The Portland City Council next Wednesday will consider enacting a 10 percent sales tax on recreational marijuana.
Portland would join the growing roster of Oregon cities approving a sales tax on the drug in advance of a Nov. 4 statewide vote on its legalization.
Portland commissioners won’t vote on a specific tax proposal until later this month, but Wednesday the council will begin debate on a 10 percent tax on the yet-to-be legalized retail marijuana and a 5 percent tax on medical pot.
City officials will also present a second alternative: a 5 percent tax on recreational marijuana with no additional tax on medical marijuana.
Commissioner Amanda Fritz said Tuesday she wouldn’t support a tax on medical marijuana users.
Thomas Lannom, Portland’s Revenue Bureau director, said the city didn’t have an estimate of how much money it could expect to collect under either tax scenario.
But money is driving Portland and another 17 other Oregon cities in enacting marijuana sales taxes ahead of the looming Nov. 4 statewide vote on Measure 91, which would legalize cannabis and bar local taxation of it.
There’s much debate on the enforceability of the cities’ taxes. Attorneys for some Oregon cities argue that municipal pot taxes will be grandfathered in if enacted before the election.
Supporters of Measure 91 say that’s not the case.
Marijuana is still illegal at the federal level, but the landscape of cannabis laws turned on its head in recent years with the rollout of recreational marijuana in Washington and Colorado.
In June, Mayor Charlie Hales’ office created an internal city task force to study how Portland could learn from Washington and Colorado’s experiences.
Portland, according to documents presented to the City Council Tuesday, is anticipating “at some point” Oregonians will legalize recreational marijuana. The Oregonian first reported Hales’ marijuana task force in July.
At a two-hour work session Tuesday, city commissioners discussed the sales tax options as well as how Portland could further regulate medical marijuana while also expanding those regulations to recreational pot. The city has concerns about public safety, the effect of the proliferation of retail stores on children and how and where residents can cook edible marijuana products.
Lannom said the ballot measure could bring in anywhere from $ 17 million to $ 40 million in revenue for the state. Some of that would be passed along to cities like Portland. Lannom said revenue estimates were “obviously unclear,” saying Portland may bring in $ 117,000 – $ 519,000 in revenue from the state tax on marijuana.
Without an additional tax, Lannom said, “it’s probably unlikely” the city will have enough revenue to offset the costs of regulating the industry locally.
Willamette Week first reported the 10 percent sales tax idea last week.
Beyond taxing the new industry, Portland is also considering capping the number of recreational marijuana retail locations in the city, expanding zoning restrictions for medical dispensaries to include 1,000 foot buffer zones around playgrounds and libraries, and limit the hours each store can remain open.
Three subcommittees (on use by minors, diversion/theft of medical marijuana, environmental and consumer safety) offered a series of recommendations to the City Council Tuesday. Here are a few examples.
- Create new inventory practices for dispensaries, retail stores
- Require mandatory buzz-in security for dispensaries, retail stores
- Require stores have permitted alarm systems
- Limit the number of times patient can receive 24 ounces of medical marijuana daily
- Prohibit manufacturing of edible products made with butane honey oil in private residences, unlicensed kitchens
Portland is expected to discuss the proposed sales tax on Oct. 15, but a final vote wouldn’t occur until the following week at the earliest.
— Andrew Theen