One thing that everyone is looking at, whether they approve of marijuana use or not, is the amount of revenue coming out of the legal sale of cannabis. After all, the market is big and clearly it’s only going to grow – this can give states trying to legalize a bit of an advantage that the 4 states who have already legalized didn’t really have – proof of a large amount of tax revenue. Just looking at the amount of money made by the industry in a single state should be enough to convince people to take it out of the hands of black market drug dealers and cartels.
The state of Oregon legalized adult use of cannabis in 2014 – in October of last year, adults were able to purchase it for the first time legally from medical marijuana dispensaries. Those last few months of 2015 were tax free – but as soon as January 1strolled around medical marijuana shop owners were required to pay a 25% tax on all recreational sales. From January until the end of May the only product sold to adult consumers was cannabis flowers – and in limited amounts. In that amount of time the state brought in $59.6 million in revenue – and of that $14.9 million was paid in taxes.
Looking back at the last two months however, the industry has exponentially boomed – which could be largely due to the fact that June 1st was the first day that edibles, concentrates and lotions were on sale to adult consumers. Within the months of June and July alone, sales jumped to $42.4 million – more than two thirds of what they made during the previous five months. Of that, they had to pay $10.6 million in tax revenue for those two months. Even though there is no sales information available to show that the addition of these other products caused the spike, I would say it’s pretty clear it made an impact.
“We have seen an increase (in recreational marijuana tax payments), but we don’t have the data yet to really know what might be contributing to that,” Department of Revenue spokeswoman Joy Krawczyk said.
Tax revenue from recreational cannabis sales in Oregon will go to the common school fund (40%), mental health, alcoholism and drug services (20%), state police (15%), cities for enforcement of the measure (10%), counties to enforce the measure (10%) and lastly to the Oregon Health Authority for alcohol and drug abuse prevention (5%). With the largest portion going to schools, seeing these high numbers so early in the game is definitely going to be a long-term benefit to the state.
They have even changed their prediction for tax revenue in 2016 – their original estimate was $8.4 million (far exceeded in June and July alone) and the new estimate is $35 million, which my guess is probably still far underestimated looking at the present sales. Of course, this will go down slightly when the tax drops from 25% (during the early-access program) to the 17% it will be for retail dispensaries (however, if prices drop with the sales tax drop then people may buy more, so it could stay relatively close) – but only time will tell on this issue. The state is preparing to have licensed retailers ready for the recreational market to transition this fall, by the start of 2017, medical marijuana shops will no longer be selling cannabis to the general public.