Oregon Distributes Nearly $85 Million In Cannabis Tax Revenue This Week

SALEM, OR — Following two full years of legal and taxed recreational and medical cannabis sales in Oregon, the state Department of Revenue will this week finalize the first round of sales tax revenue distribution to Oregon's cities and counties, as well as specific government agencies.

The State School Fund, the Mental Health, Alcoholism, and Drug Services account, Oregon State Police, and the Oregon Health Authority will all receive a share of roughly $85 million in cannabis tax revenues, according to Department of Revenue spokeswoman Joy Krawczyk. All Oregon's cities and counties will also receive a portion, totaling about $17 million.

Previously, Oregon cities and counties that did not allow recreational or medical cannabis sales or industrial cannabis operations within their jurisdictions were not expected to receive any portion of the tax distribution. But House Bill 3470, signed by Gov. Kate Brown on Aug. 15, allowed for every city and county to benefit from sales that took place before July 1, 2017, based on population. Each city and county in Oregon is expected to receive 10 percent.

The city of Wilsonville, with a population of 23,740, expects to receive roughly $67,659, according to city spokesman Mark Ottenad. Wilsonville, however, currently has a ban on recreational and medical cannabis sales, and will only receive the first round of tax revenue distribution — unless, of course, the city certifies by Dec. 4 that it will no longer prohibit cannabis sales or operations.

All tax revenues collected since July 1 will only go to cities and counties that allow all medical and recreational cannabis operations.

From the Department of Revenue:

For cities, only municipalities allowing all license types are eligible for a portion of the 10 percent. For eligible cities, their share will be based on population (75 percent) and the sum of grower, wholesaler, processor, and retailer licenses (25 percent). For counties' share, half is based on the total available grow canopy area in the county and half is based on the sum of wholesaler, processor, and retailer licenses.
Counties that opt out of marijuana grows are ineligible for the part of the distribution based on grow canopy area. Counties that opt out of wholesaler, processor, or retailer licenses are ineligible for the part of the distribution based on license count.

Lake Oswego, Sandy, Sherwood, Fairview, and West Linn have also put prohibitions on cannabis operations.

The Department of Revenue collected $108.6 million in cannabis taxes between Jan. 4, 2016, and Aug. 31, 2017, Krawczyk said in a statement. Of that amount, $94.55 million was eligible for distribution, she said.

Repaying start-up and administrative costs sent nearly $10 million back to the Oregon Liquor Control Commission and Department of Revenue; the $85 million leftover was distributed as follows:

• 40 percent ($34 million) to the State School Fund;
• 20 percent ($17 million) to the Mental Health, Alcoholism, and Drug Services Account;
• 15 percent ($12.75 million) to Oregon State Police; and
• 5 percent ($4.25 million) to the Oregon Health Authority.

Legal cannabis sales in Oregon took effect Oct. 1, 2015, after voters approved Measure 91 in November 2014.

Visit the state webpage on cannabis tax laws and regulations for more information.

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