The 25 percent sales-tax break enjoyed by Oregon’s recreational cannabis consumers effectively ends Monday January 4, marking a new era in the state’s approach to marijuana.
The temporary, tax-free sale of recreational marijuana began in the Beaver State on Oct. 1 at the state’s medical marijuana dispensaries, which number over 250.
The tax is tied to preparations by the Oregon Liquor Control Commission — the state agency tasked with recreational marijuana regulations — to open stores throughout the state. Upon the opening of the recreational retail outlets licensed by the commission in late 2016, a permanent 17 percent sales tax will be imposed in the place of the 25 percent.
There are plans to make the year’s extra funds count. According to the Oregon Department of Revenue, the funds are to be allocated towards such initiatives as employee security training, increased use of security cameras, and new ventures dubbed “cash handling locations,” that would be prepared to accept large cash payments to the state. Most of the state’s transactions involving medical marijuana take place in cash, since the federal ban on recreational pot has led to many traditional banks steering clear of the state’s sanctioned retailers and growers.
According to Don Morse, owner of the Human Collective in Southwest Portland, the tax hike is unlikely to seriously affect most recreational consumers, or to have led to consumers stocking up on cheaper products ahead of the tax’s institution. This is because, unlike medical marijuana consumers, those purchasing recreational cannabis rarely buy it in large quantities.
“Every time you go to a liquor store, you don’t buy a whole case of something,”
Said Morse. “You buy a bottle.”
Morse does not believe consumers will be discouraged. In fact, he may run into a different problem, as the change will force him to keep large amounts of money on hand. “That is a lot of extra month to keep on hand,” he said.