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Oregon Cannabis Prices Drop, While Sales and Tax Revenue Rise


Oregon has long been known as a cannabis consumer’s paradise with high-quality products and relatively low prices, even before the state legalized in 2015. By decriminalizing possession in 1973, allowing for medical use in 1999, the Beaver State has been a pioneer implementing progressive policies. The state’s politics, coupled with some of the best outdoor growing conditions in Southern Oregon, created a thriving market that would make just about any connoisseur salivate. After three years of legalization, prices have dropped even more, creating an even bigger buyers’ market, increasing sales and tax revenue for the state.

With the price per gram dropping from an average of $10 to $4 at the retail level, some might expect for the state’s tax haul to drop, since the 17% rate is based on sale price, but consumers are taking advantage of the deals, and the revenue generated continues to exceed expectations. Koin 6 reported:

Altogether, Oregon consumers are projected to pay $176 million in state marijuana taxes during the current budget cycle, which ends in mid-2019.

“Since Oregon levies its recreational marijuana tax based on the price of the product, the fact that actual tax collections have exceeded expectations is all the more impressive given the ongoing drop in prices,” state economists said in a revenue forecast report last week. “For every ounce sold, or every edible purchased, Oregon is receiving less tax revenue per item due to the price decline.”


In the long run, state economists say that cannabis could continue to have an economic impact through high “value-added products like oils, creams and edibles, in addition to niche, specialty strains” — a bit like the state’s craft beer industry.

Oregon bases its budget cycle on a two-year biennium, so the $176 million projected for 2018 equals $88 million per year when the state first expected to only make between $13 to $40 million when Measure 91 was first placed on the 2014 ballot. While these low prices are great for consumers and the extra tax revenue are helping fund our schools and drug treatment services, they provide plenty of challenges for businesses trying to compete in an ultra-competitive market.

It is imperative that smaller businesses find ways to market their businesses like the state’s craft beer companies have. Legalizing consumption lounges and advertising cannabis-destination experiences could be one way for craft cannabis businesses to succeed, along with legalizing exports. The challenges are vast, but with consumers continuing to make a record-number of purchases (we’ll see how retail stores turn Black Friday into Green Friday), the opportunities are great as well.

If you want to learn the latest about how to succeed in the cannabis industry, the International Cannabis Business Conference is the event for you. The ICBC will be heading to San Francisco, California, on February 7-8, so get your early-bird tickets by January 18th to save and secure your spot as the conference is expected to sell out. After San Francisco, the ICBC heads to Barcelona, Spain, on March 14th, and then will be returning to Berlin, Germany, on March 31st-April 2nd. Stay tuned for more exciting announcements in the near future!


Black Friday, craft cannabis, Green Friday, Measure 91, Oregon