Mesquite City Council medicinal marijuana
One of the owners of Deep Roots Medical speaks to the Mesquite City Council (photo: Josh Warburton)

Written by Marcos Camargo

On Tuesday, July 14, the Mesquite City Council voted 4-1 in favor of reducing the municipal tax on medical marijuana dispensaries in the city. So far, only one company has been granted a license to operate in Mesquite. Deep Roots Medical asked the City to reduce the tax from 7 percent to 3 percent to make it easier for the new business to open. Deep Roots Medical and its supporters argued that a 3 percent tax would put Mesquite in line with the average municipal tax on dispensaries in other parts of the state.

“There were a lot of unknowns at the time that the fees were originally set,” said Keith Cappuro, owner of Deep Roots Medical. “One year ago, not all the jurisdictions had taken a 100 percent stance on their respective fee structures. As it turns out, 106 of our cultivation competitors—which is approximately 84 percent—are paying between one to three percent in gross sales fees. [The current 7 percent] is 133 percent more in fees than our competitor’s are paying. I would certainly not waste the City’s time to request for a fee reduction if it was not necessary for our survival.”

Those who opposed the tax cut, including the sole dissenting councilmember, Kraig Hafen, argued that the decision to grant a license to Deep Roots Medical and to push through the original fee structure were made too hastily in the first place.

“I just hope that when we go forward with things like this, even though they’re heated, let’s address them,” Hafen said. “Let’s not put them off for a year. I think we need to address the problem when the problem occurs instead of kicking the can down the road.”

Councilmember George Rapson said that he agreed that the Council should have dealt with the fee structure better to begin with but argued that the 7 percent tax was still too high.

“We should have beat the fee thing to death back [when the license was first granted], but we didn’t have all the information then. We have a lot more information now,” said Rapson. “We just convened a business incentive committee, and they spent hours going through how to incentivize businesses to come here and how to keep the one’s here surviving. I didn’t see ‘tax them out of business’ as one of the suggestions.”

Rapson also said that the Council was elected on a pro-business platform, and it would be unfair to excessively tax one business over another because the Council may not like the product one of the businesses is selling.

“Fair is fair, right?” said Rapson. “If we’re going to stick these guys with 7 percent, let’s do it to all of the businesses who sell something… we need to give every one of our businesses a competitive, realistic chance to survive.”

The council ended up voting 4-1 to reduce the tax on medical marijuana dispensaries. Councilmember Kraig Hafen was the only member to vote against the tax cut.

By a Nevada state statute, Deep Roots Medical has 18 months to open for business, which means they must open their doors by March.