Recreational marijuana consumers in Oregon should prepare for sticker shock starting Monday when a 25 percent sales tax kicks in.

The Oregon Legislature this year signed off on allowing medical marijuana dispensaries to sell recreational pot to anyone 21 and older. Those sales, which began Oct. 1, have been tax free. But that holiday comes to an end Jan. 4, when the state will impose a sales tax that extends until the end of 2016.

The Oregon Liquor Control Commission, the agency regulating the recreational marijuana industry, isn’t expected to open stores until late 2016. Once the liquor commission’s program is up and running, the 25 percent tax will be replaced with a permanent 17 percent sales tax.

Meanwhile, Oregon Department of Revenue officials said Tuesday they are prepared to deal with the influx of large cash sums from dispensaries paying the new tax. Cameras have been added, employees have received training on security and a new “cash handling location” has been set up to accept large payments.

Marijuana’s prohibition under federal law has kept traditional bank generally off-limits to Oregon’s state-licensed growers and retailers. That means most of their transaction have to be done in cash.

The agency has also hired eight employees who will be charged with counting marijuana-related payments. Derrick Gasperini, a spokesman for the agency, said two people will be on hand to count up each payment.

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“There are always two people to make sure everyone is honest in the process,” he said.

Don Morse, who owns the Human Collective in Southwest Portland, said he hasn’t seen evidence of recreational consumers stocking up ahead of the tax. Then again, he said, recreational consumers typically buy smaller quantities of cannabis compared with medical marijuana consumers. Marijuana sells for between $5 and $12 a gram at his shop.

“Every time you go to a liquor store, you don’t buy a whole case of something,” he said. “You buy a bottle.”

While he doesn’t think the tax will discourage consumers, he is worried about keeping so much cash on hand each month to deliver to the state. Say he does $300,000 in sales in a single month. That translates into $75,000 in tax payments.

“That is a lot of extra month to keep on hand,” he said.

Starting Monday, what purchases will be taxed?

All sales of recreational marijuana. That includes flower, immature marijuana plants and seeds sold at dispensaries.

Will medical marijuana patients have to pay a tax?

No. Medical marijuana will remain untaxed. Only caregivers or medical marijuana patients may purchase medical marijuana at dispensaries.

How often will the state collect the tax?

Dispensaries must remit marijuana sales taxes every month.

How much does the state expect to collect?

A research report prepared in August by the Legislative Revenue Office projected marijuana sales will generate $2 million to $3 million in revenue in 2016. 

How will the state spend the revenue generated by marijuana sales?

By law, dispensaries are allowed to keep 2 percent of taxes collected. The Department of Revenue will also keep some to cover the cost of administering the tax. After that, the law says 40 percent goes to the common school fund, 20 percent to mental health, alcoholism and drug services, 15 percent to the Oregon State Police, 10 percent for city law enforcement, 10 percent for county law enforcement and 5 percent to the Oregon Health Authority for alcohol and drug abuse prevention, early intervention, and treatment services.

— Noelle Crombie

503-276-7184; @noellecrombie

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