For years, Payson has had a storefront dispensary to meet the needs of the medical marijuana community in the area.

Then, Arizona voters changed everything.

They passed an initiative that allows for recreational use of marijuana for anyone 21 years and older.

The vote caused quite the fallout locally.

The medical marijuana dispensary site closed after the owner sold the license and the new license holder moved the operation to the Valley.

Medical users can still pick up orders made online, but recreational users must go elsewhere or put up a greenhouse. The new initiative allows people to grow their own, providing they have no more than six plants per person growing in a secure structure not visible from the street.

Most complicated of all, the council must re-do the town code to allow for a recreational use only dispensary.

To start the process, the council heard a report earlier in June, on what the new law means to the town and its code.

“When the (Town of Payson) initially took action on (recreational) … marijuana (it decided) to only be dispensed from a dual license holder,” said Sheila DeSchaaf, deputy town manager and public works director.

A dual license holder can sell both recreational and medical marijuana, but Andrew Provencio, owner and founder of the Payson dispensary wanted to make sure the community always had a storefront operation.

“I knew if I sold (the license), the license would move to the Valley,” he said.

Valid concerns said DeSchaaf.

The state rules originally required medical dispensary licenses to remain within a set area designated by the Department of Health Services “for a period of at least three years,” said DeSchaaf.

“After the three-year limit was up, the majority of medical license holders moved their facilities to metro areas because they were worth a good deal more due to the volume of customers/sales,” she said.

Adding to the complications, Provencio would like to retire soon. But he said his concern for the community kept him from retiring.

As soon as he understood the state would offer location specific recreational licenses, he knew he had a solution. Get a license for Gila County, which would remain in the area even after he retired and sold the business.

One problem, the state only had a few of these recreational licenses, so Provencio would have to win a lottery to get a license.

He hit the jackpot and received two licenses specific to the county. He can set up dispensaries anywhere in the county, but he told the council during the June meeting he would prefer to keep the storefront in Payson.

Now, the Town of Payson must play catch up to Provencio’s plans.

DeSchaaf said the town had only envisioned a dual license facility, with no more than two allowed in the town boundaries. The council has had numerous conversations and agreed the council had no interest in turning into a pot tourism center with a dispensary on every corner.

The council realizes the sales taxes the dispensary generates helps its bottom line, so it has no interest in kicking Provencio out of town.

They just need time to update those codes.

In the meantime, Provencio continues to provide online ordering and curbside pickup for the medical marijuana community in town.

The state imposes the normal 6.6% sales tax on marijuana sales, in addition to the added local tax. Payson has a 3% sales tax that it does not share with the state. Although one of the highest tax rates in the state, the additional tax helped the town pull out of the recession.

On top of those taxes, the state imposes an additional 16% excise tax on marijuana — bringing the total tax on marijuana to about 25% in Payson.

In the first two months recreational marijuana went on sale, the state collected more than $2 million in taxes. Medical marijuana sales from January to mid-February generated $1.4 million and recreational sales brought in $226,000.

The numbers should increase rapidly as new, recreational dispensaries are established throughout the state.

In neighboring Colorado, total marijuana sales have topped $2 billion in 2020. The state collected $387 million in taxes in 2020. The state collects a 3% sales tax and a 15% excise tax on retail marijuana. The state legalized pot in 2014.

Marijuana use has increased modestly among most age groups since legalization, according to annual surveys by the Substance Abuse and Mental Health Services Administration.

The percentage of Coloradans older than 18 who have used marijuana in the past month rose from 15% in 2013-14 to 17% in 2016-17. Use remains highest in those aged 18 to 25, with 32% reporting use in the past month. Curiously, self-reported use among those 12 to 17 decreased, from 12% to 9%.

Other studies have reported more serious impacts, including an increase in fatal car accidents in which drivers tested positive for marijuana — although there’s no blood test to measure the degree of impairment on marijuana.

Hospitals have also reported an increase in emergency room visits and reported mental health issues linked to marijuana since the drug was legalized.

Provencio has plans to provide some sort of break on price to medical users once he opens as recreational only. Medical marijuana patients pay a $200 fee to the state for their license.

The council will discuss the town code related to marijuana dispensaries at a future meeting.

Contact the reporter at mnelson@payson.com

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