Mayor Michael Hancock wanted the city of Denver to tax pot at least 5%, but the city council chose to go instead with a more affordable 3.5% sales tax on retail cannabis. The measure also permits, however, the council to change the tax at any time to as much as 15%.

"My goal was to buffer the city as much as we can to make sure we have the ability to respond," Hancock told The Denver Post. "I was at five. But I am not disappointed. We laid out what we thought would be the best reason. But the City Council sees 3.5 percent as the best way to get a yes vote."

The council voted 7-6 for the lower tax, siding with Auditor Dennis Gallagher. Chief financial officer Cary Kennedy said the 3.5% tax is expected to bring in $3.4 million a year to pay for regulation, enforcement and education around the new industry. At 5%, the tax would have brought in an estimated $4.8 million.