Cannabis Tax

Cannabis on a scale at Coastal Highways in North Bend. A bill approved by Coos County Commissioners is moving toward the house that would allow certain Oregon counties to set its own tax on recreational and medical marijuana growers.

COOS COUNTY — Coos County Commissioners approved writing a letter of support Thursday toward a house bill that would allow certain Oregon counties to set its own tax on recreational and medical marijuana growers.

The Law Enforcement Stability Act, HB 2382, states that qualifying counties will be able to tax marijuana production sites at a maximum of a $1 per square foot for its recreational farms. It will also allow counties to tax up $50 per plant for residents growing medical marijuana.

Josephine County Commissioner Dan DeYoung, who spoke with the board at its work session meeting, said the tax would be charged once a year when growers register their sites with the state and would act essentially as an added business license fee.

According to the Oregon Liquor Control Commission, as of Jan. 18, there are 22 licensed marijuana producers in Coos County. The goal of the proposed bill would be to provide law enforcement agencies with adequate, sustainable funding to crack down on illegal marijuana production sites, DeYoung said.

“Josephine and Jackson counties actually create and grow 40 percent of the marijuana that goes into the dispensary system statewide,” DeYoung said. “We have huge grows. About 80 percent of what we grow in both Josephine and Jackson counties goes directly to the black market.”

According to DeYoung, the bill would apply pressure to residents who are not currently registered and potentially operating an illegal grow site to register with the state.

The bill also outlines that the Oregon Health Authority (OHA) and the Oregon Liquor Control Commission (OLCC), both of which oversee marijuana operations throughout the state, provide qualifying counties with information related to people who are registered or licensed.  

For example, it mentions sharing information regarding licensee’s mailing address, location of grow site, identification as well data on maximum allowable grow size and marijuana plant count.

A recent Oregon Secretary of State audit found shortfalls in marijuana inspections from both OLCC and OHA agencies. According to the audit, only 32 percent of growers and three percent of retailers had undergone a compliance inspection with OLCC.

“The agency (OHA) has only four permanent staff to inspect roughly 14,000 grow sites and has struggled with decreasing revenue, turnover and performance management,” the audit said.

In their official response, both agencies generally agreed with the audit’s finding and are working to improve operations. According to DeYoung, ultimately the goal of the bill would be to support law enforcement agencies in eliminating the marijuana black market.

During the 2018 November general election, the county presented voters with an advisory question asking their opinion on whether or not Coos County should be able to tax commercial growing of recreational and medical marijuana. The final results showed 20,103 “yes” votes, or 71.03 percent and 8,200 “no” votes, or 28.97 percent.

At the last quarter, which ended in November, the county received a total of $92,810.47 in revenue from state marijuana taxes. According to DeYoung, if the new tax were to pass, Coos County would be looking at estimated collection of over $600,000. 

The proposed bill underwent its first reading Jan. 14 and was sponsored by Oregon Rep. David Brock Smith (R-Port Orford), Sen. Arnie Roblan (D-Coos Bay) and Sen. Dallas Heard (R-Roseburg.)

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Reporter Amanda Linares can be reached at 541-266-2039 or by email at amanda.linares@theworldlink.com.