Oregon Cannabis Businesses Must Now Prove Tax Compliance Before Licensing Process

Oregon Gov. Tina Kotek (D) announced this week that the state’s cannabis companies must now prove that they’ve paid their state taxes before they can receive a license or have an existing license renewed.

Full story after the jump.

Oregon Gov. Tina Kotek (D) on Tuesday announced that anyone seeking to open a cannabis dispensary in the state will be required to prove they’ve paid their state taxes before receiving a license or having an existing license renewed. 

Data from state Department of Revenue shows that cannabis retailers have a higher non-compliance rate in Oregon for payment of taxes (9%) than other tax programs administered by the agency (3%). The Oregon Liquor and Cannabis Commission (OLCC) has indicated that there are approximately 823 licensees that would need to obtain the tax compliance certificate in any given year. 

The change comes following reports that embattled cannabis company La Mota was allowed to expand across the state while owing more than $1.5 million in unpaid state taxes. La Mota is the company that had employed former Secretary of State Shemia Fagan as a business consultant. Fagan ultimately quit the consulting gig and resigned as secretary of state.  

In a statement, Kotek said the new rules “will help ensure that all businesses are operating under the same rules and not getting any competitive advantage if they haven’t paid their taxes.”  

“I’m grateful to the current leadership at the OLCC and the Department of Revenue for working collaboratively to resolve this long-standing need for equivalent tax compliance across cannabis and liquor sectors.” — Kotek in a press release   

Kotek is one of two government officials, along with Fagan, named in a letter sent to U.S. Attorney for Oregon Natalie K. Wight by two state lawmakers who are asking Wight to open a formal investigation into corruption in the state capitol related to campaign donations from cannabis operators in the state. The letter offers no evidence of wrongdoing by the governor or others named in the report but claims the officials accepted “large cash (campaign) donations” in excess of $10,000 from “federally illegal drug operations.”   

In a statement, Craig Prins, OLCC interim executive director, described Oregon’s cannabis industry as “important to the state’s economy.”  

“…The sales tax it generates is vital to the state’s budget,” Prins said. “That’s why it’s critically important for us to get this group of licensees into compliance and paying their fair share.” 

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