Recreational marijuana sales in Oregon are passing everybody’s expectations.
420 Intel reports:
Oregon brought in more than three times the expected amount of recreational marijuana tax money in the first month it was collected from dispensaries, potentially moving up when the state distributes revenue to cities and counties.
Officials estimated that January might bring in about $1 million in taxes, said Derrick Gasperini, communications manager for the state Department of Revenue. Figures released Wednesday by the department showed that the state collected $3.48 million in taxes for recreational marijuana sales in January. “It does exceed projections,” he said.
As part of a startup year for a recreational marijuana industry in Oregon, dispensaries selling medical marijuana that registered with the department were allowed to sell to recreational buyers. The state requires those dispensaries to charge a 25 percent tax on recreational sales. Medical marijuana sales in Oregon remain untaxed.
That could mean that the tax figures indicate that dispensaries around Oregon sold nearly $14 million worth of recreational marijuana in the first month of taxed sales, but Gasperini cautioned that the estimation could be incorrect.
“The Department of Revenue is not going to make any statements on sales until we have some (tax) returns,” he said.
The returns will be submitted by dispensaries later this year.
Dispensaries around the state that sell recreational marijuana collected the taxes in January and gave them into the state between Feb. 1 and March 4, according to the Department of Revenue. The department received 253 tax payments from the 309 registered to sell recreational marijuana that month in Oregon.
Eugene alone has 25 dispensaries registered to sell recreational marijuana, according to the Oregon Health Authority.Gasperini explained that not all those registered turned in tax payments because “they may not have made any (recreational) sales,” he said.
Price figures coming
A better financial picture of marijuana sales in the state should come after the end of the quarter, the first three months of the year, when he said the department will have more precise figures.
For now, he also did not have a breakdown of how much in recreational pot tax money was collected by each county.
“We are just looking at totals now,” Gasperini said, “not characteristic data.”
Once more detailed information is available, Sam Chapman, principal for New Economy Consulting in Portland, would not be surprised to see Lane County near the top of the list for counties bringing in the most recreational pot tax money.
“I’m sure that Lane County is bringing in a good chunk,” he said, “maybe right behind Portland and Salem.”
Chapman’s company helps clients find opportunities in emerging marijuana markets around the state.
Yet to be divvied up
Eventually, tax money brought in from recreational marijuana sales will be divided among a variety of accounts: 40 percent for the common school fund, 20 percent for mental health, 15 percent for state police, 10 percent for cities, 10 percent for counties, and 5 percent for the state Health Authority. But that is only after the cost of running the state recreational marijuana program is taken out of the tax revenue.
Before even reaching the point of distributing the tax money, the Department of Revenue and the Oregon Liquor Control Commission first must recoup their costs of starting up the program Gasperini said.
He did not have an estimate for those costs.
The cost of building the program is probably sizeable, said Mazen Malik, senior economist for the Legislative Revenue Office.
“The setup costs are a lot higher than the ongoing operational costs,” he said.
More taxes coming in than expected could accelerate the state’s move to dolling out the money.
Department officials had expected the first distributions to come in July 2017. Gasperini said now they very likely will come sooner.
The current tax model for recreational pot is only set to be in effect this year in Oregon. At the start of next year, retail outlets selling solely recreational marijuana can open. The state plans to tax them at 17 percent, with local governments able to add another 3 percent in taxes.