WA Senate - Session
(February 2, 2024) - SB 6271 - Second and Third Reading

As senators looked at approaches to reduce use of “high THC” cannabis—especially by young adults—they mandated WSLCB data collection and recommendations on THC-based taxation.

Here are some observations from the Friday February 2nd Washington State Senate (WA Senate) Session.

My top 3 takeaways:

• Senators had been evaluating SB 6271, "Modifying the cannabis excise tax to consider THC [tetrahydrocannabinol] concentration," as an approach to reduce sales of products with higher concentrations of the cannabinoid.
  • At time of publication, the state levied a 37% excise tax on cannabis on top of local sales and use taxes. In 2019, the Washington State Liquor and Cannabis Board (WSLCB) led the first legislatively mandated Potency Tax Work Group whose resulting feasibility study from BOTEC Analysis was followed by a final report from the group determining the idea was “not feasible at this time.” The document also indicated “group members from the public health community were in favor of a tax structure that would discourage consumption of high potency cannabis, but did not have confidence that this tax would guarantee those outcomes.”
    • While some states with legal cannabis have researched the policy implications of taxing their retail market based on THC percentage, such as California, the first state to do so was Illinois in 2019. Taxation based on milligrams of THC in a product had been implemented in Connecticut and New York as well, although New York’s Governor proposed undoing the tax policy in her fiscal year (FY) 2025 budget. The National Conference of State Legislatures released an Overview Of High Potency Cannabis and THC Concentrate Product Legislative Enactments Through 2023 on January 3rd.
    • Research around cannabis taxation based on THC content includes:
      • Urban Institute - Cannabis Taxes
      • Tax Foundation - Cannabis Taxation: Lessons Learned from U.S. States and a Blueprint for  Nationwide Cannabis Tax Policy
      • Northwestern Journal of Law and Social Policy - Taxing Legalized Marijuana: Equitable Options for a Marijuana Tax Scheme
      • University of Southern California-Schaeffer Center - Federal Regulations of Cannabis for Public Health in the United States
  • According to the bill report, SB 6271 had the following effects:
    • Requires the Liquor and Cannabis Board (LCB) to collect data on cannabis product sales and submit a report to the Legislature by November 14, 2025.
    • Requires LCB to formulate a recommended approach and implementation plan for modifying the cannabis excise tax and submit a report to the Legislature by September 18, 2026.
    • The fiscal note revealed an initial cost of $63,600 in FY 2025, and $7,200 in the following fiscal bienniums related to “400 vendor hours to modify the agency's Cannabis Central Reporting System (CCRS),” plus an “ongoing annual subscription for additional cloud storage.”
  • Following a public hearing on January 22nd by the Washington State Senate Labor and Commerce Committee (WA Senate LC), members recommended passage of SB 6271 without modification on January 25th. The Washington State Senate Rules Committee then calendared the legislation via package pull on January 30th, positioning it for action on the Senate floor.

• Two senators gave remarks supporting passage of the bill and the need for better information about the necessity and impact of considering THC concentration in cannabis tax policymaking.
  • WA Senate President Pro Tempore Karen Keiser motioned for the bill to be advanced to third reading since there were no amendments under consideration and received no objection from her colleagues (audio - <1m, video).
    • Along with being the prime sponsor on the bill, Keiser served as WA Senate LC Chair for the public hearing.
  • Keiser urged support, commenting how “many of us have heard, and are becoming concerned about some of the potential health effects of high THC products that are available in our marketplace,” as she understood them to be “linked to…individuals, who are younger especially, have bad reactions and end up in emergency rooms.” However, she felt “we don't have enough information to take immediate action,” and so the bill made WSLCB collect sales data to “know what the product lines are that are being sold” and to define “high THC” (audio - 2m, video).
    • After defining that, “the LCB is then directed to look at a different approach to the excise tax on cannabis so that it discourages the purchase of high THC products with a higher excise tax…similar to what we did years ago on tobacco that has had a real deterrent on the sale and use by teenagers of tobacco.”
      • Find out more from tobacco tax statutes and an excerpt from the 2023 Tax Reference Manual by the Washington State Department of Revenue.
    • Additionally, Keiser said the bill required any tax change to stay “revenue neutral so that we are not using this situation to advantage anyone.”
  • Senator Curtis King, also the Ranking Minority Member of WA Senate LC, seconded Keiser’s concerns around cannabinoid concentration “and the effect that it's having, particularly on our young people.” Viewing the legislation as a “very good step in the right direction,” his sole objection was “we could get that information back quicker rather than the length of time that we've given them to do it, but it'll probably take us that long to get those good results” (audio - 1m, video).

• The bill was passed overwhelmingly though several members of the majority voted against the legislation which was subsequently scheduled for policy committee consideration in the Washington State House of Representatives (audio - 3m, video).
  • Senate President Denny Heck initiated a roll call vote on SB 6271. After two senators changed their votes from ‘yea’ to ‘nay,’ the final count was 44 yeas and five nays. All votes opposed to the bill came from the Democratic caucus.
    • Leadership Liaison to Tribal Nations Claudia Kauffman
    • Senator Liz Lovelett
    • Senator Joe Nguyen
    • Majority Whip T'wina Nobles
    • Senator Yasmin Trudeau
  • After passage, Keiser’s staff sent out a press release referring to her sponsorship of the bill, and arguing Washington “benefited greatly from having a well-designed regulatory framework for cannabis that works well for consumers and businesses — one that has established public trust,” making it all the more “important that we update our system to maintain that trust.”
    • Keiser’s announcement noted another bill, SB 6220, “would help reduce usage of high-THC products by young Washingtonians by directing [WSLCB] to define the concentration of THC that constitutes high-THC cannabis,” as well as “setting the minimum age to purchase it at 25; and funding research and training on its effects.” That bill was heard by the Washington State Senate Ways and Means Committee the following day on February 3rd, but did not advance ahead of a fiscal committee cutoff date. However, the companion bill, HB 2320, was passed by the House on Friday February 9th, and was expected to be referred to WA Senate LC.
  • At time of publication, SB 6271 was scheduled for a public hearing in the Washington State House Regulated Substances and Gaming Committee (WA House RSG) on Wednesday February 14th.

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