Published on January 13th, 2016 | by News Feed
Oregon Imposing New 25 Percent Sales Tax On Marijuana
Despite the absurd sales tax hike in Oregon on the sale of recreational marijuana, many shop owners are claiming that the customers are taking the hit in stride. January 1 was the launch date for the newly minted 25% tax hike in Oregon. There had been a 3-month tax holiday leading up to this point. Keep in mind that the 25% tax is only temporary as the state waits for the LCC to assume control of the recreational marijuana industry. Once the Liquor Control Commission assumes control the state wide sales tax will be 17%.
The tax hike has been met with mixed reviews but overall many shop owners claim the hit to business will be minimal. Matt Price owns a chain of dispensaries called Cannabliss and he stated that some have shrugged off the tax wile a few others have opted to “go back to their guy”. Those have been few and far between.
General manager of Glisan Buds and Foster Buds, Nathan Krytenberg, has decided that his stores will absorb the new tax. While this might be considered a radical step to some, Krytenberg is hoping that this model will spur additional growth in the business.
Krytenberg is also hoping that this move will help him to establish some customer loyalty. Knowing that the business is competing with over 100 other shops, as well as the black-market, Krytenberg believes this move will pay off nicely in the near future.
“To be quite honest with you, if we even take a small hit, I believe the fact that we are doing this will put us in a better market position,” said Krytenberg, whose shops sell marijuana for $9 and $15 a gram.
It is a known fact that Oregon pot smokers have enjoyed some of the lowest prices in the nation. When compared to the prices in Colorado and Washington there is really no comparison. However there are some in the industry that have questioned the intelligence of the move overall.
“If you can do it and make any kind of profit, God bless you,” said Sam Heywood, an owner of Farma, a dispensary on Southeast Hawthorne Boulevard where a sign at the entrance reminds customers about the sales tax. “It’s aggressive. Is it sustainable? I don’t know.”
Officials with the Oregon Department of revenue claim that the storeowners are allowed to handle the tax how they see fit. The main issue with the revenue department is that the tax is paid. Who pays the tax is irrelevant.
“We have no authority over pricing,” said Julia Dodson, a spokeswoman for the agency. “Dispensaries can charge whatever they decide.”
Would this move to absorb some of your cost associated with the purchase of marijuana inspire shop loyalty for you?