WEED BETWEEN THE LINES SIN TAX SCHOLARSHIPS

Pueblo County provides millions in college scholarships from marijuana tax dollars — but an industry downturn could affect that program

BY WILL BRENDZA

Cannabis is currently recreationally legal in 21 states, the Northern Mariana Islands, the U.S. Virgin Islands, and Washington D.C. Across those states there are hundreds of counties, all using local mari juana excise tax dollars for dif ferent ends. Some are building or maintaining infrastructure with that money. Some are using it for health care or health education, substance abuse prevention, and, of course, to fund police departments.

But only one county in the nation uses its cannabis excise tax dollars to send students to college: Pueblo County in southern Colorado. Since 2015, Pueblo has allocated 50% of its cannabis tax revenue to fund college scholarships. In 2022 alone the county awarded nearly $3 million in scholarships to local high school graduates.

“This award is quite compelling as we look at supporting both our local institutions and students aspiring to obtain higher education at other colleges and universities in the State of Colorado and across this country,”

Pueblo County Commissioner Garrison Ortiz told the Pueblo Chieftain

With this program, Pueblo has taken a bold step in capitalizing on cannabis excise tax dollars — what many refer to as “sin taxes.” But the cannabis industry’s recent downturn has affected both cannabis businesses and the programs its tax revenue supports (Weed Between the Lines, “The cannabis downturn,” Feb. 9, 2023).

In Pueblo County, that loss of revenue could hit prospective college students harder than others.

The scholarship program was supported and largely progressed by Sal Pace, a Pueblo County commissioner and former state legislator. Pace worked hard to get County Ballot Measure 1B in front of voters in 2015. The local legislation allocated a minimum of 50% of its excise tax revenue from marijuana to college scholarships. The remaining 50% goes toward capital improvements.

“I wanted 100% of it to go for scholarships,” Pace told Colorado Springs Business in 2015, adding that it was still one of his proudest political accomplishments.

At first, money was awarded only to the Pueblo Hispanic Education Foundation. But after 2018 it opened up to include a variety of Pueblo organizations and students, including the Pueblo African American Concern Organization.

“We have gone from awarding all this money to one entity to awarding it to various entities, making it competitive, really seeing some innovative programs and accountability on behalf of the students receiving the scholarships,” Ortiz says.

The program had a record year in 2022. It raised more than $2.9 million — $1 million of which was awarded to Colorado State University-Pueblo and Pueblo Community College, with another $1 million going to colleges outside of Pueblo County. The University of Colorado system (CU Boulder, Colorado Springs and Denver) received $300,000 from Pueblo county marijuana scholarships.

While the 2023 numbers haven’t been announced yet, 2022’s cannabis scholarships raised 33% more than 2021’s ($1 million more). That trend tracks with the cannabis industry’s recent boom days — especially considering the cannabis tax revenue generated in Pueblo County doesn’t go into scholarships until the following calendar year.

As of the most recent reporting, cannabis sales in Pueblo County dropped almost 40% in the first 11 months of 2022. That is reflective of the entire state, which made only $325 million dollars in cannabis tax revenue in 2022, compared to $423 million in 2021.

Boulder Weekly reached out to Pueblo County several times for more up-to-date local numbers but did not receive a response.

That drop in sales and tax revenue will directly affect students who choose to go to Pueblo for college specifically because of this scholarship program. Or others who wouldn’t have gone to college at all without it.

For critics of sin taxes, this is evidence of why it’s risky to use them to fund public programs. Unstable industries shouldn’t be relied on to support things like healthcare or college scholarships, they argue.

However, others say it’s done the community good to funnel cannabis money into college scholarships.

“If there’s a couple of kids who go to college that wouldn’t have, that means we’re changing their lives,” Pace says. “Maybe changing generations of lives after them.”