Washington State Tax Exemption Takes Effect for Medical Cannabis Patients

On June 6, 2024, HB 1453 took effect in Washington state, removing the requirement for patients with a medical cannabis card to pay the 37% excise tax, reportedly the highest cannabis tax in the nation (1,2). Currently, medical cannabis patients are exempt from the retail sales tax (1). The bill was signed by Governor Jay Inslee in March 2024 (2).

The exemption applies to cannabis products that comply with the Department of Health’s testing standards, which include heavy metals and other contaminants, and are purchased from locations with an endorsement for medical cannabis (1).

Speculations have arisen over the effect of the tax exemption on Washington’s cannabis market, both recreational and medical. Julie Graham, a spokesperson for Washington’s Liquor and Cannabis Board (LCB) stated in The Seattle Times (1), “Most consumers will continue to buy cannabis produced for the adult-use recreational market. But it is important that we fulfill the goals of the medical program, too, and we will watch to see if this tax exemption helps increase availability and demand for medically compliant cannabis.” The LCB has also reportedly stated that official rulemaking clarifying guidance for retailers will take place in the upcoming months (1).

Though the Evergreen State legalized medical cannabis in 1998 and recreational cannabis in 2012, the state received poor grades from the most recent Medical Cannabis Access State Report Card from Americans for Safe Access (2,3), which describes itself as “the largest national member-based organization of patients, medical professionals, scientists, and concerned citizens working to overcome political, social, and legal barriers to improve access to medical cannabis for patients and researchers” (3).

In 2022, ASA gave the state a “C” grade based on the number of points earned in categories such as patient rights, affordability, and program functionality (3). “Washington’s medical cannabis program continues to decline, and policymakers in the state have failed to make meaningful changes or improvements to the program in a number of years,” the report from ASA summarized (3). “Since passing adult use/recreational cannabis laws, the state has neglected to update or improve the state’s medical cannabis program. This has left patient needs neglected and the hurdles that exist on the medical cannabis program outweigh the few benefits the legislature has allowed to remain. This, and not the simple passing of adult use/recreational, has contributed to the stark decline in Washington’s medical cannabis population. Those still left in the program are patients that are most vulnerable, including those who are unable to receive access to their medications through the adult use/recreational program.”

Some notable changes to the recreational program have recently occurred. Residents are allowed at-home cannabis cultivation for medical uses, and patients are allowed to grow six plants, or up to 15 with a physician’s approval, though at the beginning of this year, a House committee passed a bill that would legalize at-home cultivation of a limited number of cannabis plants for recreational use (4).

Hear a firsthand account of at-home cannabis cultivation from a medical cannabis patient in Washington State in our interview series installment, “Empowerment through Education, Part IV: Medical Cannabis Grow Laws and Cultivation.”

References

1. Withycombe, C. WA medical cannabis users get break from the nation’s highest pot taxes https://www.seattletimes.com/seattle-news/politics/medical-cannabis-users-in-wa-get-a-break-from-the-nations-highest-pot-taxes/ (accessed June 10, 2024).
2. NORML, Washington: New Law Exempts Patients From Taxes When Purchasing Eligible Cannabis Products https://norml.org/news/2024/03/28/washington-new-law-exempts-patients-from-taxes-when-purchasing-eligible-cannabis-products/ (accessed June 10, 2024).
3. Americans for Safe Access, 2022 State of the States Report https://assets.nationbuilder.com/americansforsafeaccess/pages/27187/attachments/original/1675362731/StateoftheStates22_P5.pdf?1675362731 (accessed June 10, 2024).
4. McEvoy, E. Washington State Moves Closer to Legalizing At-Home Cannabis Cultivation https://www.cannabissciencetech.com/view/washington-state-moves-closer-to-legalizing-at-home-cannabis-cultivation (accessed June 10, 2024).