Jacob Redmond
Well-Known Member
Washington's marijuana prices might shrink under a bill introduced Thursday in the state House by Rep. Rep Reuven Carlyle, D-Seattle.
Right now, each wholesale and retail marijuana sale is charged a 25 percent state tax. That tax is normally charged three times – on the sale from the grower to the processor, on the sale from the processor to the retailer, and on the retail sale to a consumer. Those taxes are added into the prices charged to the processors and to the retailers – and, ultimately, to the consumers.
The trio of 25 percent taxes has increased the price of recreational marijuana in Washington, putting it as a competitive disadvantage to the loosely regulated medical marijuana market – which is not subject to the three 25 percent tax charges. Legal retail marijuana also competes with the black market, where no taxes are charged.
Carlyle's bill would eliminate the 25 percent taxes on the grower and processor sales, while bumping the retail tax from 25 percent to 30 percent. Qualified medical marijuana patients would continue to be exempt from the marijuana tax; they would pay the normal state and local sales taxes, as they do now.
Carlyle, chairman of the House Finance Committee, believes that this measure, if passed, would adjust recreational marijuana prices to where they are only 10 percent higher than medical marijuana prices. And he says that is more reasonable. "The value of safe, reliable product is only 10 percent more than the questionable quality of medical marijuana," Carlyle said.
He said his bill would only go into effect if the House and Senate pass larger legislation to consolidate the recreational and medical marijuana under one regulatory system. Currently, recreational pot is strictly regulated from growth to smoking, while medical pot has been described as "the Wild West."
Sen. Jeanne Kohl-Welles, D-Seattle, Sen. Ann Rivers, R-La Center, and Rep. Chris Hurst, D-Enumclaw, have bills – with strongly similar approaches – in play to merge the medical and recreational systems into one. Hurst and Rep. Ross Hunter, D-Medina and chairman of the House Appropriations Committee, are among the co-sponsors of Carlyle's marijuana tax bill.
Carlyle said he is not concerned about the details of how the medical and recreational systems are meshed, as long as they are legally consolidated. He described that work as largely falling to Rivers, Kohl-Welles and Hurst. "The broad consensus in Olympia is to close the medical loophole and get a handle on the wild chaos," he said.
A finance committee staff analysis done for Carlyle estimated that legal recreational pot stores will cover about 14 percent of Washington's market in the 2015-16 fiscal year. The analysis indicated that many of the marijuana reforms in play in Olympia could increase the legal pot market share to 56 percent by the 2020-21 fiscal year. The analysis concluded that 44 percent of Washington's marijuana sales will remain in the black market, regardless of what the state government does.
Under the bill, if the marijuana taxes provide more than $25 million to the state's general fund, a quarter of the collected revenue would be distributed to Washington's counties and cities. Of the distribution, the split would be 30 percent to the counties and 70 percent to cities and towns. The money would be divided among individual counties and cities according to their populations. Jurisdictions banning the growing, processing and selling of marijuana would be prohibited from receiving any of the money.
State studies predicting marijuana tax revenues are in their infancy. The current estimates are about $200 million for 2015-17 before the reforms but could be $214.5 million after the proposed tax and regulatory reforms, according to the staff analysis. The 2017-19 estimates are $354 million under the current system and $457 million after the reforms. The logic is that lowering the tax rate and the prices of pot sold at the retail stores could bring a larger share of purchases into the legal recreational pot market, generating more state revenue overall.
News Moderator: Jacob Redmond 420 MAGAZINE ®
Full Article: Reducing pot taxes might bring more buyers into state?s system - Story
Author: John Stang
Contact: Contact Us
Photo Credit: Ed Andrieski
Website: Home
Right now, each wholesale and retail marijuana sale is charged a 25 percent state tax. That tax is normally charged three times – on the sale from the grower to the processor, on the sale from the processor to the retailer, and on the retail sale to a consumer. Those taxes are added into the prices charged to the processors and to the retailers – and, ultimately, to the consumers.
The trio of 25 percent taxes has increased the price of recreational marijuana in Washington, putting it as a competitive disadvantage to the loosely regulated medical marijuana market – which is not subject to the three 25 percent tax charges. Legal retail marijuana also competes with the black market, where no taxes are charged.
Carlyle's bill would eliminate the 25 percent taxes on the grower and processor sales, while bumping the retail tax from 25 percent to 30 percent. Qualified medical marijuana patients would continue to be exempt from the marijuana tax; they would pay the normal state and local sales taxes, as they do now.
Carlyle, chairman of the House Finance Committee, believes that this measure, if passed, would adjust recreational marijuana prices to where they are only 10 percent higher than medical marijuana prices. And he says that is more reasonable. "The value of safe, reliable product is only 10 percent more than the questionable quality of medical marijuana," Carlyle said.
He said his bill would only go into effect if the House and Senate pass larger legislation to consolidate the recreational and medical marijuana under one regulatory system. Currently, recreational pot is strictly regulated from growth to smoking, while medical pot has been described as "the Wild West."
Sen. Jeanne Kohl-Welles, D-Seattle, Sen. Ann Rivers, R-La Center, and Rep. Chris Hurst, D-Enumclaw, have bills – with strongly similar approaches – in play to merge the medical and recreational systems into one. Hurst and Rep. Ross Hunter, D-Medina and chairman of the House Appropriations Committee, are among the co-sponsors of Carlyle's marijuana tax bill.
Carlyle said he is not concerned about the details of how the medical and recreational systems are meshed, as long as they are legally consolidated. He described that work as largely falling to Rivers, Kohl-Welles and Hurst. "The broad consensus in Olympia is to close the medical loophole and get a handle on the wild chaos," he said.
A finance committee staff analysis done for Carlyle estimated that legal recreational pot stores will cover about 14 percent of Washington's market in the 2015-16 fiscal year. The analysis indicated that many of the marijuana reforms in play in Olympia could increase the legal pot market share to 56 percent by the 2020-21 fiscal year. The analysis concluded that 44 percent of Washington's marijuana sales will remain in the black market, regardless of what the state government does.
Under the bill, if the marijuana taxes provide more than $25 million to the state's general fund, a quarter of the collected revenue would be distributed to Washington's counties and cities. Of the distribution, the split would be 30 percent to the counties and 70 percent to cities and towns. The money would be divided among individual counties and cities according to their populations. Jurisdictions banning the growing, processing and selling of marijuana would be prohibited from receiving any of the money.
State studies predicting marijuana tax revenues are in their infancy. The current estimates are about $200 million for 2015-17 before the reforms but could be $214.5 million after the proposed tax and regulatory reforms, according to the staff analysis. The 2017-19 estimates are $354 million under the current system and $457 million after the reforms. The logic is that lowering the tax rate and the prices of pot sold at the retail stores could bring a larger share of purchases into the legal recreational pot market, generating more state revenue overall.
News Moderator: Jacob Redmond 420 MAGAZINE ®
Full Article: Reducing pot taxes might bring more buyers into state?s system - Story
Author: John Stang
Contact: Contact Us
Photo Credit: Ed Andrieski
Website: Home
