from using Paonia stores.
Town Administrator Stefen Wynn said that because the $5 fee was stipulated in the vote to allow dispensaries in the town, it could not be altered without another vote of residents. The soonest that could happen would be next spring.
KVNF spoke to Lowe, general manager of Jimmy's Joint, about the challenges of running a dispensary in Paonia. He said owners are burdened with fees and regulations that no other business, including restaurants and liquor stores, must surmount.
The town requires a $5,000 new license application fee, a $2,000 new license fee, a renewal application fee of $300, and a renewal license fee of $5,000. The state requires a $5,000 application fee and license fees ranging from $6,240 to $17,480, depending on the number of owners. The state also takes a 15 percent sales tax and a 15 percent excise tax. The Marijuana Enforcement Division tracks the plant itself and the activities of the dispensaries.
“Well, the state, we have to follow their guidelines through the Colorado Med or MED,” said Lowe. “All of our products have to run through ‘metric,’ and metric is a way of keeping track of it by barcodes and whatnot from beginning to end, you know, and when a product, say it's flower, and then it's getting made into an extract, it carries a barcode until it gets changed into an extract, and then that becomes a different thing, but it has a batch, it came from this batch, and the state takes a big chunk of sales tax. The federal government gets their end off the business on the back end, and where they don't consider it a legal business, they don't allow you to write anything off.”
Micah Erickson is the owner of Mountain High Dispensaries in both Paonia and Hotchkiss. Her sales in Hotchkiss are triple the amount of her sales in Paonia, and she feels it's largely because of the difference in additional tax.
In her opinion, “it’s just not feasible, the $5, anymore. It's not fair to the consumer. And I do think it should be on the ballot because they deserve to be treated just like every person in Colorado and especially here in Hotchkiss, too. I carry the same things there that I carry here and they come all the way to Hotchkiss for that same thing, just so they can save five dollars. You know there's so many people, locals, that I've gone to school with, who’ve lived there forever, and we’re all struggling to make it, just to live there. You know we're all just trying to make a living making it in this beautiful valley and especially for the ones that have been here for our whole lives, you know, it's hard. They're just wanting to buy a joint, but can't for under $15 because of a $5 fee.”
As winter approaches, Paonia's dispensary sales will likely drop with the dwindling number of tourists. A vote by Paonia to replace the $5 fee with a 5 pcrcent tax may bolster business, but Wynn predicts the town will take a loss of about $35,000, and there's no guarantee that the board will put it on the ballot.”
