The cannabis industry and community operates in a surreal place of American society where people are considered legal and essential under state law, but still criminals under federal law. Cannabis prohibition at the national level has a disastrous history and it continues to harm too many people today. The harm done to the cannabis industry goes largely unseen as headlines about record-breaking revenue make the headlines while everyday Americans are unaware of the difficulties of operating a cannabis business, especially for mom-and-pops and locally-owned craft cannabis boutiques like Kind Leaf. The regulatory hurdles that eliminate banking services and amount to an effective tax rate of 70% or more, make it a minor miracle that any small retailer survives, let alone thrives, while multinational corporations buy up more and more companies and dominate the market share. To help support our small farmers and mom-and-pop shops, Oregonians need to contact their legislators and tell them to just say NO to higher cannabis taxes and oppose House Bills 2015 and 2294.
The Malheur Enterprise spoke with Ontario City Manager Adam Brown about how the city has allocated $20,000 to spend on a lobbyist in an attempt to raise local taxes from 3% to 10% on cannabis consumers:
“Lobbyists in Salem will know who the influencers are, the mavens,” said Brown, explaining why the investment is worthwhile.
Two years ago, Brown went to Salem with Mayor Riley Hill to advocate for a tax change, but they were unsuccessful.
Brown said that he would consider asking city officials in Portland to collaborate in funding the lobbyist, since the legislation would benefit them as well.
Now is not the time to raise taxes on cannabis. While the record-breaking sales and revenue over the last year have made for great headlines, they don’t tell the entire picture. It is increasingly difficult for small businesses like Kind Leaf to conduct business with multinational corporations. Adding a bigger tax burden will disproportionately harm small businesses and the poorest consumers, leading to less spending, more layoffs, and more buyouts by big companies. If we want to keep around craft cannabis boutiques at all, we need to defeat any tax hikes. Please contact your legislators. Here’s my comments to members of the Oregon Revenue Committee, who recently held a hearing on HB 2015, feel free to utilize as you see fit:
Chair Nathanson and members of the committee,
My name is Anthony Johnson and I’m urging you to oppose House Bill 2015 and House Bill 2294 as it is bad for the Oregon cannabis industry and our great state overall. I served as chief petitioner for the Measure 91 cannabis legalization law and a chief petitioner for Measure 110, the new law cited by many supporters of HB 2015 and HB 2294 as a reason to increase cannabis taxes. Frankly, the claims of those stating that a cannabis tax increase is needed are premature are best.
Regarding the changes in funding, it is important to note that those changes haven’t gone fully into effect yet, so the impact of Measure 110 isn’t fully known, and the different allocation doesn’t present the full picture. While M110 does indeed alter cannabis tax revenue distribution to mandate that revenue above $45 goes to fund drug treatment and recovery programs, the state initially projected that the tax revenue collected wouldn’t exceed $40 million, so localities are still getting the revenue expected when voters passed M91 in 2014. Further, the money going to treatment and recovery programs will greatly benefit cities and counties, helping fund services that are greatly underfunded. Additionally, there will be law enforcement and judicial savings associated with ending the arrest, jailing, and prosecution of thousands of Oregonians for minor drug offenses, eliminating costs for localities.
As Whitney Economics pointed out in its testimony, increasing cannabis taxes will hurt the cannabis industry, one of the few bright economic spots during our COVID economic crisis. The tax revenue collected is only a part of the picture as the industry has created jobs and generated revenue for our local communities. Increasing the price of cannabis will push consumers concerned about price into the illegal market or sometimes over the border to Washington State. While record-breaking cannabis tax revenue makes for good headlines, it doesn’t tell the entire story. Cannabis businesses, especially mom-and-pop shops and other small businesses struggle with the lack of banking services and exorbitant federal taxes.
Placing a burden on these hardworking Oregonians will lead to more multinational corporations buying up smaller retailers, squeezing out more Oregonians. And as The Willamette Week pointed out, the fact that dispensaries must be cash-only has made them a major target of armed robberies in the Portland area, with more than 100 robberies in the past year already leading to one tragic death. Placing an additional burden on these retailers and forcing them to have even more cash on hand, is simply unwise at this time.
Please don’t move House Bill 2015 or House Bill 2294. I’m happy to answer any questions that you may have.