Oregonians are set to vote on the legalization of marijuana for recreational use this November, but that hasn’t stopped some Oregon cities from passing taxation laws before the state vote occurs. Seems strange right? Not when tax revenue to your city government is at stake.
Measure 91, which would allow the legalization of recreational marijuana would bar local governments from placing a local tax on marijuana. The folks behind the “Vote Yes On 91,” campaign don’t want marijuana sales taxed at the local level, because lower-priced weed discourages purchasers from going to the black market for their goods. “We already have a marijuana market, it’s just an illicit market,” said Amanda Reiman, a policy manager at the Drug Policy Alliance. “Habits die hard. The price definitely makes a difference there.”
Most cities that are enabling this tax are placing it at 10% but others are taking a more extreme approach and placing the tax at 20% in an effort to push out dispensaries. Several estimates place tax revenue from legalized weed in the state between $17 and $40 million annually. If Oregon consumers react in the same manner as Colorado’s, we estimate that the state would bring in about $24 million a year. With that amount of money at stake, it starts to make sense why local governments are actively putting measures in place to secure their own financial success.
It’s still up in the air as to whether the state will grandfather in these local laws after the state initiative successfully passes. Measure 91 already proposes to allocate 10% of the total tax revenue from recreational marijuana to municipalities for local law enforcement. This begs the question of the need and efficacy of additional tax dollars being handed over to local governments due to their own decree.
Oregon cities are looking to cash in on the legalization of marijuana. Whether it they grab hold of this revenue via special taxes or permitting fees, they will most certainly reap the benefits of legalization at a local level.