A bill on Washington State’s Governor Jay Inslee’s desk will provide registered medical cannabis patients much needed financial relief – if he signs it.
Washington State legalized medical marijuana way back in 1998. It became the first U.S. state to legalize recreational use of marijuana and the first to allow recreational marijuana sales; although adult-use retail sales did not start in Washington until July 2014.
In Washington State, there’s a cannabis excise tax equal to 37 percent of the selling price on each retail sale of concentrates, useable cannabis, and cannabis-infused products. The excise is in addition to general state and local sales and use taxes.
While qualifying patients and designated providers participating in the Medical Cannabis Authorization Database and holding recognition cards are exempt from sales and use taxes on purchases of cannabis products deemed compliant by the Department of Health (DOH), they do not have an exemption from the excise tax.
“Registered patients are spending between $500 and $1,000 per month, taxed at 37 percent,” states a Senate Bill Report. “They end up having to make up gaps in the illicit market.”
House Bill 1453 provides an excise tax exemption and had passed the Senate three times in the past with increasing support each time. On its third reading in the Senate on March 1, it passed with 36 yeas, 36 and 13 nays. On March 6, the House concurred with Senate amendments, passing with 82 yeas and 14 nays (and 1 excused).
With the Senate and House giving it the green light, HB 1453 is now on Governor Jay Inslee’s desk for his signature – or otherwise.
Given the impact of the excise tax on medical cannabis purchases, the Governor signing off on the legislation could provide a boost to recognition card numbers. In 2017, the number of cards created hit 20,623. This number includes initial, renewal, replacement, and corrections; and includes cards for both patient and designated providers. The number of card creations has dropped each year since that time, reaching just 9,368 last year according to DOH figures.
Further information on Washington State’s medical cannabis program can be found here. It operates under the Cannabis Patient Protection Act (SB 5052) passed in April of 2015, which sets strict regulations for cannabis producers, processors and businesses wanting to sell to patients.
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