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MICHAEL DUNNE: I’m Michael Dunne. When Oregon legalized cannabis, it was like a floodgate opening. Small and large businesses alike geared up to sell to an eager public. And in some ways, that was the problem. Many growers and retailers bought into the idea of easy money, and the market became inundated with product. As any economist will tell you, when supply outstrips demand, prices fall.
Today on the show, we talk with a reporter at The Oregon Journalism Project about her recent story showing that cheap pot means lower-than-expected tax revenue. As set up when cannabis was legalized, that revenue helps fund mental health and addiction services. In the second part of the show, you’ll hear from our newest reporter about a new youth center helping some of our community’s most vulnerable residents.
Khushboo Rathore is a reporter with The Oregon Journalism Project. Great talking with you again. How are you?
KHUSHBOO RATHORE: I’m good. How are you doing?
MICHAEL DUNNE: I’m good. Thanks so much for joining us. I read your recent article about challenges in Oregon’s cannabis industry, and I wanted to start here. For people who may not remember, can you explain how cannabis revenue is tied to behavioral health funding in Oregon?
KHUSHBOO RATHORE: Yes, absolutely. Measure 110, which decriminalized many drugs, also established Behavioral Health Resource Networks. That’s a grant program managed by the Oregon Health Authority. A certain portion of cannabis tax revenue — I believe it’s now around $13 million — goes to other programs, including the State School Fund and the Oregon State Police. That amount is capped. Everything beyond that goes to the Behavioral Health Resource Network grant program.
MICHAEL DUNNE: So what’s the current state of cannabis revenue in Oregon?
KHUSHBOO RATHORE: It’s been steadily decreasing. I spoke with Colin Hobbs, chair of the Cannabis Industry Alliance of Oregon, and he said that without significant changes, he doesn’t see it improving. Oregon growers are producing more cannabis than the state can consume.
MICHAEL DUNNE: So, basic economics. Too much supply drives prices down.
KHUSHBOO RATHORE: Exactly.
MICHAEL DUNNE: Pull that thread a bit further. How does that affect behavioral health funding? Is it simply less tax revenue?
KHUSHBOO RATHORE: Yes. The Behavioral Health Resource Networks are fully dependent on cannabis tax revenue. They don’t have other ongoing funding streams. The opioid settlement board has stepped in to help offset anticipated shortfalls, but otherwise, they rely entirely on that revenue. The tax rate is a flat 17% on recreational sales. If that money isn’t there, programs may have to make difficult choices, including staffing reductions, which could affect care.
MICHAEL DUNNE: Are we already seeing those impacts? Can you draw a line between lower cannabis revenue and service reductions?
KHUSHBOO RATHORE: It’s hard to say definitively. The grants operate on four-year cycles. The most recent awards were issued in July 2025 and will be distributed incrementally over the next four years. What officials have said is that they want funding to be consistent. If revenue continues to decline, they may have to reduce promised amounts. That would likely affect services, but it’s not yet clear how.
MICHAEL DUNNE: Oregon also faces serious challenges with illicit drug use, even as tax revenue declines. Can you talk about that tension?
KHUSHBOO RATHORE: All of this revenue comes from legal marijuana sales. Illicit drug sales aren’t taxed. Even if there’s more fentanyl, heroin or cocaine being sold, those transactions don’t generate tax revenue. And if cannabis is being grown illegally or shipped out of state, which is not allowed, the state can’t tax that either.
MICHAEL DUNNE: You mentioned Colin Hobbs earlier. Are there broader economic forces that might correct this? For example, will some growers exit the market?
KHUSHBOO RATHORE: It’s possible, but not immediate. Some growers are already merging or shutting down. But because cannabis moves through a three-step process — growing, processing and retail — it takes time for changes to ripple back to growers.
MICHAEL DUNNE: This gets a bit speculative, but based on your reporting, has legalization been a success in Oregon?
KHUSHBOO RATHORE: Colin said the state hasn’t done a great job managing licensing. There was open licensing for a long time, and later shifts — possibly to per-capita licensing — came after the market was already saturated. He said the state’s original goal of supporting small growers also hasn’t been fully realized.
MICHAEL DUNNE: Cannabis is legal in Oregon but still illegal federally, which affects banking and interstate sales. If federal legalization happened, would that help address the glut?
KHUSHBOO RATHORE: Yes. That was something Colin emphasized. Federal legalization would allow Oregon growers to ship product out of state. Oregon has an established growing industry, and interstate commerce could provide more financial stability. He also shared his own experience with a business bankruptcy and the lack of access to banking, which made recovery much harder.
MICHAEL DUNNE: One last question. Is there concern that consolidation could leave just a handful of large growers controlling production and prices?
KHUSHBOO RATHORE: I can’t say for sure. Colin did mention that some growers already operate in multiple states, but doing that requires significant capital. You essentially need a separate corporate entity in each state, and interstate transport involves federal oversight, which adds cost.
MICHAEL DUNNE: A complex industry, to say the least. Khushboo Rathore with The Oregon Journalism Project, thanks for breaking this down.
