Boulder’s electronic smoking device regulations still unclear
There is continued confusion around how to best define language that would clarify Boulder’s code regulating and taxing electronic smoking devices.
After being directed to discuss the matter by Boulder City Council, the city’s Cannabis Licensing and Advisory Board on Tuesday agreed that it does not have a good way to distinguish between the various smoking devices.
“CLAB doesn’t have a definitive test differentiating cannabis and tobacco vaporizers,” board member Brian Keegan said.
This conversation began publicly last month when staff proposed a code change that would impose a tax on all electronic smoking devices, regardless of what those devices are used to smoke. Members of the city’s financial and legal teams said it’s been challenging to implement the voter-approved initiative requiring a 40% sales tax on electronic smoking devices because of the lack of clarity around which devices should be taxed.
“The conundrum that staff has when we’re looking at administering a tax is how to develop clear objective standards,” Tax and Special Projects Manager Joel Wagner said. “What we found in going out and doing research is that, you know, in a lot of this space … how manufacturers talk about the devices and how the devices are actually used or reviewed or sold doesn’t conform.”
The change, which city staff views as a clarification of the existing law passed by Boulder voters in 2019, is due to “inartful drafting” when the ordinance implementing the tax was adopted, staff said in a prior interview with the Camera. The ordinance originally defined the people collecting and remitting the tax to the city as tobacco retailers.
As such, Keegan and other CLAB members recommended distinguishing the places where the tax should be applied. Licensed marijuana retailers, for example, should not have to pay the tax, he recommended.
But Senior Attorney Kathy Haddock said doing so would be problematic “from a taxing perspective.” Haddock said the board could make any recommendation it wanted but that staff didn’t believe taxing based on the type of retailer would be feasible.
In a June meeting, the City Council was compelled by comments from cannabis industry representatives as well as the belief of many council members that the original voter-approved measure was not intended to include cannabis.
There are exemptions that say the tax will not apply to any electronic smoking device approved for sale as a smoking cessation product or for other medically approved purposes. The exemptions also say that marijuana included in the electronic smoking device at the time of sale is not subject to the 40% tax.
However, VS Strategies, a cannabis policy and public affairs consulting group, suggested including an exemption for any devices that cannot be used for tobacco or nicotine delivery.
The Council generally supported that but directed staff to fine-tune the language. In the meantime, the Council said electronic smoking devices that are used for cannabis should not be taxed.
Several Cannabis Licensing and Advisory Board members argued that the policy itself should be revised and that it might require returning to the voters.
“It’s going to have to be redrafted and that’s not CLAB’s purview. That’s not CLAB’s job,” member Tom Kunstman said.