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Pot Sales Tax

This past month Oregon has put into place its Pot Sales Tax, and it has far exceeded projections. The state’s Department of Revenue has reported generating nearly 3.5 million USD in tax revenue just from their first month alone. These numbers surpassed even Colorado and Washington’s numbers who were the first of the states to legalize commercial distribution of Cannabis to adults.

Cannabis has been legal to purchase by adults above the age of 21 since Oct. 1, 2015 and for the first three of those months the plant remained untaxed. A 25 percent sales tax went into effect on January 1, which is waived for users that have a medical card. The revenue was projected at a mere 8 million USD over the first two years by the Oregon Liquor Control Commission, and January’s numbers have blown this projection right out of the water. Much of the success is due in part to Oregon’s slow approach at legalization, giving businesses plenty of time to set themselves up in preparation for the month.

The state is still reeling from these unexpected sales figures, which more than tripled their expectations, and a better picture of the financial details in incoming at the end of the first quarter when the Oregon department of revenue will have more precise figures. Hopes are that this unexpected sales hike will lead to a quicker recoup of the startup costs allowing more contributions to be given out at a higher amount and faster than expected. The break down for where the tax money is headed is as follows: 40 perfect to the common school fund, 20 percent to mental health, 15 percent to state police, 10 percent for cities, 10 percent for counties, and 5 percent for the state Health Authority. This will only be distributed once the cost of running the state recreation marijuana program is covered.

 Currently there are only three states that have policies like this – Washington, Colorado, and Oregon – though hopefully more follow suit with income like this available. The tax structures vary from each state, but all make sure their funds go to benefit similar programs – Schools, drug and alcohol counseling, and law enforcement. When Colorado opened its recreation sales in January 2014 they hit 2.9 million USD in taxes from the first month, while Washington started out with only 18 stores licensed to sell they still yielded 1 million USD in tax back in August 2014.

Even though Federal prohibition against Cannabis as a Class 1 substance, Alaska plans to open its doors to recreation Cannabis sales by the end of this year while the District of Columbia plans to have legalized recreation Cannabis as well but a congressional bill passed last year has stopped the sales of the substance until 2017 or later.

These numbers are looking good for the future of legalization in the US, and eventually the rest of the world. Excitement is one way to put it looking at a bright future and lack of prosecution over this plant.