Increasingly, companies that used to sponsor sports facilities are becoming more cash-strapped and are backing away from the negotiations. So what revenue stream are facility owners finding to take up the slack? Marijuana taxes, apparently. Two facilities in Colorado (one of the first adopters of legal cannabis) have been funded entirely by a so-called sin tax on marijuana.
According to Athletic Business, by November, Aurora, Colorado was in mid-construction on the new $41.9 million Southeast Recreation Center. The local Fox affiliate pointed out that the 76,000-square-foot facility broke ground in February 2021 and is expected to see completion in early 2023. It was designed by the POPULOUS architecture group. The new rec center will include:
- an indoor pool with waterslide
- pool party rooms
- a fitness area that includes a 1,000-square-foot fitness turf zone
- group exercise rooms
- multi-purpose community rooms
- a gymnasium
- a “figure 8” running track with various elevations
- a more than 20,000-square-foot indoor fieldhouse
An Indianapolis team of artists called Project One Studio will also create an installation throughout the center.
(Aurora’s Central Recreation Center, completed in 2019, was also entirely funded with marijuana tax money). Westword notes that center includes a gymnasium with six basketball hoops, a wave pool and water slides; a full fitness center, multi-purpose rooms; a teaching kitchen and local art throughout the building. Visitors can participate in over twenty drop-in fitness and swimming classes, as well as cooking, gymnastics and martial arts lessons, and summer and holiday day camps; after-school programming and senior activities are also planned.
Commissioned in 2015 by the Aurora City Council, the rec center project budget drew from $34 million in city sales taxes on recreational pot, according to Aurora budget manager Greg Hayes. The 61,000-square-foot building stands on a parcel of land purchased by the city in 1998 and is Aurora's first new recreation center in nearly forty years.
The City of Aurora, the article notes, is home to over twenty dispensaries, Aurora has invested a hefty portion of its marijuana taxes back into the community. In 2017, the city used $900,000 in pot revenue to renovate an old Aurora Police Department gym into a daily resource center for the homeless.
This is the beginning, too. As an increasing number of cities legalize marijuana (the Urban Institute has a great synopsis here), expect those cities to begin leveraging taxes. And those aren’t insubstantial – even in smaller states. According to MassLive.com, Massachusetts noted that sales tax in 2020 came to $30.05 million, while excise taxes amounted to a whopping $51.68 million. As of July 2020, 46 municipalities in Massachusetts had at least one recreational marijuana dispensary open for business, according to Cannabis Control Commission data. Those communities can collect up to a 3% local tax on recreational marijuana sales and reported $3.89 million in local tax revenue in fiscal 2019 and $14.39 million in fiscal 2020, according to comptroller data.
Of course, this is still an emerging market and the staying power of the money supply is not guaranteed. In July 2018, a stadium in England became the HopeCBD Stadium after a cannabidiol company struck a deal with the soccer team. However, in July 2019 it changed again to the Fountain of Youth Stadium in another sponsorship deal.