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Oregon’s Actual Tax Revenue from Marijuana Sales Blowing Away Original Estimates

Oregon generated $60.2 million in tax revenue from recreational marijuana in 2016, meaning the state pulled in an estimated $241 million in sales.

The marijuana market in Oregon produced $60.2 million in state tax revenue in 2016, the first year of state-taxed adult use cannabis sales. Mazen Malik, senior economist for the Oregon Legislative Revenue Office, had originally estimated that marijuana sales would produce $44 million during the year, $16 million below what was really generated.

“The (marijuana tax) numbers… suggest very strong collection,” said Malik. “Thus it suggests that the transition is being implemented successfully and the consumers are continuing to buy at the rate we saw last year.”

The Legislative Revenue Office’s original estimate of the marijuana tax revenue the state would generate since sales began October 2015 through June 30 of this year was $8.4 million. Last May the office adjusted its estimate, quadrupling it to $35 million, but the actual total marijuana tax revenue has already nearly doubled that revised amount, with five months left to go.

For much of last year, Oregon imposed a 25 percent sales tax on recreational sales at medical marijuana dispensaries. In October 2016, recreational retail stores opened and the state started imposing a sales tax of 17 percent.

Despite the drop in tax rate, revenue has continued its pace. The Oregon Department of Revenue announced recently that it had collected $5.3 million in marijuana tax payments in January from over $20 million in recreational sales. Recreational marijuana retailers in Oregon sell about $7 million worth of cannabis every week, and the number of recreational retail stores is growing steadily, up from 232 at the end of the year to now 288.

Recreational and Medical Marijuana

Oregon’s legal cannabis market has also generated at least 12,500 jobs, according to economist Beau Whitney of Portland, and Gov. Kate Brown has said that the current administration’s suggestion that it will crack down on the adult use market goes against its own goals of giving states more power, improving the economy, and creating jobs.

In a recent interview, Brown told the Trump administration to, “Let our people grow these jobs”

“This administration very clearly wants to grow the economy and create jobs, and the other piece that they want is to have the states be the laboratories of democracy,” Brown said. “There is no better type of laboratory than the initiative process, and voters in Oregon and Washington and California and Alaska and Nevada, and there’s a few other states, have voted to legalize marijuana. On the West coast alone, that’s 49 million people.”

Oregon State Rep. Knute Buehler (R-Bend) recently released a prepared statement, urging federal authorities to not attempt to crack down on the state’s legal market.

“I hope the new President and Attorney General keep their hands off Oregon’s marijuana law,” Buehler said, in a news release. “They should respect the will of the voters and honor state’s rights. Federal intervention will only make a legal market a black market once again.”

Oregon lawmakers have already introduced legislation that would protect the personal information of marijuana customers from the federal government.

Oregon is one of eight states to legalize both recreational and medical marijuana. The U.S. cannabis market is growing faster than the dot-com boom of 2000, according to a recent report from ArcView Market Research, and by 2020 is expected to create nearly 283,422 jobs nationwide.

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Post by Eve Ripley

Eve is a writer specializing in cannabis education and editorials related to cannabis industry news.

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