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Medical Cannabis Tax Reform in Washington

Good riddance to Washington’s sin tax on plant medicine.

Courtesy of Adobe Stock

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.

About Wes Abney

Wes Abney is the founder and CEO of the Leaf Nation brand family, which began in 2010 as Northwest Leaf magazine. Recognized as the first Cannabis publication in the region, Northwest Leaf defined and developed the medical and recreational Cannabis communities in Washington with free publications focused on quality content and truthful journalism. The model’s success has led to Oregon Leaf in 2014, Alaska Leaf in 2016, Maryland Leaf in 2019, California Leaf in Spring of 2020, and Northeast Leaf in Fall of 2020. Wes’s writing and publishing background began with his college newspaper, The Ebbtide, which included a love for multimedia and creating content on many platforms. The nickname “Bearded Lorax” came after years of publishing millions of free magazines, using his voice to speak for a plant and those that benefit from it. Wes is an activist not only for Cannabis but for alternative medicine treatments, ending the drug war and freeing prisoners who have been wrongfully incarcerated for non-violent crimes. His passion for reaching people with written and spoken words led to the concept of Leaf Life Podcast in partnership with Mike Ricker, which began development in 2018 and launched in January 2019. With the combined passions of Cannabis and a love for broadcasting, the creation of Leaf Life was a natural progression for Leaf Nation as it spread roots across the United States. With over 100 shows recorded, and printing over 100,000 monthly copies, Leaf Nation has become the world’s largest Cannabis media company, while still celebrating the humble roots and truthful journalism that the model was founded upon. Beyond leading a team of 40+ passionate Cannabis creatives, Wes is the father to two beautiful daughters and two furry cats. He lives in Seattle, drinks coffee, and enjoys Cannabis daily, and hopes to eventually transition from a successful Cannabis journalist to a classic coffee shop author as the Leaf continues to grow in the coming decades. In true Lorax fashion, he enjoys hikes in the forest, communing with nature, and reminding people that “Unless someone like you cares a whole awful lot, nothing is going to get better. It's not.”

This article was originally published in the June 2024 issue of Northwest Leaf.

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