It’s been two years since Portland voters approved a sales tax on cannabis, having been promised the revenue would go to programs designed to help reverse the decades of systemic damage that cannabis prohibition inflicted on communities of color.
But a recent city audit shows that the majority of the money collected from Portland’s cannabis tax has simply been used to fill gaps in the city’s own budget. Nearly half of the revenue is directly funding law enforcement, the very system responsible for disproportionately locking up minorities on cannabis charges.
Since 2017, Portland has collected more than $8.2 million from its 3 percent tax on sales of recreational cannabis. Paired with the state’s additional 17 percent tax on cannabis, that puts a total 20 percent tax on all recreational cannabis that’s purchased in the city.
According to the November 2016 ballot measure that laid out the details of Portland’s cannabis tax, these funds were to be divided between three categories: drug and alcohol treatment services, city programs to “protect community members from unsafe drivers,” and grants to help communities that have been negatively impacted by prior cannabis prohibition laws succeed in the cannabis industry and clear their criminal records. The measure did not dictate how the revenue would be split between each issue area.
The city audit released on May 2 found that nearly 80 percent of the city’s cannabis tax revenue—$6.5 million—has gone toward two “public safety” programs meant to deter traffic accidents caused by drivers under the influence of cannabis: $3.4 million to a Portland Bureau of Transportation (PBOT) initiative to decrease traffic fatalities, and $3.1 million to Portland Police Bureau (PPB) for officer DUII (Driving Under the Influence of Intoxicants) training and enforcement and a court-ordered drug treatment program.
A comparatively scant $1.2 million, meanwhile, has been reserved for grants for record-clearing programs and minority-owned businesses.
Jennette Ward Horton, director of the NuLeaf Project, a nonprofit that offers education and grants for women and people of color in the cannabis industry, says she’s “disappointed, but not surprised” by this unequal split.
“State to state, the majority of cannabis tax revenue goes to the police,” says Ward Horton, who helped write the 2016 ballot measure. In 2018, Ward Horton created NuLeaf to help ensure the success of community grants funded by the cannabis tax.
“It was important to me that the funds collected would go back to communities that have been disproportionately effected by the war on drugs,” she adds. “But the way it’s distributed right now might only make matters worse.”
The cannabis tax audit concludes that the city misled voters by not fairly dividing the tax revenue between the promised categories and keeping the public out of the decision-making process.
Alexandra Fercak, a city auditor who co-authored the report, doesn’t believe the city did that by accident. Based on her research, she believes city commissioners intended for the cannabis tax revenue to bolster city budgets before going to outside recipients.
“It’s not a transparent process,” she says, “and that’s because the council wants to keep things the way they are.”
According to the ballot measure, Portland City Council is required to vote on how the tax revenue is allocated each year. But since the introduction of this new revenue stream, the decision of where to allot those funds has been largely left to Mayor Ted Wheeler, who proposes where to scatter those dollars in his annual city budget. The language around which programs the revenue is allowed to go toward is so broad that the money is often stretched across many different bureaus and general funds.
Take Wheeler’s most recent budget proposal for this coming fiscal year, which will begin this July, for example. Wheeler’s distributed an estimated $6.9 million in cannabis tax revenue between PPB ($2.2 million for traffic enforcement training), PBOT ($2.2 million for Vision Zero, a campaign meant to decrease traffic deaths), Portland Fire & Rescue ($370,000 for new paramedics), Portland Housing Bureau ($500,000 for residential drug and alcohol treatment), the Office of Community & Civic Life ($700,000 for grants that support minority-owned businesses and legal aid groups that help clear criminal records), and administrative costs. He’s left $759,600 unallocated.
Only after Wheeler divvies up these tax dollars in his proposed budget—with help from the City Budget Office—are other city commissioners and members of the public allowed to weigh in.
The audit criticizes this opaque process. “Voting on recreational cannabis tax allocations as part of the overall city budget, with no separate opportunity for comment or description of how the funds will be used, leaves community members with no way to influence the allocation decisions,” it reads.
The program is so loosely regulated that, in last year’s budget process, the city neglected to put any revenue toward one of the three voted-on priorities, drug and alcohol programming.
This somewhat arbitrary allocation process stands in stark opposition to Oregon’s statewide 17 percent cannabis tax, which has defined percentages for how revenue is divided between state programs. At 40 percent, public schools receive the largest amount of state cannabis tax funds. Oregon State Police are given 15 percent. Ten percent of the funds trickle down to local police departments.
Oregon has given the City of Portland a total of $5.8 million in state cannabis tax revenue since 2017. Those funds are to be explicitly used for local enforcement of cannabis laws—adding another stream of cannabis money going directly toward local policing.
While working on the audit, Fercak says she was most struck by the disparities between the community and city recipients of the cannabis tax dollars.
“The community grant recipients were great at making the case for why they should get the money. There’s such a huge need for the funds,” she says. “When I talked with the police or transportation bureaus, I wasn’t given any rationale for why they deserved these specific funds.”
