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Oregon Marijuana Legalization Study Predicts $38.5 Million In Taxes On $145 Ounces


new approach oregon marijuana legalizationA new study compiled by ECONorthwest has predicted that Oregon will reap $38.5 million in marijuana tax revenue in the first fiscal year of legalization.  The Control, Regulation, and Taxation of Marijuana and Industrial Hemp Act promoted by New Approach Oregon has qualified for the November election ballot and will cap the taxation of marijuana at $35 per ounce for flowers, $10 per ounce for leaves, and $5 per immature marijuana seedling.

The Act does not affect the Oregon Medical Marijuana Act, so researchers did not include the 64,000+ patients in their calculations.  In the first three years, analysts expect the legal market to capture 40% of Oregon’s current black market.  There are 436,000 adults 21 and older who are consuming marijuana on an annual basis, 314,000 who consume monthly, and 108,000 who consume at least two out of three days per month.  The study focuses mostly on that last category of regular users, who they estimate use on average 6.75 ounces per year.  Additionally, researchers predict 89,000 tourists and commuters consuming about an ounce per year, totaling 1.3 million ounces (or 36.85 metric tons) of marijuana consumption per year.

Previous research shows Oregon farmers produce about 72% flower and 28% leaf, so the $35/oz flower tax and $10 leaf tax works out to an average $28/oz tax.  Multiplied out to the 1.3 million ounces gives us the $38.5 million tax estimate.

Current prices for Oregon marijuana as averaged by ECONorthwest are $180 per ounce.  The study looked at the production costs at a typical 10,000 square foot indoor growing facility and found that marijuana could be produced for about $42 per ounce.  Outdoor growing on a quarter-acre farm reduces costs significantly to about $16 per ounce.  Assuming 80% outdoor production and 20% indoor production, analysts estimate the average production cost at about $27.50 per ounce.  After the average $28 marijuana tax and business income tax burdens under IRS Code 280E, the study predicts a 19.5% drop in Oregon marijuana prices to just $145 per ounce.

Source: International Cannabis Business Conference


About Author

Executive Director: Russ Belville has been active in Oregon marijuana reform since 2005, when he was elected second-in-command of the state affiliate, Oregon NORML. After four years with Oregon NORML, Russ was hired by National NORML in 2009, working as Outreach Coordinator and hosting the NORML Daily Audio Stash podcast until 2012. Since then, Russ launched the 420RADIO marijuana legalization network and is the host of The Russ Belville Show, a live daily marijuana news talk radio program. Russ is also a prolific writer, with over 300 articles posted online and in print in HIGH TIMES, Huffington Post, Alternet, The Weed Blog, Marijuana Politics, and more.


  1. Seeing as how medical Cannabis is already being produced by huge grows producing 100’s of lbs per year for $1600-$2200/lb, a 20-30% tax cannot reduce that price. Bigger markets won’t reduce the price. All the good growers are already spoken for. There is only so much they can do. Currently over half of the market is supplied by mediocre growers and the market is much smaller than its going to be. Those prices stated in the article won’t apply to top shelf. I think the author meant for mids that includes seeds (there will be no hemp bans for drug producers)

  2. Read the initiative; then read the EcoNW marketing report NAO funded to claim $38 million in taxes. Where do you think all that money comes from?
    The consumer. Don’t have to be a scientist to add up the money trail.

  3. Isn’t this money supposed to be paid to gangs via the black market and onto the drug cartels to cause havoc in Mexico, Central and South America causing violence and upheaval and massive youth migration north? And don’t forget the incarceration industry in the USA and the loss of retail drug criminals for the local police. Are we trying to disrupt this?

  4. I don’t watch Fox nor understand your point. If you have more compelling data share it. Christ. Everyone’s a critic but no one’s a scientist.

  5. It’s all about revenue my friend, not my “belief system”. Collection, enforcement, taxes…state stuff to please the moneyed interests. On the surface it’s based on legalization and the emotional response. Underneath, it’s full of holes.

    After lengthy conversations with Anthony Johnson, NA author and Bob Whelan, ECONorthwest study author,
    even they admit it. Download it and read it for yourself.

    BTW, most of my posts are in exchanges with local gasbags in Eugene who serve no other purpose than to tout their misogyny, racism, fear mongering, and hatred on the RG blog.
    I don’t back down.

  6. So what’s your problem? It’s a study based on information gathered from sources, other studies, and previous research. This is how every research study is done, in labs and colleges all across the world. If you’ve graduated from college, you know this. Are you saying the sources suck? I looked and it looks pretty standard, considering that this is a speculative report. Do the sources just suck because they don’t fit into your personal belief system? Well, I can find you sources to say anything, and I can twist them to fit anything, that is common in researching articles for a study. I can show you that pigs can even fly, if thrown hard enough lol. So it paints a rosy picture, sure, they weren’t doing a study on how the world is going to blow up and how awful it’s going to make Disavour’s life. It was a speculative study on a potential for revenue, that’s what the heck they were paid to produce. After seeing your posts on other pages, I’m just kinda curious why you’re consistently so negative about everything. On the other hand, it’s always nice to have dissenting voices to highlight problems :) Peace and prosperity brother :)

  7. Exactly, a best guess and not accurate at all and yes, it’s a free country to speak what you want whether or not its true.

  8. They are at liberty to make their best guess just like everybody else. This is a free country after all. At least in Oregon.

  9. Read it. The speculation continues as the study does not indicate the actual amount (hard to get) of cannabis grown in Oregon but relies on retail consumer studies(?)
    Paints a rosy picture but negotiating information sources is part and parcel to studies everywhere.
    Run down the sources they post and see the larger picture.

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