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The state’s Behavioral Health Resource Network, which supports county-level addiction and mental health services, faces a $26 million shortfall because of falling cannabis tax revenue.
Since 2022, Oregon’s cannabis taxes have paid for free behavioral health and addiction treatment for more than 35,000 residents across the state, a first-of-its-kind program.
But plummeting pot prices have resulted in a 38% decline in tax revenues since 2021, slashing funding for the Behavioral Health Resource Network and its clients.
The Oregon Health Authority, which manages the network of county programs, projects a $26.2 million shortfall for the next fiscal year.
“This funding is critical to keeping life-saving behavioral health services available in communities across Oregon,” says OHA behavioral health director Ebony Clarke in a statement.
This comes at a time when Oregon ranks among the worst states in the nation for illicit drug use disorder, according to federal data.
Last week, OHA said it secured about half of the $26 million shortfall from the state’s Opioid Settlement Fund, which has $270 million from national lawsuit settlements with opioid distributors, to be paid from 2021 to 2039.
Under a formula created by Measure 110 — the drug decriminalization measure voters passed in 2020 and lawmakers partially repealed in 2024 — Oregon taxes recreational cannabis sales at 17%, then distributes the money to county behavioral health networks, the Common School Fund, the Oregon State Police and local municipalities.
Colin Hobbs, chair of the Cannabis Industry Alliance of Oregon, says Oregon growers are simply producing more weed than Oregon residents can consume. That oversupply drives prices down, and since the tax is a function of price, revenues decline, too.
“The 4½ million residents who live here can’t smoke enough,” Hobbs says.
Exacerbating the problem, the Behavioral Health Resource Network under the health authority has failed to integrate its services into the broader public health system and has been plagued by turnover at the top, according to a December 2025 audit by the Oregon Secretary of State’s Office.
Average prices for marijuana have declined nearly 40%, from $5.55 per gram in January 2021 to $3.33 by the end of 2025. Cannabis extracts have dropped 20%, from $18.75 per gram to $15.
Hobbs doesn’t expect prices to rise unless new state or federal legislation allows Oregon pot products to be sold out of state.
“We could certainly use modernization of our rules and regulations,” he says.
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