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Oregon: Marijuana Shoppers Adjust To 25% Sales Tax

OregonMarijuanaLeaf[TheMarijuanaReport]

By Steve Elliott
Hemp News

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: Medical Marijuana Dispensaries Struggle While Recreational Marijuana Skyrockets

TraciWatsonMaritimeCafe[KristynaWentz-Graff-Oregnian]

By Steve Elliott
Hemp News

A gold-rush mentality after recreational marijuana legalization in Oregon is part of what's leading medical cannabis dispensaries to close faster than ever.

Some medical dispensary owners had hoped that October 1, the day recreational marijuana sales became legal in Oregon, would be a saving grace for struggling businesses, reports Kristyna Wentz-Graff at The Oregonian.

"Most people are hanging on until the climate gets better," said Sam Heywood, co-owner of the Portland dispensary Farma, a few days before recreational sales went into effect. "If it didn't have that horizon where the regulatory climate is expected to improve, I suspect a lot of people would have given up by now."

But Donald Morse, director of the Oregon Cannabis Business Council, is skeptical cannabis will change the fortunes of struggling dispensaries. According to Morse, there seems to be a widespread expectation of making millions off Oregon's recreational marijuana market, but insiders say factors including over saturation, bad locations, amateurish business practices and the difficulty and expenses of running cash-only businesses are leading shops to close.

Outside companies are increasingly venturing into the recreational marijuana business, as well, putting more pressure on the existing medical dispensaries: competition. "The medical market will go away within a year," predicted Morse.

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