Legal pot: Oregon expects far less tax revenue than Colorado, Washington – Portland Business Journal (blog)
Graphic by Hannah Hitchcock
The latest marijuana sales forecast is in, and one thing is apparent: Oregon’s move to legalize the drug won’t exactly provide a flood of tax revenue.
The Oregon Liquor Control Commission, the agency that will oversee implementation of the state’s Measure 91 recreational cannabis law passed by voters in 2014, anticipates $18.4 million in tax revenue for the two-year period beginning in July.
That’s a far cry from the $78.7 million projected by research firm ECONorthwest in a study conducted last July. But the discrepancy requires some explanation:
“The OLCC has learned a lot about marijuana and the marijuana market since the measure passed last November,” said OLCC spokesman Tom Towslee in an email. “This is just an estimate for 2015-17 and the OLCC will only see revenue from license fees and applications starting in January 2016… [we] don’t expect to see retail recreational marijuana outlets open until the third quarter of 2016, at best.”
In other words, the numbers are apples and oranges.
The state’s new projection has been sent to the Oregon Legislature along with a request for $10.5 million to implement the new law. A special joint committee is reviewing all marijuana-related items in Salem to keep the state organized. It’s an effort lawmakers hope will help Oregon avoid the pitfalls Washington experienced when retail shops opened last summer amid supply and demand problems.
Colorado, which has experienced growing pains of its own, collected $56 million in tax revenue from the sale of recreational marijuana in 2014. It’s important to note that the tax structures in place in Colorado and Washington are far different from how Oregon will tax marijuana.
Towslee added that OLCC expects revenue to increase once Oregon has a full year of experience selling legal marijuana under its belt.
Mason is the Portland Business Journal’s Interactive Editor, overseeing new media initiatives and aiding the daily digital news operation.