Title
Ordinance for Introduction, No. 14-1014, an Ordinance Establishing a Tax on the Sale of Marijuana
Body
RECOMMENDED ACTION (Motion):
The city attorney has prepared an ordinance establishing a tax on the sale of marijuana and marijuana-infused products for consideration. City staff recommends adoption of the ordinance.
BACKGROUND:
Oregon cities currently have the authority to tax the sale of marijuana and marijuana-infused products. If the City Commission desires to impose a tax on marijuana, time is limited to take action due to a potential adoption of Measure 91, providing for the control, regulation and taxation of recreational marijuana. Currently the cities of Ashland, Hillsboro, King City, Wilsonville, Milwaukie, Medford and Portland have considered taxation of marijuana. The ordinance that the Commission would consider is modeled after an ordinance considered by Ashland, Oregon. It imposes a gross receipts tax on the sale of medical marijuana, recreational marijuana (if it is legalized by Oregon voters in November) and marijuana-infused products. The ordinance imposes a lower tax rate on medical marijuana (5%) than would be imposed on recreational marijuana (10%). The ordinance applies to all state-licensed manufacturers, processors, wholesalers, and retailers of marijuana and medical marijuana, as well as all required to be licensed by the state. The ordinance allows the seller to retain five percent (5%) of all taxes due to defray the costs of bookkeeping and remittance.
Oregon voters legalized medical marijuana via initiative petition in 1999, after which medical marijuana dispensaries began operation. These dispensaries essentially served as intermediaries between marijuana growers and medical marijuana patients. While these dispensaries were legal, they were unregulated and the source of controversy in many communities. The 2013 Oregon Legislature passed HB 3460, which created a regulatory and licensing regimen for medical marijuana dispensa...
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