WA Legislature - Update
(January 25, 2023)

WA Legislature - Update (Jan 25, 2023) - Takeaways

Republican representatives were poised to introduce a bill to radically revise the excise tax structure by THC concentration after the public weighed in against taxing patients.

Here are some observations of the Washington State Legislature (WA Legislature) for Wednesday January 25th, the 17th day of the 2023 Regular Session.

My top 2 takeaways:

  • Two bills were scheduled for introduction on Wednesday: a cannabis commission companion and legislation aiming to tax by cannabinoid concentration and product type.
    • HB 1581, “Establishing a Washington state cannabis commission,” would be introduced by Representatives Sharon Wylie, Shelley Kloba, and Kristine Reeves, the current co-chairs and a former vice chair of the Washington State Regulated Substances and Gaming Committee (WA House RSG) where the bill was set to be referred.
    • HB 1595, “Modifying the cannabis excise tax,” was scheduled for introduction by Representatives Kelly Chambers and Eric Robertson, Republican leadership on WA House RSG where the bill was set to be referred.
      • The bill would radically overhaul the previously simplified excise tax system which levies the highest “sin” tax in the world on cannabis at 37% collected on all retail consumer transactions, including registered patients.
      • In its place, the bill proposes a tiered system grouped by product type and divided by tetrahydrocannabinol (THC) concentration (sometimes erroneously referred to as potency). The operative language would modify RCW 69.50.535 to state:
        • (i) For useable cannabis and cannabis concentrates with a THC concentration no greater than 20 percent, the tax is equal to 25 percent of the selling price on each retail sale in this state;
        • (ii) For useable cannabis and cannabis concentrates with a THC concentration greater than 20 percent but no greater than 50 percent, the tax is equal to 35 percent of the selling price on each retail sale in this state;
        • (iii) For useable cannabis and cannabis concentrates with a THC concentration greater than 50 percent, the tax is equal to 40 percent of the selling price on each retail sale in this state;
        • (iv) For cannabis-infused edible products in solid or liquid form with no greater than four milligrams of total tetrahydrocannabinol included per serving in the container, the tax is equal to 25 percent of the selling price on each retail sale in this state; and
        • (v) For cannabis-infused edible products in solid and liquid form with greater than four milligrams of total tetrahydrocannabinol included per serving in the container, the tax is equal to 35 percent of the selling price on each retail sale in this state.
      • On Monday January 23rd, the Washington State Health Care Authority (WA HCA) published its “High THC policy | Final report” executed by the University of Washington Addictions, Drug, and Alcohol Institute (UW ADAI) and backdated to its December 31st due date. While the bill makes no mention of the intent or purpose of overhauling the taxation system, the number one recommendation articulated in the report was to “Implement excise tax levels proportional to total THC content in products with greater than 35 percent THC concentration.”
        • We note that this simpler recommendation, regardless of merit, was not adopted by the bill authors.
      • However, the WA HCA and UW ADAI researchers also recommended “exempting high THC products recommended by a health care provider to registered medicinal users from this tax increase.” There is no patient exemption in the bill as introduced.
        • The prime sponsor of the bill, Representative Chambers, inquired about typical cannabinoid concentration levels in products that patients seek during the public hearing on HB 1453 (audio - 2m, video).