So far in 2016 – up to July 31st – the state of Oregon has collected more than $25 million in taxes from legal marijuana retail sales. There was a time when the Oregon Liquor Control Commission had anticipated only collecting about $18.4 million over the course of two years.
This not only shows the way in which legal marijuana was underestimated in the state, it also highlights the folly of trying to predict tax revenues for anything. It is the height of hubris to pretend to know how hundreds of thousands of consumers are going to react to something.
Those of you who shop for legal marijuana in Oregon are probably aware that the taxes are relatively high – 25% on sales. This is eventually supposed to fall to the 17-20% range, which will likely have the effect of increasing total tax revenue collected. This is because lowering the tax will accelerate the price drop already happening with legalization; this, in turn, will increase sales as more consumers cross over from the black market to the legal one.
While I’m one of those people who wishes legal marijuana wasn’t taxed at all, it’s impossible to miss the result of stories like this: more people will be inclined to vote for legalization the next time it’s on a ballot in front of them. Instead of seeing “people wanting to get high” in their heads, they’ll picture new schools and money for law enforcement.
This will lead to more liberty for cannabis users, and that is always a good thing. The battle over keeping taxes to a minimum will always be a part of the marijuana industry, as it is for most other industries. But we have to make sure that a legal cannabis industry comes into being in the first place.