KANSAS CITY, Mo. — The Kansas City Council approved plans Thursday to implement a 3% local sales tax on recreational marijuana. Now it will be up to voters.
The council voted 11-2 in favor of the ballot question on a marijuana sales tax. Only council members Heather Hall and Brandon Ellington voted against it.
Three percent is the highest city sales tax allowed under Missouri’s Amendment 3 for recreational marijuana.
Separately, the state will also charge a 6% sales tax on all recreational marijuana purchases.
Kansas City’s local tax will not apply to medical marijuana purchases, and the state will keep its 4% tax rate for anyone with a medical marijuana card.
Still, over five years, Kansas City expects $300 million worth of marijuana to be sold within its borders, and leaders estimate the local tax could eventually add up to $10 million a year in revenue for Kansas City.
“This 3% allows us to invest in neighborhood quality of life — in trash pick-up, in homelessness prevention and, importantly, violence prevention — three things that we underfund regularly,” Kansas City Mayor Quinton Lucas previously told FOX4.
However, Hall argued the tax is unfair for to-be-decided micro-dispensaries. It’s a sentiment marijuana advocacy group NORML Kansas City also shares.
Ellington also argued adding another tax to marijuana sales could create a black market.
“People need to be conscious when we talk about the amount of money that drugs make, we need to look at it both ways,” Ellington said. “And if it’s legal — and you see this in any market — if prices are here, then people undercut that market.”
But Lucas disagreed, saying there already is a “thriving and stable black market of marijuana.”
But Lucas expects the relative ease of buying from a dispensary will push sales upward, citing the $300 million sales estimate — much higher that other estimates around Jackson County.
“There are a few things that could help us get to that point,” Lucas said. “First if the state of Kansas continues not to legalize marijuana, then I think you will see a growing market in Kansas City. You also have seen in more major cities marijuana related tourism.”
But in order for the city to collect this tax, voters have to approve it. The local marijuana sales tax will now appear as a ballot question in the April 4 municipal election for Kansas City voters.
Meanwhile, several other cities are still considering a local marijuana tax, including Independence, Belton and Grandview. City leaders have to make a decision by the end of the month to get the issue on the April ballot.