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Dispensaries generate more sales tax revenue for OKC than bars in December

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Dispensaries in Oklahoma City are generating hundreds of thousands of dollars in sales tax revenue each month. [NATE BILLINGS/THE OKLAHOMAN]
Dispensaries in Oklahoma City are generating hundreds of thousands of dollars in sales tax revenue each month. [NATE BILLINGS/THE OKLAHOMAN]

Oklahoma City medical marijuana dispensaries are plentiful, and so too are the profits they generate for the city.

The city alone, not including any of the other cities in the metro area, now has nearly 195 dispensaries open and operational. Those dispensaries have consistently generated between $250,000 and $350,000 per month for the past six months.

This is so much the industry is generating more tax revenues than the city's bars, according to city data. Drinking establishments that are primarily bars, and not just restaurants that serve alcohol, generated nearly $277,000 last month, compared to more than $284,000 for marijuana sales.

Sales tax revenues are used to fund a variety of things within the city, including most day-to-day operating expenses including police and fire protection. Oklahoma City collects tens of millions of dollars each month in sales tax revenues from the sale of all sorts of products.

Other than bars, the marijuana amount was more than several other retail trade categories tracked by the city, including women’s clothing stores; gift, novelty and souvenir stores; cosmetics, beauty supplies and perfume stores; and convenience stores. None of these surpassed $279,000 last month.

The amount wasn’t far behind sales tax collections from retail warehouse clubs and supercenters, household appliance stores and shoe stores.

Oklahoma City’s medical marijuana sales tax collections account for about 0.73% of the city’s nearly $38.8 million total sales tax collections for the month.

January’s medical marijuana collections are the lowest in six months, but it comes one month after the city’s largest collection for the industry in history, at nearly $341,000. Oklahoma City’s median collections in that six-month time span was nearly $308,000.

If the city collected that amount over the course of the year, Oklahoma City could expect to see nearly $3.7 million in annual tax revenues from the industry.

Of course, tax revenues are only one economic indicator for the industry. The 195 dispensaries remitting taxes are employing many who live in Oklahoma City or the surrounding area, and they are renting or purchasing commercial property and more.

Other, potentially more negative, economic factors are in play as well. Property values of businesses and homes near dispensaries could be adversely affected, additional legislative restrictions could hinder dispensary business in the future, or perhaps the legalization of recreational use might give way to drastically different sales tax amounts collected.

In the short term, it’s been important for city officials to make sure Oklahoma City is accounting for its dispensaries. The city’s broad borders, plus the influx of new businesses, has led to a great deal of manual sorting of these dispensaries in the city’s tax breakdown.

“There’s not a code that sorts dispensaries,” Oklahoma City Treasurer Matt Boggs said.

Finance officials are working to continually update the city’s lists to better reflect how much is being collected from these businesses.

It’s also worth noting these taxes are inclusive of all products sold within a dispensary, but not all dispensary products contain marijuana. From a macro level, the state collects a 7% excise tax on all sales made for medical marijuana products that actually contain marijuana.

This is charged in addition to the state sales tax, and any applicable city or county sales taxes. The excise tax is a good way to explore how much marijuana is sold within the state because of its flat rate.

But dispensaries sell clothing and other goods that may not have anything to do with medical marijuana other than the branding or location from which it is sold.

Like a liquor store selling a bottle opener, these supplementary goods aren’t usually where a business is making its bread and butter, but these products do generate sales tax as well. These sales are included in the city’s figures, while you wouldn’t find it in the state’s medical marijuana tax totals.

Related Photos
<strong>[GRAPHIC BY TODD PENDLETON/THE OKLAHOMAN]</strong>

[GRAPHIC BY TODD PENDLETON/THE OKLAHOMAN]

<figure><img src="//cdn2.newsok.biz/cache/r960-c4cc976564867b0a9f237e24faa3a108.jpg" alt="Photo - [GRAPHIC BY TODD PENDLETON/THE OKLAHOMAN] " title=" [GRAPHIC BY TODD PENDLETON/THE OKLAHOMAN] "><figcaption> [GRAPHIC BY TODD PENDLETON/THE OKLAHOMAN] </figcaption></figure><figure><img src="//cdn2.newsok.biz/cache/r960-8707da27ff56c112a4769977a78ce508.jpg" alt="Photo - Dispensaries in Oklahoma City are generating hundreds of thousands of dollars in sales tax revenue each month. [NATE BILLINGS/THE OKLAHOMAN] " title=" Dispensaries in Oklahoma City are generating hundreds of thousands of dollars in sales tax revenue each month. [NATE BILLINGS/THE OKLAHOMAN] "><figcaption> Dispensaries in Oklahoma City are generating hundreds of thousands of dollars in sales tax revenue each month. [NATE BILLINGS/THE OKLAHOMAN] </figcaption></figure>
David Dishman

Business Writer David Dishman has worked as a journalist in Oklahoma since 2014 covering business, education, local government, healthcare and more. He worked as a reporter in southeast Oklahoma before joining the business team at The Oklahoman in... Read more ›

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