After a three month tax holiday at the end of 2015, January 1st marked the beginning of a 25 percent sales tax on recreational marijuana in Oregon.
Since weed is, ounce for ounce, probably one of the most expensive things we buy, the prospects of a 25 percent tax could seem a bit intimidating.
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Now, halfway through the month, dispensary owners are talking about how the tax has affected business.
Matt Price, owner of the Cannabliss chain of dispensaries, told reporters that “some customers have shrugged off the tax.”
“And then we have people that say they would rather go back to ‘their guy,’ so to speak, and walk out.”
To avoid having too many people go back to their black market weed guys, some dispensaries have tried to absorb the tax themselves, and the result has been some super cheap weed.
That new taxes could somehow create lower priced pot seems counterintuitive, but that’s exactly what’s happening as some dispensaries try to keep their customers happy by working to make bud as affordable as possible.
Glisan Buds and Foster Buds are two examples of dispensaries that have taken this route.
General Manager Nathan Krytenberg told reporters that his pot shops are currently selling marijuana for $9 and $15 a gram. Translated into goofy American units, that’s somewhere between $31 and $52 an eighth.
“To be quite honest with you,” Krytenberg said, “if we even take a small hit, I believe the fact that we are doing this will put us in a better market position.”
Others in the biz aren’t too sure the plan will work.
“If you can do it and make any kind of profit, God bless you,” said Sam Heywood, owner of a dispensary in Portland. “It’s aggressive. Is it sustainable? I don’t know.”
As marijuana continues straddling the worlds of illegal black market drug and legally marketed commodity, the struggle for customer loyalty is an especially pressing concern for dispensary owners.
Krytenberg and others who have chosen to absorb the new tax by offering extremely low prices hope to secure a good chunk of the cannabis market.
In the meantime, pot enthusiasts in Oregon may be able to cash in on some dirt cheap, top shelf bud.
The 25 percent tax will eventually be replaced by a lower 17 percent tax when the Oregon Liquor Control Commission takes control of recreational pot sales in the state.