Measures the change in selling prices received by domestic producers of goods and services. No additional tax upon the centralized 4% tax that is collected and distributed to localities. Learn more about adult-use cannabis via the Oregon Department of Revenue, and more about the medical program via the Oregon Health Authority.

Taxpayers Shoulder a Heavy Burden for Sports Stadium Subsidies

Due to the lack of federal recognition over the legality of cannabis, state laws and regulations vary, meaning there’s no single model for revenue collection from medical or recreational dispensaries. Cannabis taxes fund a wide range of public initiatives, from healthcare to law enforcement. Several important lessons emerged from Partnership Accounting the rollout of marijuana laws and the adoption of legal markets. The authors found an average testing cost of $136 per pound of dried cannabis flower.

The Impact of State and Local Taxes on Cannabis Businesses

In addition, agents learned Shirley intentionally underreported lease online bookkeeping income by more than $1 million, resulting in more than $290,000 in unpaid taxes. MEDFORD, Ore.—A Josephine County, Oregon man was sentenced to federal prison Wednesday for illegally manufacturing marijuana and filing false tax returns with the IRS. 8 Estimated from a survey of the economic literature on price elasticity of marijuana consumption. As the industry continues to grow despite these challenges, stakeholders must remain vigilant in advocating for change while exploring alternative solutions at both state and federal levels.

Federal Impact

This difference in price levels among states impacts the excise tax rates if the strategy is to convert users from the illicit markets. Marijuana flows, like cigarettes, from lower-priced markets to higher-priced markets. A well-designed sales tax is levied on all final consumer goods and services while exempting all purchases made by businesses that will be used as inputs in the production process. Minnesota enacted a legalization measure of sorts by passing a law allowing 5 mg of hemp-derived THC, the primary intoxicant in marijuana, in individual products and up to 50 mg of THC per package. The regulation of hemp products is often a gray, unregulated area in state policy that is receiving growing attention.

Though originally intended cannabis accounting to start in 2018, there is still no operational market in the state of Maine. In 2017, Governor Paul LePage (R) vetoed a bill (LD 1719) to regulate and tax marijuana, which the legislature later overrode, but the process postponed the launch. Since then, the legislature has passed the final rules for regulation and taxation, and the Office of Marijuana Policy has begun to issue licenses. Tax revenue grew quickly in the first years after legalization—outpacing projections made by state forecasters—but growth has slowed as the market matured.43 Nonetheless, Colorado is on track for more growth in FY 2020.

A Road Map to Recreational Marijuana Taxation

• Under federal law, cannabis is a Schedule 1 controlled substance, and anyone involved in its distribution is, all else equal, a drug dealer subject to severe criminal penalties.
• Nevada and Colorado have solved this by levying the wholesale ad valorem tax based on a temporarily fixed value per ounce.
• Alaska, California, Illinois, Montana, New York, Oregon, and Washington use a portion of their cannabis tax revenue to fund programs for substance abuse and drug education and prevention.
• Medical marijuana is legal in 37 states and the District of Columbia, and some of these states levy a tax on the purchase.
• However, all medical marijuana accessories including but not limited to the list below are subject to sales and use tax.
• One of the reasons that specific taxes can be advantageous is that they generally are more stable because they are not affected by changes in consumer brand preference or retail prices.

Four marijuana stores opened in late 2023, with the other six receiving opening extensions of up to an additional year. Four more stores opened in 2024, with the final two shooting for early 2025 openings. The drop in cannabis revenue compared to projections is not affecting that project, Welch said. A colorful painted mural inside the Grand Junction Greenery welcomes customers to the third retail marijuana dispensary to open in Grand Junction. Part of the process in applying for a license/permit will require a tax clearance review from the Department of Revenue.