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Local Cities Debate Marijuana Taxation

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GOLD HILL, Ore. – Brie Malarkey assists a flood of customers at her dispensary, Breeze Botanicals in Gold Hill. Her patients are the first in Jackson County to pay a sales tax on marijuana.

And in her first three weeks of business, they generated a lot.

“We were able to return $1,800 dollars to the city council from patients,” said Malarkey.

The tax, a response to concerns from the community, is now the sole source of revenue for the city’s still non-existent public safety department.

And while it’s still uncertain whether or not sales will continue at the same rate, city leaders say early signs are positive.

“If this revenue stream is somewhat constant, we’re talking about paying for half a cop,” said City Manager Rick Hohnbaum.

But that revenue stream could soon be off the table for other cities thanks to the same measure that would make recreational pot legal in November. That measure, proposed by New Approach Oregon, would give the state exclusive rights to determine tax rates across the board.

Now cities like Central Point, Eagle Point, and Medford are among those hoping to pre-empt that measure.

In Central Point, the city council is already preparing for a first reading of an ordinance that would place a 5% tax on a dispensary’s income, along with a higher tax on recreational marijuana.

Unlike Gold Hill, which saw an opportunity for revenue, they say their goal is to push aspiring dispensary owners out.

“The council was very forthright in their opinion that they wanted to create a disincentive for these establishments to come to Central Point,” said City Manager Chris Clayton.

Cities like Eagle Point and Medford, meanwhile, are just beginning their discussion around taxes.

They say it’s largely driven by the fact that they may not be able to do it come November.

“Our legal advice has been that if we don’t come up with something that we might lose the opportunity to tax it,” said Eagle Point Mayor Bob Russell.

But dispensary owners say the flurry of ideas creates an uneven playing field.

Once the market becomes saturated, dispensaries will be competing to serve a limited supply of patients, and some may have price advantages over others.

“I would hope that wasn’t part of their decision making,” said Malarkey. “Hopefully it’s just customer service and product quality.”

As of now, Gold Hill and Ashland are the only cities in Jackson County to approve medical marijuana taxes. Ashland is also taxing at a 5% rate, with a 10% tax on recreational marijuana. Although neither tax has actually been implemented yet because there are no state-approved dispensaries operating in the city.

Central Point is set to have a first draft of their tax ordinance on July 24th. Eagle Point and Medford do not yet have ordinances written.

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  1. Mark says:

    I don’t get it. Why is marijuana getting singled out and other prescription drugs are not?

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