Oregon State Cannabis Tax Revenue Surging
With recreational cannabis becoming legal in Oregon in 2016, many analysts predicted the tax revenue generated from its sale to be substantial. They were right. Oregon recently posted its 2019 cannabis tax revenue and the numbers have hit record highs.
Each year since cannabis has become legal in the state, tax revenue generated by the drug has climbed higher than the previous year. In 2019, Oregon posted a cannabis tax revenue topping $102 million, representing more than a 24 percent increase over 2018. Comparatively, cannabis tax revenue in 2017 – the first full year of legal recreational sale – amounted to $70.3 million. With 2020 posting record monthly sales earlier in the year, tax revenue from cannabis sales are predicted to surpass 2019’s banner figure.
Cannabis Tax Used To Fund Schools And Drug Treatment
As the tax revenue continues to climb, some wonder where all the money goes. The Department of Revenue breaks down its allocation of the cannabis tax revenue as follows:
- 40 percent to the State School Fund
- 20 percent to the Mental Health, Alcoholism, and Drug Services Account
- 20 percent to cities and counties
- 15 percent to Oregon State Police
- 5 percent to the Oregon Heath Authority for drug treatment and prevention
As you can see, the majority of legal cannabis tax revenue is used to fund public schools, with the second highest percentage going to mental health, alcohol and drug services. Looking specifically at schools, the tax revenue goes largely to fund district costs such as teachers’ salaries and textbooks.
It should be noted that the tax revenue generated by cannabis sales only represents a drop in the bucket when looking at overall public school costs in Oregon. Still, the revenue represents a consistent and increasing source of government funds that are being used for the public good.
Lastly, Oregon taxes retail cannabis sales at 17 percent. That figure, while considered high by some, is actually lower than some neighboring states where cannabis is also legal. In fact, the State of Washington imposes a whopping 37 percent tax on all retail cannabis sales.
Figures Predicted To Continue Rising
The Department of Revenue predicts revenue from cannabis retail sales to reach over $200 million by 2021. Sales are expected to grow to $282 million from 2021 to 2023. Those figures represent an increase despite prices of cannabis declining since 2017. Additionally, the recent figures do not take into account medical marijuana sales which have hovered around $60 million over the past three years. And with legislators paving the way for exportation, these numbers may rise to levels well exceeding analysts’ predictions if the federal government allows for interstate commerce of the drug.
