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Lighting up the cannabis tax facts

Commentary
April 19, 2019By Daniel Hauser

“Where is all that money from cannabis taxes going?” It’s a question we hear often. And it’s a fair one, given the proliferation of pot dispensaries since recreational use became legal.

Tomorrow being 4/20, there’s no better time to kick back and roll up the numbers on Oregon’s cannabis tax.

Oregon’s state tax on cannabis brought in about $96 million in the 12-month period ending February 2019. To put that in perspective, the state tax on cannabis brings in about 1 percent of the amount that the personal income tax — the biggest source of revenue for the General Fund (the “state budget”) — generates in a year. Cities and counties collected about $15 million over the same time period, bringing the total revenue to almost $111 million.

Lawmakers can’t spend the revenue raised by the state’s cannabis tax at will. Instead, the money is dedicated for specific uses. Forty percent of the state tax goes to the Common School Fund, the earnings from which go to Oregon schools. The rest of the state tax goes to mental health treatment, drug abuse prevention, and law enforcement services at both state and local levels. The city and county cannabis tax is spent at the discretion of those local jurisdictions.

In sum, while the cannabis tax is helping to fund important services, it is not the potent revenue strain that some have imagined.

Posted in Taxes.

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