Denver Considers 3.5 Percent Tax on Marijuana Sales

Fears of the black market put a check on the tax appetite

Denver Auditor Dennis Gallagher disagrees with Mayor Michael Hancock's recreational marijuana tax target, arguing the city should seek a starting tax rate of 3.5 percent instead of the mayor's suggested 5 percent tax rate.

Gallagher warned Denver City Council members in a letter sent to Councilman Charlie Brown Monday, that the city's 5 percent tax rate plan risks sending users back to the "dark shadows of the black market."

"He wants the city to be very careful about not putting too much of a tax on it, because you (could) then defeat the purpose of what Amendment 64 was meant to do, which is not buying on the black market," said Denis Berckefeldt, spokesman for the auditor.