After a decade of putting medical Cannabis patients last behind the goal of collecting tax revenue, Washington state has officially ended the 37% sin tax for registered patient purchases at medically endorsed dispensaries.
Legalization is a tricky business, and nothing exemplifies that better than Washington’s journey from medical Cannabis to a recreational marketplace. What began as collective gardens where patients grew, shared or sold their medicine without taxation was replaced with a highly commercialized legalization voted into law in 2012. This law, known as I-502 after the initiative number, included a 37% excise “sin tax” on Cannabis, plus sales tax that averages 8.8%. This means that a $10 gram of pot sold at a dispensary, $4.58 on average goes to state tax, leaving only $5.42 cents for the grower and retailer to cover costs, profit from, and pay federal taxes that range from 20-30% without standard deductions like rent, payroll and utilities.
This massive taxation burden has crushed businesses in the state since day one of legal sales and forced patients to pay a tax on medicine that is lifesaving. As this writer has noted many times, the state is essentially running a protection racket, forcing drug dealers to work for the state, with little profit sharing, and draconian laws that can still land an operator in hot water for missing a plant tag.
The new law that took effect June 30 ends this disgusting taxation of medical Cannabis, allowing registered patients in the state database to avoid the 37% tax at the register. Never mind that registering as a patient forces individuals to give up their right to privacy, join a registry, and agree to potential warrantless search and seizure if a law enforcement officer decides to check if a patient is growing more than their four plants allowed by law.
Just like the swamps of Washington, D.C., our Washington bureaucracy is smothered in private interests and greed, and nowhere is this more evident than in the treatment of medical Cannabis patients post-legalization. Still relegated to the status of “second class,” patients are forced to defend their use of medicine and pay to be on a list, simply to have the privilege of avoiding a sin tax that should be cut in a third for all purchases regardless of medicinal versus rec use.
Ending the sin tax is a major step forward for patients, but the momentum for tax reform and personal freedoms must not be lost. The lawmakers and the Liquor and Cannabis Control Board should stop focusing on extracting the most money possible from the second pass on the industry and focus on creating a healthy marketplace where businesses can grow and provide products for patients and recreational users alike to benefit from.
Look for our coverage in July’s issue on how to sign up as a patient, avoid the taxation, and put pressure on regulators to continue tax reform for our plant and the industry that has sacrificed endlessly for our right to consume Cannabis.
