Tuesday September 18, 2018
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Oregon Expects Large Revenues in Marijuana Industry Over the Next Two YearsSalem-News.com Cannabis De-Classified
Marijuana (cannabis) is more "mainstream" every day, which means big bucks for business.
(SALEM, Ore.) - It seems as though the marijuana industry may act as somewhat of a windfall for the state of Oregon over the next couple of years.
With state taxes set at 17% of retail sale price, and the option for counties and cities to add a local tax of up to 3%, the revenue from taxes is expected to reach around $142 million over the next two years.
While these are numbers worth getting excited about, there are still plenty of hurdles and obstacles to overcome in the growing industry.
Looking to Other States
Because the industry is still so new in Oregon, those in the industry and in the government are looking towards other states as examples.
Massachusetts legalized marijuana back in November 2016 for recreational and medical use, which means it’s been legal for almost a full year at this point. There has been a lot of attention and coverage on the industry, and it will be probably the same in the next future.
Other states that are acting as examples are Washington and Colorado, where sales prices have actually fallen by 20% annually since marijuana was legalized. Obviously if sales fall, so do the tax revenues, which is something Oregon may end up facing too.
Experts believe the falling sales can be attributed to bottlenecks happening in the product testing and licensing chain, and regulatory changes that affect the production cycle. These factors are hard to predict since you don’t know when they may pop up or how long they will last.
On the flip side of things, marijuana may become more socially acceptable and mainstream, which could end up resulting in a big boost to sales. It’s an industry that is just very difficult to predict.
Other Determining Factors
Of course, there will be other determining factors that will play into how big or small the tax revenues are.
The government could decide to increase or decrease the tax, there could be other products that come into the industry such as accessories, equipment, and other products that will be under the same taxation umbrella.
It's also quite difficult to determine just how many people are currently employed in the industry. Currently the average salary for someone working in the legal cannabis industry as of 2016 was just $25,340.
Clearly this is something that could also change, and then attract more people to the industry.
How Technology is Affecting the Industry
As for the outlook for the industry, thanks to technology produces are able to start harvesting much faster and more efficiently. Take a look at the autoflowering cannabis plants.
These seeds make it possible to flower based on the age of the plant rather than worry about the light cycles. What this means is that you can produce a much faster harvest. With these seeds, a harvest can take as little as 55 days.
Obviously, this could drastically speed up how fast the product gets into the hands of customers, which will affect sales.
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