Photo by Elsa Olofsson
As one window closes, another one opens.
In what’s expected to be a tight 2027 budget, Longmont is preparing for the end of a key funding source. But, the city is planning for two recently-annexed dispensaries to make up the difference.
Colorado used to share a percentage of its marijuana sales tax revenue with cities and counties who had licensed cannabis businesses. Before July 2025, it was 10%. Then, it was cut to 3.5%. Now, it’s gone entirely after the state passed a bill this year eliminating the shareback program.
It’s the symptom of a problem everyone in Colorado is adjusting to: A tanking marijuana industry.
Hour of ‘weed’
Since reaching a peak in 2022, Longmont’s revenue from marijuana has been steadily declining. The same goes for the state — Colorado’s revenue peaked at $2.2 billion in 2021 but has since fallen over 40%. Facing budget constraints of its own, the state opted to take action to retain the money it once shared. So, why is grass drying up? Some major factors:
Colorado isn’t so special anymore. After being the first state to legalize recreational marijuana, 23 other states have since followed suit, including nearby states Arizona, New Mexico and Nevada, diverting tourists and potential new residents.
Declining wholesale prices. Oversupply and competition from other hemp-derived products are part of what’s caused the market value of marijuana to bust.
Back to Longmont now…
In a typical year, Longmont receives roughly half a million dollars in revenue from marijuana sales taxes via three different sources: the city’s 3.53% sales tax, the 3% Special Retail Marijuana Tax, and the Colorado shareback program. Now that the latter is gone, Longmont is looking for a replacement.
The city arrived at a solution in May when it annexed two dispensaries: Native Roots at 19 S. Sunset St. and JARS at 250 S. Main St. According to a Longmont City Council agenda packet, tax revenue from those two stores should offset the city’s losses.
Currently, the 2027 budget includes $593,416 for the Special Retail Marijuana Tax. Per city law approved by voters in 2017, half of those funds are earmarked to support affordable housing programs, and the other half will support mental health and addiction programs.
Big picture:
Longmont City Council and Co. will continue to work their way through the 2027 budget at a study session tomorrow. City staff are proposing a $547.5 million operating budget for 2027, a 5.32% increase from last year. You can watch tomorrow’s study session in person at the Longmont Civic Center or view the livestream here at 7 p.m.