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Oregon’s Young Cannabis Market Already on Pace With Washington, Colorado

Published on June 9, 2017 · Last updated July 28, 2020
Medical cannabis buds in an open glass jar with marijuana flowers scattered aside and transparent lid on white background directly from above

After Oregon’s first year of adult-use cannabis sales, the state’s legal market is already on pace with more established ones in Washington and Colorado, a new report shows. Controlling for population, sales in Oregon have closely tracked Colorado’s and exceeded sales in Washington state.

That means big money for the state, with projected tax revenue during the Oregon’s first two years of operation—sales began in October 2015—projected to come in at upward of $60 million.

Those strong sales are expected to continue—and then some. Forecasts in the report, prepared by state economist Josh Lehner at the Oregon Office of Economic Analysis, indicate the state could rake in $156 million in cannabis taxes over the next two years—$80 million of which would flow into the state’s common school fund.

In his report, Lehner identifies several reasons why Oregon’s cannabis industry is already performing as well as Colorado’s or Washington’s despite its significantly smaller population.

First, more Oregonians seem to be regular cannabis consumers. Use rates from surveys show that,  compared to Washington, a larger share of Oregonians said they consumed marijuana during the past month. That’s not the only measure that matters, however, as an even higher rate of Coloradoans are regular cannabis consumers .

Also, while Oregon’s cannabis prices and taxes are much lower than in Washington—Oregon’s tax rate is 17%; Washington’s is 37%—that seems to have attracted more and bigger sales.

Oregon’s adult-use market also opened to significant demand. Prior to the launch of legal sales, data show that Oregonians swarmed to retail stores in southern Washington, for example in Vancouver, just a short drive from Portland.

Counties in the southwest corner of Washington saw sales fall by nearly 40% once Oregon’s adult-use sales began, according to the report. Lehner points out that the first set of quarterly tax returns—a very small data set, admittedly—indicates that Oregon prices were roughly the same as Washington’s, despite Oregon’s cannabis industry just getting off the ground.

Lehner also noticed a surge of retail stores opening in across the state, both in in major population centers such as Portland and in college towns like Eugene.

That’s backed up by our database here at Leafly. Not only are retail stores opening at a faster rate than in states like Washington and Colorado, but there are actually more active accounts in Oregon, which has 439, than Washington, which has 379. Of the three states, however, Colorado takes the cake on that front, with 616.

The full report and forecasted data are available on the Oregon Office of Economic Analysis website.

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Gage Peake
Gage Peake
Gage Peake is a former staff writer for Leafly, where he specialized in data journalism, sports, and breaking news coverage. He's a graduate of the University of Nebraska-Lincoln's College of Journalism and Mass Communications.
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