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Oregon Pulled in Nearly $60M in Recreational Cannabis Sales Through May

The state of Oregon collected nearly $15 million in tax revenue from $60 million in recreational marijuana sales between January and May 2016. Although adult use sales began last fall, the state only began applying a sales tax since the start of the year.

Oregon dispensaries sold close to $60 million in adult use marijuana during the first five months of 2016, based on estimated data provided by the state.

The estimated sales value is based on the recreational marijuana tax paid by retailers for sales between January 1 and May 30. The state received $14.9 million in recreational tax payments as of the end of May, according to the Oregon Department of Revenue.

Oregon began recreational marijuana sales October 2015, but sales taxes weren’t applied until January 4. Since the beginning of the year, sales were temporarily taxed at 25 percent, but that tax will eventually be replaced with one between 17 to 20 percent later this year when the Oregon Liquor Control Commission assumes control. The base sales tax was set to 17 percent by the legislature, but cities and counties are allowed to adopt ordinances to add up to an additional 3 percent tax.

The collected tax revenue blows out initial estimates. The Oregon Liquor Control Commission had projected recreational marijuana sales would bring in $10.7 million in revenue for the 2015-2017 biennium.

Using the state tax values and with adult use marijuana retailing at about $5,000 per pound, as reported by The Register-Guard, one could calculate that the state of Oregon sold about 12,000 pounds of recreational marijuana from January through May.

Recreational sales and therefore tax revenue for the state are expected to see further growth as the year goes on. Dispensaries began selling limited cannabis edibles and concentrates to adult use consumers on June 2. Although numbers are not yet available, the new cannabis product choices have been an additional boon to sales, Oregon Live reports. Right now marijuana consumers are limited to a single edible with up to 15 milligrams of THC and a single portion of cannabis concentrate, and up to a quarter ounce of flower. These limitations will be increased or lifted once the state’s official recreational marijuana marketplace, complete with seed-to-sale tracking, opens later in 2016.

New Economy Consulting and Whitney Economics’ recently published “Oregon Cannabis Jobs Report” found that the cannabis industry has created approximately 2,156 new jobs and $46 million in wages in the state of Oregon. The report estimates that the industry will have an overall economic effect of $196 million by 2017. Oregon has received 1,103 marijuana license applications as of July 1.

Under Measure 91, the legislation that Oregon voters passed in 2014 to legalize recreational marijuana to adults over 21 years of age, 40 percent of tax revenue goes to Common School Fund, 20 percent to mental health alcoholism and drug Services, 15 percent to state police, 10 percent each to counties and cities for enforcement of the measure, and 5 percent to the Oregon Health Authority for alcohol and drug abuse prevention.

To learn more about Oregon’s recreational cannabis program, visit our education page.

Post by Jeffrey Stamberger

Jeffrey writes media content covering the latest in news, medical research, policy changes, and product education from the cannabis industry.

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