A College Degree, Funded by Pot

College-bound students in Pueblo will be able to benefit from taxes on legal marijuana grow operations starting in 2017.

In November, Pueblo voters approved an excise tax on marijuana cultivators to fund college scholarships and various other community projects by a 60 to 40 percent margin.

The scholarships will be applicable to students graduating from Pueblo high schools “who have been admitted to colleges and universities located within Pueblo County and will be attending those schools the succeeding fall,” said Paris Carmichael, community information manager for the Pueblo County Board of Commissioners.

Under these requirements, recipients of the scholarship could attend college either at Colorado State University-Pueblo or Pueblo Community College.

“The students receiving the scholarship must meet the college’s or university’s admission requirements,” Carmichael said, but as long as they’re graduates of Pueblo high schools, those are the only academic requirements students are required to meet.

Carmichael said the county is “awaiting a year of revenue in 2016 to see actual numbers before determining scholarship amounts in 2017.” Once the revenue comes in, she said scholarship recipients will each be awarded the same amount of money.

Over the course of five years, the tax will phase in, gradually, until it reaches a 5 percent rate in 2020.

Carmichael said the county expects $3.5 million to be raised at the 5 percent rate, under Taxpayer’s Bill of Rights estimates. But “if Pueblo County comprises 20 percent of the statewide market and the average wholesale price remains consistent,” she said, “then it would generate $2.5 million at 5 percent.”

The money generated from the tax will be split between two separate funds in Pueblo County — the Pueblo County Scholarship Fund and the Infrastructure and Community Development Fund.

The new measure requires that each year, at least half of the tax money will go to the scholarships. The other half of the funds will be split up among projects including a medical marijuana research grant, building safe routes around schools in Pueblo, a study examining the feasibility of extending Amtrak’s Southwest Chief to Pueblo, along with others intended to improve the community.

In the past, the county’s marijuana taxes applied only to the sale of marijuana at shops in Pueblo. But the county is also home to wholesale recreational and medical marijuana cultivators whose products don’t always end up staying in Pueblo.

“The excise tax allows Pueblo County to tax wholesale sales of marijuana,” Carmichael said in an email. “Some of the wholesales leave the county and the county never benefitted because the tax was only on the end product.”

Carmichael said the commissioners are working with the county attorney’s office and the colleges “to finalize the approach of awarded scholarship dollars,” and ultimately decide if the scholarships will go directly to the students or the colleges.

CSU-Pueblo has recently been hesitant to accept funds from the marijuana industry, and university policy prohibits both recreational and medicinal marijuana use on campus.

According to a 2013 CSU-Pueblo document detailing marijuana on campus, students aren’t allowed to possess the drug anywhere on university property, including dorms, regardless of the state’s law.

“In order to receive federal funds,” the document said, “CSU-Pueblo must comply with federal law, including the Drug Free Schools and Communities Act, which requires that our campus be drug-free.”

PCC’s policy, listed in its 2015-2016 student handbook, also prohibits marijuana use on campus. The policy mentions the school’s compliance with federal laws but doesn’t cite receiving federal funds as a reason not to use marijuana on campus.

Last year, concerns were raised at CSU-Pueblo about the receipt of funds from pot shops in Pueblo that wanted to advertise with the student-run news publication, the CSU-Pueblo Today.

The administration felt that since the publication is part of a class at the university, running the ads could jeopardize the funds the school receives from the federal government.

The pot shops ultimately decided not to run ads in the magazine, but logistical concerns such as banking were raised by the university. Most banks are similarly hesitant to work with the marijuana industry because the drug is still illegal federally.

Carmichael said the commissioners still have time to work the awarding process out, but she doesn’t think the schools should have any problems accepting the funds.

The state government and Pueblo County regularly accept funding from the federal government, she said, and “neither government has lost any federal dollars by comingling with marijuana revenues during the past five years.”

“However, Pueblo County could consider contracting the scholarship program administration out to a non-profit that already provides scholarship programs.”

The CSU-Pueblo Foundation, for example, operates separately from the school and awards most of the university’s scholarships.

Cora Zaletel, executive director of External Affairs at CSU-Pueblo, said it’s not clear how the funding will be distributed, but that the university would either accept the funding from Pueblo County or the students themselves.

“The county commissioners saw the Pueblo County Scholarship Fund as a way to improve the workforce and ultimately attract new employers by increase access to education for Pueblo citizens while reducing student debt,” CSU-Pueblo President Lesley Di Mare said in a statement.

Carmichael said the commissioners still have time to work the awarding process out.

“It’s worth noting that the first awards won’t be made for more than a year,” she said.

The commissioners’ ultimate goal behind the tax, she said, was to make higher education a reality for students in Pueblo.

“Dedicating the tax assured voters where the money would be spent addressing one time projects and scholarships,” Carmichael said. “The scholarships are dedicated to improving our workforce, reduce student debt and maintain current employers and to attract new employers.”

“These scholarships will help Pueblo’s youth gain a higher education with lower college debt.”