News Ticker

WIRE: City licensing bottleneck costing PDX cannabis businesses millions

Portland, OR – Cannabis industry economist Beau Whitney of Whitney Economics today released the results of an analysis of the City of Portland / Office of Neighborhood Involvement statistics on marijuana business licensure.

“Based on data from the Office of Neighborhood Involvement on the City of Portland’s website, it appears that only 5.4% of all applications submitted in 2016 have been licensed by the city,” Whitney said. “This is having a profound effect on the Portland’s cannabis industry at large and is costing Portland cannabis businesses more than $22 million in lost revenues each month.”

Whitney conducted the analysis after hearing from many business owners that the license process established by city officials was onerous, costly and time consuming.

The Whitney Economics analysis concluded:

  • 19 out of 355 recreational licenses (or 5.4%) submitted to the City of Portland’s Office of Neighborhood Involvement have been issued in 2016
  • This represents an impact of $22.25 million in monthly revenue to Portland-based cannabis businesses collectively
  • Based on a 3% rate, the impact due to the lack of retail operations is approximately $232,500 in potential lost tax revenue for the City, and $1,317,500 in potentially lost state tax revenue (based on 17%) each month
  • Although the OLCC is processing more than 900 licenses statewide to get businesses licensed by December 31 of this year, the 336 city businesses impacted by this issue will not be allowed to operate if they do not also have a City of Portland Marijuana license.

This will drive more businesses to lay off employees and shut their doors. It will also drive the demand across the border to Washington cannabis retail outlets or to the black market

The OLCC recently announced it is assigning more than 900 applications to investigators in hopes of getting as many of them through the state licensing process as possible by the end of December and prior to a deadline that would prohibit non-licensed processors from operating in the state. However, Whitney said, even if those businesses are licensed by the OLCC, those who reside in the City of Portland must also obtain a city license before they can begin operations—a feat only 19 businesses so far have accomplished this year.

Whitney added, “It seems ironic that, given the number of cannabis businesses in Portland and the Office of Neighborhood Involvement’s stated goal of partnering with businesses to promote economic activity, the lack of licenses would indicate that Portland is one of the state’s least cannabis-friendly cities.”

Download the analysis here:

About the Author

Beau R. Whitney is an economist, a university professor and is the former COO of Golden Leaf Holdings, a vertically integrated, publically traded company. Prior to working in the cannabis industry, Beau spent 15 years in the high-tech industry in business operations roles, most notably at Intel and TriQuint Semiconductor. Whitney has published a series of white papers on the cannabis market in the USA and is considered an authority in cannabis economics. He recently presented a paper at the 91st annual Western Economics Association International conference on economics’ role in shaping public policy and was recognized by his peers as being a pioneer in this field of study



Media contact:

John McIsaac

503-481-9621 (West Coast)

Leave a comment