(Photo credit: Brian Breneman).
The Oregon Liquor and Cannabis Commission is seeking a 75% increase in marijuana licensing and application fees, warning that its recreational marijuana regulatory program faces a $17.25 million budget shortfall that could force the elimination of 53 positions if additional revenue is not secured.
The proposed increase, detailed in the agency’s 2027–2029 budget request, would take effect July 1, 2027. The commission says the existing fee structure has remained unchanged since 2015, even as inflation, personnel expenses, technology costs and regulatory responsibilities have increased substantially.
According to the budget documents, the recreational marijuana program is funded through licensing fees rather than marijuana sales taxes. The commission estimates that inflation has increased costs by 43% since the program began, while state restrictions on new licenses have limited opportunities to generate additional revenue.
The agency also projects that it will need to spend approximately $11.6 million from existing reserves during the 2025–2027 budget period to maintain current operations. That would leave roughly $2.4 million in reserves by June 2027, an amount regulators say would be insufficient to sustain the program through the following two years.
Without the proposed fee increase, the commission’s contingency plan calls for eliminating 23 positions involved in marijuana licensing, 23 positions responsible for compliance and public safety, and seven positions associated with hemp regulation.
The licensing reductions would affect application reviews, renewals, ownership changes and business transfers. Cuts to enforcement staffing would reduce inspections, investigations, complaint responses and efforts to prevent marijuana from entering the illicit market. The commission also warns that fewer investigators could delay the identification of potentially unsafe products.
Under the proposed 75% fee increase, the commission projects recreational marijuana licensing revenue of approximately $57.4 million during the 2027–2029 biennium. The additional funding would support regulatory operations, staffing and technology while helping rebuild reserves, which the agency projects would reach approximately $4.77 million by June 2029.
The budget request also identifies rising costs for the state’s Cannabis Tracking System and changes in how administrative expenses are allocated between the commission’s alcohol, recreational marijuana and medical marijuana programs. A review of employee responsibilities resulted in eight existing positions being reassigned to the recreational marijuana program’s budget, increasing its share of agency expenses.
The fee increase and potential staffing reductions remain proposals, not approved changes. Oregon’s governor will consider agency requests in developing a recommended budget, with lawmakers expected to make final funding decisions during the 2027 legislative session.
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