While the Oregon Office of Economic Analysis is waiting on a bill (SB 845) to become law, which would give them recreational marijuana forecasting responsibilities for the state, they’ve plodded ahead and issued their first official future-gazing cannabis report. Casting an eye forward, lead economist Josh Lehner has made predictions for Oregon marijuana sales and associated tax revenue.
Long story short, a Colorado-like boom (likely) looms
First things first, forecasting is not an exact science. So while many signs point to an Oregon marijuana sales boom, it’s not guaranteed (we’ll get into reasons for that in a bit).
But caution aside, there looks to be much opportunity for sizable industry growth across the state — enough for the treasury to pocket upwards of $156 million in marijuana taxes in the next two years.
Looking to Washington and Colorado for cues (both have a two-year head start on Oregon marijuana sales), Lehner anticipates similar positive trending. He argues that “as the market matures...the coming few years will see strong growth as the product becomes more widely available, more socially acceptable, and more black and gray market sales are realized in the legal market.”
In transaction totals, Lehner notes that Oregon marijuana sales surpassed Washington’s in its first year, resembling more closely Colorado’s totals when adjusting for population differences between those states. And if Oregon can enjoy a Colorado-like marijuana boom, that will yield numerous downstream benefits.
4 factors leading to impressive Oregon marijuana sales trends
Lehner says Oregon marijuana sales numbers were so striking because:
- Oregonians consume more cannabis than do Washingtonians, when adjusting for population discrepancies. This is probably because...
- Washington taxes marijuana at a higher rate than Oregon does. Lower taxes decrease final sale costs, which likely encourages additional Beaver State consumer purchases.
- The “cross-border effect,” wherein “Oregon had somewhat of a built-in customer base who were used to purchasing in the legal market” across the line in Washington. A testament to this is the fact that southwest Washington counties experienced a near 40 percent drop in sales once Oregon sales commenced.
- Oregon has enough dispensaries to keep a closer, though not quite in lockstep, pace with consumer demand.
Possible bumps in the road?
Ok, so getting back to the disclaimer from earlier, there are a few cautionary factors Lehner suggests could keep the marijuana boom from, well, booming as much.
The first has to do with supply limitations that would prohibit consumers from purchasing as much product as they’d like. Lehnen points to regulatory hurdles as the leading possible factor in this regard, as overburdensome rules could slow growers and marijuana processors from obtaining valuable licenses.
The second has little to do with Oregon itself. Rather, it’s Washington D.C. Lehner stresses that he doesn't feel a federal crackdown is highly likely, but he does warn that if one did happen it would wreck all rosy forecasting.
These possibilities aside, the future of Oregon marijuana sales looks good.