Fercak says she struggled to find evidence that PPB was using its share of the cannabis tax revenue for any new programs that train officers how to recognize cannabis-related driving infractions—a promise made before by proponents of the ballot measure—or even track the number of cannabis-related DUII charges.
“I tried to get data on how PPB was tracking cannabis DUIIs or car crashes,” Fercak says. “But they don’t track that. Police don’t pay any more attention to cannabis use for drivers than they did before.”
A spokesperson for the Multnomah County District Attorney’s office confirmed that law enforcement does not differentiate between different substances in its DUII data.
Instead, Fercak found that $2 million of the PPB’s cannabis tax funds were dumped directly into the traffic division’s general fund—not even a more expansive DUII program budget.
Fercak says it was even more challenging to parse PBOT’s cannabis funds, which were funneled into the bureaus’ overall budget for the Vision Zero campaign.
“There should be some kind of explanation to the public as to why the traffic division is getting so much funding,” she says. “I couldn’t find one.”
Those who have received the fund’s limited community grants, however, can point to a long list of public benefits.
Multnomah Public Defenders (MPD) received a $130,000 grant in October to hire an attorney and aide to help those in communities disproportionately impacted by cannabis prohibition to clear their criminal records.
“We’ve been inundated with requests ever since,” says Thalia Sady, who leads MPD’s community law division. “I’ve been blown away by the need in the community. It’s truly amazing how clearing a conviction from someone’s path effects their entire life.”
A person’s criminal record can often prevent them from renting a home or getting a job. But the cost to clear a record—a process that’s practically impossible to navigate without hiring a lawyer—can be as high as $3,000, according to MPD attorneys. With the cannabis tax grant covering lawyers’ fees, people can leave one of MPD’s record-expungement clinics with an $80 bill.
And MPD doesn’t just clear cannabis-related crimes. Since the smell of cannabis or vague suspicions that someone was selling weed were often used as an excuse for police officers to investigate someone on more serious charges, MPD offers to erase any expungable crime.
“Before legalization, cannabis policing was a tactic that closely followed over-policing in certain communities,” says Michael Zhang, the attorney MPD hired with the cannabis tax grant. “The two most targeted groups are people in recovery and people of color.”
That’s why Zhang has focused on holding expungement clinics in spaces that serve those communities, like the Alano Club, the Urban League of Portland, and the local chapter of Black Lives Matter.
For the next fiscal year, MPD has already applied for $150,000—the maximum amount of funding reserved for record-clearing grants under the cannabis tax. They won’t learn until late June if they’ve been awarded the grant. That annual unpredictability limits MPD’s long-term goals.
“Law enforcement and the government has eroded community trust among these populations,” Zhang says. “In order to rebuild that trust, we need time. We need to prove that we’re reliable, and not subject to the constant threat of defunding.”
NuLeaf’s Ward Horton believes that the police and transportation bureaus should be held to the same standard as the grantees, whose applications must explain exactly how their programs meet the city’s requirements.
“We are held accountable to report to the city on progress and metrics,” she says. “I would expect the other recipients to do the same.”
NuLeaf was tasked with distributing $150,000 from the cannabis sales tax among local, minority-run cannabis businesses, like dispensary Green Hop and delivery service Green Box. Ward Horton says that because of limited funding, she wasn’t able to award grants to other qualified applicants. “There are plenty of really wonderful cannabis businesses run by people or color and women in Portland,” she says. “But they’re entering an industry where white-owned businesses are getting $3 billion in capital start-up funds. It’s hard for them to be competitive with just a few thousand.”
Portland City Commissioner Chloe Eudaly currently oversees the Office of Community & Civic Life, which has been newly tasked with distributing community grant funds from the cannabis sales tax. In the first year of the tax, these funds were housed in the Bureau of Revenue & Financial Services, which is overseen by Wheeler.
According to Eudaly’s policy advisor, Winta Yohannes, this oversight transfer is only the first step in their office’s push to overhaul the inequities of cannabis tax revenue.
Yohannes says her office has drafted a “centralized and accountable” proposal process for city bureaus seeking cannabis tax revenue—not just outside grant recipients. Such a proposal would also give the public more opportunities to comment on where the city routes their tax dollars.
“Voters clearly supported the tax to support communities disproportionately impacted by prohibition,” Yohannes says, “not to backfill general fund shortages.”
Eudaly plans on introducing the proposal to city council on May 14, during a more sweeping work session on the city budget. The intention, Yohannes says, is for Eudaly’s proposed tweaks to the tax revenue process to be tucked into the city’s final budget.
In a region where African Americans are still arrested at 4.2 times the number of white people arrested, Ward Horton worries that if the cannabis tax continues to disproportionately and opaquely fund law enforcement, the revenue from the tax will further contribute to the militarization of Portland police officers and disproportionate arrests of people of color.
“There’s two things we as a community need to understand,” Ward Horton says. “If, by funding police through this work, we’re making the problem worse, and if this is what the voters wanted.”
