Camp Verde council discusses retail marijuana; staff told to survey public as legal tax limits and water concerns persist

At a Sept. 25 work session the Camp Verde Mayor and Council discussed whether to allow retail marijuana in town limits and directed staff to conduct a community survey and return with examples from nearby jurisdictions. Economic Development Specialist David Meyer told the Council that state law (Proposition 207 and A.R.S. 36‑2864) prevents towns from imposing taxes on marijuana beyond the ordinary transaction privilege tax (TPT); the state also imposes a 16% excise tax (A.R.S. 42‑5452) earmarked largely for public safety.

Meyer and Town Attorney Trish Stuhan explained that dispensary retail sales to consumers remain subject to the regular local TPT rate but that grow facilities generally sell to dispensaries (sales for resale) and therefore are exempt from TPT. Staff suggested the Town could explore a tiered water‑use rate to address heavy agricultural users; Utilities Director Jeff Low said the Town’s existing tier system already includes a top tier for users consuming over 50,000 gallons per month and that most grow operations use between roughly 10,000 and 50,000 gallons per month, with one operator (Harvest) approaching the 50,000‑gallon tier.

Staff recommended that if Council chooses to allow retail marijuana, the Town should: limit retail facilities to specific zoning districts (C2, C3, M1 and M2); require a Use Permit to allow site‑specific mitigation; and initially cap the number of retail marijuana facilities at two (with a population‑based mechanism to expand the cap). Meyer said a draft ordinance could be prepared quickly and that a full public process (staff review, Planning & Zoning public hearing, Council hearing) would likely take about 60–90 days.

Councilors were divided. Vice Mayor Marie Moore and others said residents travel outside Camp Verde to buy cannabis and that a local dispensary could capture sales and related spending if limited in number. Councilor Wendy Escoffier said she would not support a recreational retail dispensary in Camp Verde though she is not opposed to medical dispensaries. Several Councilors, including Cris McPhail, expressed concern about adding to staff workload and emphasized the need for public outreach.

During public comment Camp Verde Marshal Rowley urged stronger local oversight of growers, citing concerns about chemicals and groundwater impacts and asking that any funds tied to retail sales be earmarked for education and narcotics operations. Ben Flood, who identified himself as a Cottonwood resident and business owner, told the Council the town could see substantially higher revenue than staff estimates, stating the Town could expect “half a million dollars to $750,000 a month” if a dispensary located locally. Staff and the Town Attorney noted that state excise tax receipts are collected by the state and remitted in varying portions to local entities; the Town itself would receive only the regular local TPT on retail sales (discussed in the meeting at about 3.6–3.65%).

The Council directed staff to prepare and release a community survey, gather examples from neighboring jurisdictions about how they approached public engagement and code language, and return with the survey results and options. No ordinance or formal vote occurred at the work session.