Washington House Passes Bill to Eliminate Three-Tier Tax Structure on Recreational Cannabis
Washington’s House of Representatives voted on Friday to pass House Bill 2136, a proposal to make several changes to the state’s recreational cannabis market, including eliminating the three-tier tax structure. The vote was 59 to 38.
Under current law, recreational cannabis is taxed at three different levels, 25% on the producer, 25% on the processor and 25% on the retailer. Under House Bill 2136, this structure would give way to a new system where cannabis is taxed just once, at the point of sale at the retailer, with the tax being set at 37%.
An amendment to the bill that was approved before passage of the full measure unfortunately removed language that would have only allowed local bans on licensed cannabis businesses if approved by the jurisdiction’s voters. However, to encourage more cities and counties to allow cannabis businesses, the bill directs the state to share revenue from cannabis sales only with jurisdictions that allow them.
The proposal also allows counties and cities to reduce the current restrictions limiting cannabis outlets from being located within 1,000 feet of a childcare centers, public park, transit center, library or arcade.