Oregon to Decide on Recreational Cannabis Legalization this November


marijuanaThis November, Oregon voters will decide whether or not to join Washington and Colorado in legalizing the recreational use of marijuana. A new analysis says legalization there could lead to an additional $38.5 million in tax revenue for the state within the first year, and with lower taxes there than neighboring Washington, it could mean a competitive marketplace for the budding trade.

The proposed ballot initiative would offer marijuana to Oregon adults for as little as $140 an ounce. This stands in stark contrast to the up to $700 per ounce Washingtonians are paying just one state over, and it’s largely because of the taxes.

Washington residents already shop in Oregon when possible because taxes there are lower. When it comes to cannabis, the same price incentives could lure shoppers from across the border.

The Oregon Cannabis Tax Revenue Estimate expects around 1.3 million ounces could be sold within the first year. That’s about 86,000 pounds. With an average tax rate of $28 per ounce, the state could made $38.5 million in 2017, which is when the measure would take effect.

As the Oregonian reports, the estimated revenue isn’t huge, but it is a significant amount, representing nearly a quarter of the annual budget for the state police there.

“If such pricing is in place when Oregon stores open, Oregon sales and tax receipts from marijuana bought from Washingtonians may be substantially higher than shown in this analysis,” the study says.

The $38.5 million is about two-thirds of what Oregon currently collects on non-cigarette tobacco taxes. But whereas tobacco use is trending downwards, a legal cannabis market could prove to have long-term growth.

The estimate doesn’t include the savings that legalization could bring to the state. Arrests, court costs, and other cannabis enforcement efforts would shift. Though marijuana possession in Oregon is currently only punishable with a civil fine, the costs of exercising prohibition on any level remains high.

Peter Zuckerman, a spokesman for New Approach, which is sponsoring the marijuana measure, said the bottom line of the study is that legalization would “generate tens of millions of dollars for public services…and right now a lot of that money is going into the black market.”

Looking forward, advocates believe Oregon could become a major exporter of cannabis as legalization efforts spread across the country. Not only because of tax benefits, but because of the favorable growing conditions in the state.