Oregon: Marijuana Shoppers Adjust To 25% Sales Tax
By Steve Elliott
Recreational marijuana shoppers in Oregon are taking a new 25 percent sales tax in stride, according to many dispensary owners and industry observers.
The state on January 1, after a three-month tax holiday, imposed the tax on recreational cannabis sales, reports Noelle Crombie at The Oregonian. The tax will eventually be replaced with a 17 percent sales tax, once the Oregon Liquor Control Commission takes control of the new recreational marijuana industry later this year.
While some customers have shrugged off the tax, "we have people that say they would rather go back to their 'guy,' so to speak, and walk out," said Matt Price, who owns the Cannabliss chain of dispensaries.
General manager Nathan Krytenberg at Glisan Buds and Foster Buds took the unusual step of absorbing the tax. He says his "strategic decision" should generate enough additional sales to cover the 25 percent hit.
Krytenberg said he hopes his move generates customer loyalty. More than 100 shops compete for cannabis customers in Portland, and there's a well-established black market, as well.
"To be quite honest with you, if we even take a small hit, I believe the fact that we are doing this will put us in a better market position," said Krytenberg. His Glisan Buds and Foster Buds shops sell marijuana for $9 and $15 a gram.
Oregon's marijuana shoppers have traditionally enjoyed some of the most reasonable prices on the Pacific Coast; California and Washington both have taxed and regulated marijuana markets, medical in California and recreational in Washington.
Oregon Department of Revenue officials said shops are free to absorb the tax, pass it along to the customer, or spread it among the grower, shop and consumer. They just want to make sure the tax is paid in full.
"We have no authority over pricing," said Julia Dodson, a spokeswoman for the DOR. "Dispensaries can charge whatever they decide."
The agency won't start collecting the tax until February. Only about half of dispensaries selling recreational weed have registered with the Department of Revenue so far, and this is required.
Graphic: The Marijuana Report