KHUSHBOO RATHORE: Thank you for having me.
MICHAEL DUNNE: Let’s now hear about a new youth center helping kids with nowhere else to go. Macy Moore is a reporter with us here at KLCC. Macy, thanks so much for coming in.
MACY MOORE: Thank you for having me.
MICHAEL DUNNE: I really enjoyed your recent story about the Jackson Street Youth Service Center. Tell people what it’s about and what you found.
MACY MOORE: Sure. I recently reported a longer piece about the Jackson Street Youth Service Center. Jackson Street Youth Services is a nonprofit that’s been operating in the Albany and Corvallis areas since the mid-1990s. They work to combat youth homelessness, serving young people roughly ages 12 to 24. They can provide emergency housing or help connect youth with longer-term housing support, like apartments.
MICHAEL DUNNE: A big part of your story focused on the drop-in component. Talk about why that’s important.
MACY MOORE: The staff described the drop-in center as a kind of prevention measure. During drop-in hours, anyone ages 12 to 24 can come in and use laundry facilities, bathrooms, the kitchen, the food pantry, the hygiene closet and the clothing closet. Sometimes homelessness prevention is about meeting very basic needs. If someone can’t afford toothpaste one month, they can come in, get toothpaste and leave.
If someone needs more support, staff can connect them with mental health counseling, emergency housing or other services. They can also connect youth with LGBTQ resources. There’s just a lot happening in that space, and it felt like a really important place to highlight.
MICHAEL DUNNE: In your reporting, did leadership talk about whether demand for their services is growing?
MACY MOORE: Yes. One reason they moved into a larger building is that they were overwhelmed with donations and needed more space. They wanted the center to function not just as a resource hub, but also as a place where young people could spend time.
The previous center was about four times smaller, and there wasn’t room for a lounge area where youth could sit, cook or connect with one another. They also saw a need for something in between emergency housing and no services at all — a place where young people could get support before things became a crisis.
MICHAEL DUNNE: You mentioned drop-in services, but there’s also outreach. What does that look like?
MACY MOORE: The expanded building includes office space for outreach staff and private counseling rooms. Outreach workers go into the community — to libraries, schools and events — to make sure people know these resources exist.
They emphasized food insecurity as a major focus. Helping families access food can prevent homelessness by reducing financial strain. The outreach hub is also designed to lower barriers. Youth can simply walk in the door and get connected with services, instead of trying to navigate complex systems on their own.
MICHAEL DUNNE: Youth homelessness is often overlooked. Based on your reporting, how significant is the challenge?
MACY MOORE: Staff talked a lot about prevention. Homelessness isn’t always what people picture. It can be food insecurity, not having winter clothing or lacking basic necessities. Young people often don’t have the ability to solve those problems on their own.
Jackson Street’s work includes helping youth whose families may not be able to support them financially or emotionally. They also talked about supporting LGBTQ youth who may lack family support. The organization can provide anything from basic supplies to emergency housing, depending on what someone needs.
MICHAEL DUNNE: It sounds like their services are already expanding. Do you think that will continue?
MACY MOORE: I think so. The Oregon Health Authority provided funding to expand the service center, which is how I initially learned about the project. The state is recognizing the need for these kinds of centers. Jackson Street does a wide range of work, and it seems like they have long-term plans to continue expanding their reach.
MICHAEL DUNNE: I want to switch gears for a moment. You also reported recently on the New Zone Artist Collective in Eugene. Tell us about that.
MACY MOORE: I loved working on that story. The New Zone Artist Collective is an artist-run gallery that features mostly Eugene- and Oregon-based artists. Twice a year, they host a nonjuried exhibit, meaning every piece submitted is displayed.
Artists can submit up to two pieces, and the gallery helps display and sell the work. It’s a way for artists — especially those just starting out — to get professional gallery experience.
MICHAEL DUNNE: What stood out to you about the artwork?
MACY MOORE: There was a huge range. I saw abstract pieces by a young artist who was about 18, with colorful pencil drawings and patterns. There were portraits by a more established local artist, stained glass, jewelry, ceramics — really every medium.
I interviewed Diane Story Cunningham, a ceramicist whose work includes small ceramic city scenes with houses. The variety was impressive.
MICHAEL DUNNE: It’s interesting how these stories connect — youth services and youth artists. It seems like there are spaces intentionally welcoming young people.
MACY MOORE: Definitely. Diane talked about how meaningful it is to see young artists sell their first piece or show their work publicly for the first time. With so many spaces for young people disappearing, it’s encouraging to see community-focused places like this still thriving.
MICHAEL DUNNE: Macy Moore is a reporter with us here at KLCC. Macy, thanks so much for coming in.
MACY MOORE: Thank you for having me.
MICHAEL DUNNE: That’s the show for today. All episodes of Oregon on the Record are available as a podcast at KLCC.org. Tomorrow on the show, you’ll hear from a federal judge on the rule of law and how executive branch overreach is viewed from the federal bench. I’m Michael Dunne. Thanks for listening.
