Medical Marijuana Revenues More Than Doubled After Fee Increase

Between October 2011 and June 2012, the state brought in more than $7.5 million in fees from medical marijuana cards

July 27, 2012 -- When the state legislature raised the annual fee for Oregon Medical Marijuana Program cards from $100 to $200, it did so in hopes that public health coffers would increase accordingly: based on budget numbers released by Kathleen Vidoloff of the Oregon Health Authority, the state's budget for the 2011-13 biennium anticipates a total of $12 million in revenue from the program – with $5.3 million supporting the marijuana program and $6.7 million supporting other public health programs.

marijuanaAccording to a report published by The Marijuana Policy Project last fall tracking the financial details of medical marijuana programs in all states that have them, Oregon's program has brought in as much as $3.3 million per biennium since the program was adopted. Since fees increased last fall, the revenue from the program has more than doubled: according to Vidoloff, between October 2011 and June of
this year, the state has made more than $7.5 million from medical marijuana card fees.

Now, advocates are pushing for a more comprehensive ballot measure to legalize and tax marijuana – one they say would probably greatly reduce participation in the medical marijuana program, but bring
the state far more money than it currently receives from marijuana program card fees.

“We think the fact that people can grow their own would dramatically reduce participation in the medical marijuana program,” said Paul Stanford, a spokesperson for the Oregon Cannabis Tax Act of 2012 campaign, who also said medical marijuana patients would be subsidized under the act if they choose to buy from legal licensed sellers or pharmacies, rather than grow their own.

That act – on which Oregonians will vote in November -- would legalize marijuana, but also regulate it much the way alcohol sales are controlled. Marijuana could be sold to adults in commercial settings including pharmacies, and just as the alcohol content of beer, wine and liquor is printed on bottles, the potency of different strains of marijuana would be labeled on the packaging.

As written, the act states that some of the revenue will go toward research and to cover the costs of administering the program, but most will go into the state's general fund.

None is specifically earmarked for public health, but Stanford said advocates estimate – using numbers he considers conservative – that the revenue and savings for the state will more than make up for the likely reduction in medical marijuana program costs.

Based on numbers from Harvard economist Jeffrey Miron, Stanford said legalization and taxation should bring the state $140 million in new revenue and save $60 million, mostly in costs associated with law enforcement.

Medical marijuana and marijuana legalization advocates were unhappy with the state's decision to increase fees last fall, with many not learning about it until after the legislature's budget had been adopted.

“I thought it was cruel on the part of the legislature to balance the budget on the back of the sick and dying,” Stanford said. “The patients who come and get medical marijuana cards in the state of Oregon, by and large, are much more chronically ill than in any other medical practice.”

According to Vidoloff, the Health Authority is required by statute to provide a medical marijuana program, and would need to examine what adjustments would be necessary should the ballot measure pass.

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