Pot Of Gold

A marijuana advisory committee formed by Mayor Charlie Hales in June will recommend to the City Council that the city impose a 10 percent sales tax on recreational pot, WW has learned. Hales' office confirms that figure.

The recommendation could be made public Oct. 7, with plans to approve such a tax before the Nov. 5 statewide vote on Measure 91, the marijuana legalization initiative.

The measure would put marijuana sales under state control and taxation, much like liquor sales.

As WW first reported in July, the committee began considering a local sales tax on legal weed to be added on top of state taxes (“Don’t Bogart That Tax,” WW, July 30, 2014). 

Since then, Oregon has grown crowded with cities planning their own pot taxes. At least eight cities, including Milwaukie and Happy Valley in Clackamas County, have passed a local tax, and another 10 are considering such a tax.

Passing the Portland tax before the statewide vote on Measure 91 is key, because the measure bars local governments from passing additional taxes on legal weed. 

Portland officials say they hope to tax weed to pay for the new costs of inspecting and policing dispensaries. 

"We are trying to ensure that if and when recreational marijuana is legalized, we have all the tools in place for a smooth implementation," says Josh Alpert, Hales' director of strategic initiatives. "We want to make sure there is a revenue component in the discussion."

State estimates say legal marijuana could generate anywhere between $17 million and $40 million annually.

Most cities that have already approved a local tax have set it at the 10 percent rate Portland is weighing. A few cities, such as Sandy and Scappoose, have passed 20 percent taxes in hopes of driving medical marijuana dispensaries out of town. 

But city governments may never see those tax dollars. Municipalities would need to win a legal battle over whether their local taxes could be applied to the ganja business. 

The measure's backers don't want weed taxed locally, because lower-priced weed taxed only by the state would compete more effectively with black-market dope that legalization is supposed to undercut. "We already have a marijuana market, it's just an illicit market," says Amanda Reiman, a policy manager at the Drug Policy Alliance. "Habits die hard. The price definitely makes a difference there."

And weed's legalization is no sure thing. A statewide poll of likely voters released last week by KATU-TV shows support for Measure 91 at 44 percent, with opposition at 40 percent—well within the poll's 4.2 percent margin of error. 

Peter Zuckerman, spokesman for the Yes on 91 campaign, says he's paying more attention to legalizing pot than to who will get to tax it.

“We’re more focused on winning the campaign,” Zuckerman says. “I don’t think local taxes will survive in court.” 

WWeek 2015