DENVER (KDVR) — With costs steadily climbing on many necessities, more people may be spending less on other items. Could marijuana be taking a hit from the higher costs of living?

Industry officials think so. Marijuana sales are down by millions, and people in the industry are concerned things could get worse in the near future if a Denver marijuana tax passes in the fall.

“I think what’s been made really clear this year is that there has actually been a change in our day-to-day customers and a general contraction of our business overall,” Amy Andrle said.

She and her husband have owned and operated L’eagle since 2010. They have seen the industry change over the years but she said this year, they have noticed the revenue decline.

“In keeping with the industry, which is happening across-the-board at about 25% and, that can be a challenge for a small business owner. We’ve been incredibly fortunate to be able to maintain our staff, to be able to keep our doors open. We are small, we are nimble but we have had to make cuts where we can,” Andrle said.

Denver voters could decide on marijuana tax increase

The industry has collected almost $45 million less than it did this time last year. That is not stopping a collaborative effort in Denver from running a city-focused version of a ballot measure that failed statewide. The MySpark Denver effort would raise city taxes on marijuana by 5% by 2024.

“We have to stay competitive in the market right now. So what happens is, we are paying out more taxes, and right now it’s over 26% and that’s just city and state, right — not even including what we have to pay out federally. We don’t pass that on, so who is impacted by that are the businesses themselves,” Andrle said.

The group running the Denver ballot initiative wants to use the proposed increase to fund out-of-school learning opportunities for kids in Denver. Shop owners want them to find another source to fund it.

“This is a Denver-specific tax, so you are also going to increase the competition in these neighboring cities that are right there. So you could be putting someone in a really hard place in Denver, but someone less than a mile away doesn’t have to pay that. That really puts the competition on unequal footing,” Andrle said.

The group backing the Denver effort believes they will have more luck with a city-focused proposal this time around. They said they conducted exit polling and drafted the 2022 proposal with three key changes compared to 2021 proposition.

The measure no longer calls for revenue to be pulled from the state land board. This version tailors the proposed program to fit Denver, so it would only serve one metro area rather than the entire state, and it would designate $2.5 million of existing marijuana revenue for free afterschool providers to access services.

Proposition 119 on the statewide ballot failed with a statewide opposition vote of 54% last year.