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Area pot sales lag behind state

Southern Oregon may be the state's most prolific region for marijuana production, but it's dead last in sales at retail stores.

In the first quarter of 2016, retail sales at 23 state-licensed cannabis stores in Southern Oregon generated $2.41 million, bringing in $591,883 in taxes, according to statistics released by the Oregon Department of Revenue.

By comparison, Central and Northeastern Oregon, which includes Bend and also has 23 stores, had $3.32 million in sales and collected $814,459 in taxes.

Southern Oregon stores sold an average of 12,000 grams of marijuana each compared to the statewide average of 20,000 grams.

Brie Malarkey, owner of Breeze Botanicals, with locations in Ashland and Gold Hill, offered several reasons why sales here are less per store than in the rest of the state.

"A lot of people grow for themselves," she said. "We have a large medical cannabis community, and those people aren't charged taxes."

The revenue department numbers are based on sales of recreational marijuana, which is taxed, and not for medical marijuana, which is not taxed.

Another factor that reduces recreational sales is the sizable number of growers in the valley, who won't be going to the store to buy cannabis, Malarkey said.

"None of those people are going to buy grams of flowers," she said.

According to the Oregon Liquor Control Commission, about one-third of the commercial grow sites in the state are located in Jackson County. More than 6,000 medical marijuana grow sites operate in Jackson County, according to the Oregon Health Authority.

This area has the second-highest number of medical marijuana cardholders of any county in the state at 9,234, just behind Multnomah County at 10,890. Medical marijuana cardholders can legally grow six plants, though many prefer to have others grow for them or buy marijuana at a dispensary. Some cities, including Medford, have a ban on growing both medical and recreational marijuana outdoors.

Malarkey said she's not surprised to see lower sales numbers in the first quarter of the year, because people are still using cannabis grown in the previous season. She said her peak season for sales is June, July and August, when supplies from the previous year are low and new marijuana hasn't been harvested.

"Right now is actually my dead time," she said.

She said she expects other quarters in 2016 will show more sales, particularly after cannabis extracts became legal for sale.

Statistics for the first quarter are just being released because many retail stores submitted their tax filings late, said Joy Krawczyk, spokeswoman for the Department of Revenue.

Krawcyzk said her department waits until it has a reliable amount of data before releasing statistics to the public.

"As of today, approximately 85 percent have filed for the first quarter, about 75 percent have filed for the second quarter, and about 65 percent have filed for the third quarter," she said in an email response.

Penalties for late filing are 5 percent of the tax liability, or 25 percent if it's more than three months' past due, she said.

She said her department hasn't come up with a definitive reason why some areas sell more cannabis per store than other areas.

But Krawcyzk said the Bend area has a fairly large population and a strong tourism industry, which could lead to more sales in that area.

In the first quarter, the 253 retail cannabis stores that filed returns in the state sold $43.77 million, with taxes of $10.72 million.

The Department of Revenue estimated it should receive $13.46 million in taxes for the first quarter if all stores file returns.

The highest rate of sales in the state were at 24 stores in the areas surrounding Portland, averaging 36,000 grams in the first quarter of 2016. The Portland metropolitan area had the second-highest average sales per store at 20,000 grams for the 109 stores that filed returns.

— Reach reporter Damian Mann at 541-776-4476 or dmann@mailtribune.com. Follow him on www.twitter.com/reporterdm.