Wasn’t there a tax bill that changed? Are pricing coming down?
Yes and Yes! As pioneers of this budding new industry (pun intended) Washington State can only expect to see many changes in i-502 laws as we search for the best way to approach a new era.
Last month, Washington’s marijuana businesses were elated with the passing of HB 2136, a tax reform bill that “eliminates unintended double-taxation consequences created in I-502.” As Aaron Pickus of the Washington Cannabusiness Association told Tax Analyst. Not only does this bill change the way marijuana is taxed, but who gets those taxes.
But what does that all mean as the customer?
- Lower taxes for the producers and processors means reasonable prices for the customers. (Or at least the beginning to better prices…)
Before the passage of this bill, the state took a 25 percent tax up to three times throughout the process. This three-tier excise tax started with producer to processor, then again with processor to retailer and finally from the retailer to the customer. This is on top of other business, sales and local sales taxes. HB 2136 collapses these three points of taxation to a single 37% collected by the retailer from the customer at the time of sale. The state of Washington receives slightly more in total tax but our new cannabis market finally has a chance to stretch out and breathe! Until this law went into effect on July 1 2015 Washington’s fledgling cannabis industry had no real wholesale market. The creation of one will allow farms to work together, evening out supply/demand issues between harvests and simply opening up the ability to buy and sell cannabis to each other without the restricting of the prior 25% wholesale taxation. While this won’t change the price of marijuana much initially, it will help to build a much healthier marketplace which will increase competition at levels in the supply chain creating ever cheaper pot for consumers!
- Reduced “buffer zone” will bring more opportunities for new retailers.
Although this bill does ban marijuana clubs, vending machines and drive-thru facilities, it has lowered the buffer zone from 1,000 to 100 feet from public parks, libraries, child care centers and public transit hubs. (Keeping only schools at the 1,000 foot buffer zone.) This is a great step in the right direction towards more retailers and producers of marijuana.
- Fairer distribution of marijuana taxes.
With the HB 2136 reform, taxes made by the marijuana industry will only be distributed to those cities and counties that support i-502 businesses. This means that if local government wants money from marijuana taxes, they will have to reevaluate their stance on i-502.
Washington’s emerging recreational marijuana industry has been given a chance to run and consumers should soon be reaping the rewards.