A new bill introduced in the House would bring a new “high” to the tax rate on cannabis in Washington State. Right now, cannabis is taxed a flat rate of 37% regardless of strain or THC content, and has been since Initiative 502 was passed in 2012 and went into effect in 2014.
Bipartisan House Bill 1641 (HB 1641), sponsored by 32nd District Rep. Lauren Davis D-Shoreline and 13th District Rep. Tom Dent R-Moses Lake would create a three tiered system of taxation for cannabis which would begin 90 days after the adjournment of the current session, sometime in July…but there are also a number of other provisions in the new bill.
Warning Labels Will Be Required
Any cannabis product with a THC content higher than 35% would be required to have a health warning label on the container in addition to the other labels already required by law. The label would have to be in a contrasting color to other labels and take up a miniumum of 40% of the containers space. The label would be created by the University of Washington’s Addictions, Drug & Alcohol institute along with the Liquor Cannabis Board and other public heath experts. The label must also meet other minimum requirements regarding age, comprehension, and historically marginalized groups.
New Age Restriction
Any cannabis product with over 35% THC may not be sold to anyone under the age of 25 for non medicinal purposes. A first violation carries a $500 fine or a five day license suspension. A second violation within two years brings a seven day license suspension. A third violation in the same window is a 30 day suspension. A fourth infraction in two years cancels the dispensaries license.
Changes to Marketing and Advertising
Any product containing more than 35% THC cannot be advertised legally in any medium by any entity involved in the production, processing, transporting, researching, or selling of recreational marijuana.
Point of Sale Materials
Whenever someone purchases any cannabis product, except for usable cannabis, they must be given information warning them about the potential negative health issues associated with consuming products with a high THC level.
The New Tax Structure
The three tiered tax structure would go like this:
- Any cannabis product at 35% THC and lower will stay at the current 37% excise tax rate
- Any cannabis product between 36 and 59% THC content will be taxed at the new excise rate of 50%
- Any cannabis product at 60% or higher THC content will be taxed at the new excise rate of 65%
HB 1641 would also require $1,000,000 annually come from the Dedicated Cannabis Account for public service and social media campaigns targeting those most likely to suffer negative impacts from product with a high THC concentration. The Bill was introduced and referred to the Regulated Substances & Gaming Committee on January 27th and received a public hearing on February 2nd.
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