Oregon to Exceed Expectations After $3.5 Million in Marijuana Tax Revenue Collected in the First Month

   

Oregon’s first month of taxed marijuana sales netted the state about $3.5 million, exceeding original state projections and showing that the state is poised to have very robust marijuana sales. The tax revenue collected is even months earlier than expected as, after the passage of the 2014 Measure 91 legalization measure, the state wasn’t expected to start taxed sales until October of 2016. The Oregon Legislature passed a bill allowing for the taxed sale of marijuana flowers in existing medical marijuana dispensaries, but not any edibles or other products, to begin at the beginning of 2016.

Medical Marijuana dispensary

The state’s financial impact statement mailed with every voters’ pamphlet to every household in Oregon, estimated that marijuana sales would generate between $17 million to $40 million was the program was implemented, the $3.5 collected from just the first month of taxed flower sales, shows that the state is likely to crush the upper end of the state’s initial estimate. The Oregon State Legislative Revenue Office projected that Measure 91 would only generate about $17 million the first year while the financial firm ECONorthwest put the figure at $38.5 million.

After examining the evidence, the state’s financial estimate committee, consisting of members that included future Governor Kate Brown (then Secretary of State) and Portland mayoral candidate Ted Wheeler (serving as State Treasurer), voted to provide the $17 million to $40 million range. Since $3.5 million in taxed flower sales over 12 months equals $42 million, the committee seems to have picked a good range at first blush, with the state hitting just over the upper end. However, sales are likely to increase greatly once the adult-use commercial system is fully implemented.

Since $3.5 million collected from taxed flower sales doesn’t include any sale of infused-edibles or any other marijuana product, Oregon will see greater tax revenues in the future. With cannabis-infused edible making up nearly half of Colorado’s cannabis market, Oregon could easily double the tax revenue generated, if not even more (meeting the most optimistic projections) as consumers become more aware of tinctures, concentrates, topicals and the wide array of products that will be available.

The tax revenue generated doesn’t even take into account all of the benefits the state is experiencing, from the new jobs created; to fewer arrests and citations; to better prioritizing resources. Oregon has a long history as a trailblazer on cannabis, including producing some of the best cannabis in the world. While there are certainly growing pains as the state transitions to a regulated commercial system, the future is bright for the Oregon cannabis industry, so long as laws and regulations don’t unnecessarily stifle the burgeoning market. Prohibitionists often like to crow when tax revenues come in lower than some estimates, but they haven’t had much to crow about in that regard, so they will have to squawk someplace else.

 

Anthony Johnson

Anthony, a longtime cannabis law reform advocate, was Chief Petitioner and co-author of Measure 91, Oregon's cannabis legalization effort. He served as director of both the New Approach Oregon and Vote Yes on 91 PACs, the political action committees responsible for the state's legalization campaign. As director of New Approach Oregon, Anthony continues to work towards effectively implementing the cannabis legalization system while protecting small business owners and the rights of patients. He sits on the Oregon Marijuana Rules Advisory Committee and fights for sensible rules at the legislature as well as city councils and county commissions across the state. Anthony helps cannabis business comply with Oregon's laws and advises advocates across the country. He also serves as content director of both the International Cannabis Business Conference and the Oregon Marijuana Business Conference, helping share the vision of moving the cannabis industry forward in a way that maintains the focus on keeping people out of prison and protecting patients. He was a member of the Oregon Health Authority Rules Advisory Committee, assisting the drafting of the administrative rules governing Oregon’s state-licensed medical marijuana facilities. He first co-authored and helped pass successful marijuana law reform measures while a law student at the University of Missouri-Columbia School of Law. He passed the Oregon Bar in 2005 and practiced criminal defense for two years before transitioning to working full-time in the political advocacy realm. His blogs on Marijuana Politics are personal in nature and don't speak for or reflect the opinions of any group or organization.