Favorable Funding

Oregon had record breaking sales during the first year of its recreational cannabis program. With all cannabis products sold at a 17 percent sales tax, the state government brought in an unprecedented amount of new tax revenue. For months, Oregonians have been waiting to find out how the nearly $85 million in cannabis taxes would be spent. The Oregon Department of Revenue announced its plans in October to finally distribute all funds collected since the legalization of recreational cannabis began in 2016. Almost $10 million was skimmed right off the top of the total revenue and was shared between the Oregon Liquor Control Commission, which will continue funding the regulation of the industry, and the Department of Revenue, which pays to collect the taxes in the first place.

“The governor’s proposed budget for next year replaces the General Fund that the Health Systems Division uses to pay for alcohol and other drug treatment services with marijuana tax funds.”

The biggest portion of the remainder of the revenue was given to Oregon’s State School Fund, which received 40 percent. It was reported that 20 percent was given to mental health, alcoholism and drug services, and 15 percent went to Oregon State Police. The last five percent was given to the Oregon Health Authority (OHA), still a very large $4.25 million. Oregon lawmakers hope to encourage other states to legalize cannabis after they see what great things the tax revenue can do for education and public safety.

CULTURE spoke with Jonathan Modie, the communications officer for the Oregon Public Health Division, a division of the OHA that works to protect Oregonians and keep us healthy across the state. Modie gave us a glimpse into the OHA’s plans for the new funding. “The governor’s proposed budget for next year replaces the General Fund that the Health Systems Division uses to pay for alcohol and other drug treatment services with marijuana tax funds. This means that the marijuana dollars will pay for programs already in place that provide alcohol and other drug treatment services,” Modie added. “While these programs are already in place, they have not previously been paid for with marijuana tax dollars, as OHA has not yet received any of these funds.”

The $34 million going to Oregon Schools has been rerouted in a way that will have much more of a direct impact on school districts. The money was originally supposed to go the Common School Fund and eventually be redistributed to specific districts. Beginning this year, however, the money will go directly to Oregon school districts through the State School Fund. This change allows individual districts to decide where they need the funding most. Interestingly enough, however, the only districts that won’t be getting any cash flow from the State School Fund are the very districts where voters chose to vote against legalization.

Local governments within districts that are home to legal cannabis businesses can count on a portion of the 17 percent sales tax charged for cannabis purchases, but those that have banned processors, retailers or wholesalers of cannabis won’t ever see any of that revenue. For everyone who voted to legalize cannabis in Oregon, and especially for consumers who regularly pay 17 percent on the dollar for their cannabis, it is quite refreshing to see all the tax revenue that has been collected being used to better our state.

Even those who don’t use cannabis but support legalization can feel satisfied that voters have created a new source of funding for education, health and safety services in Oregon. Systems can continue to operate and regulate, and Oregonians can count on a government that knows how to prioritize and allocate funding in a way that benefits everyone.