Washington Dispensaries Could See Regulatory Changes Modeled After I-502 Rules

The legalization of cannabis in Washington could trigger huge changes in the state’s medical marijuana laws and policies this year.

Case in point: Two state lawmakers have introduced a bill that would slap a 25% tax on medical cannabis sales at dispensaries. The proposed tax rate is similar to the one Washington will levy on recreational marijuana sales at retail cannabis shops under Initiative-502. If the bill passes, existing dispensaries would have to charge patients significantly more for medical marijuana, and that could ultimately limit growth.

“My concern is that if we have an identical product being sold with two different tax schemes we are likely to have significant leakage of recreational use into the medical channel,” State Rep. Ross Hunter, who spearheaded the legislation with Rep.┬áReuven Carlyle, said in a release. “This will create a black market and put us at serious risk of federal intervention.”

Expect more of these types of proposals throughout the year. Even though the medical and recreational programs are two different beasts, officials will try to align the two programs closely together. In fact, the state could very well restructure its medical marijuana regulations based on the new program covering retail cannabis sales, not the other way around.

That’s a different scenario than the one playing out in Colorado, where officials are relying heavily on the current regulatory structure covering medical marijuana as they craft rules for the sale of cannabis for adult use.

The reason for the different approaches is clear. Colorado has tight, comprehensive and effective regulations on the production and sale of medical marijuana. Washington’s medical marijuana program, on the other hand, is somewhat of a mess. The state’s MMJ law technically doesn’t provide for dispensaries, allowing only community gardens where patients can share cannabis. Yet roughly 125 centers currently exist – including a fair share of for-profit dispensaries – because some cities have taken a lenient approach to enforcement.

That means there are virtually no MMJ-specific regulations on these businesses. So it’s not surprising that the state would avoid modeling its retail marijuana industry after its medical one.

But Washington is in a bit of a quandary. Introducing regulations on dispensaries piecemeal essentially legitimizes them even though they are technically illegal. A broader solution is needed to clear up the situation for good. Eventually, we could see the two programs merge into one that would cover all marijuana operations, medical or otherwise.

4 comments on “Washington Dispensaries Could See Regulatory Changes Modeled After I-502 Rules
  1. Jim Gabrisch on

    Merging the programs could make for some interesting stores. Sort of like liquor stores.
    On the “PBR and plonk wine” side one could buy the recreational “patio grown”, $5/gram shake and floor-sweepings. The other, “craft brews and fine single malts” side would be the “medical grade” buds, control-grown,lab-tested,ragrently-sticky,
    $50/gram product. Gonna be INTERESTING.

    Reply
  2. Jerry Chin on

    A 25% excise tax on marijuana, medical or recreational, would create a tax black market. I GUARANTEE, the higher the tax rate WA sets, the LOWER the collected revenues will be. This is the case for any tax in the world. High excise taxes will push legal recreational marijuana selling away from regulated companies, to unregulated private sellers skirting the tax system. The black market will no longer be in selling marijuana, but in not paying the 25% excise tax.

    I understand the position the state has. Washington wants to make money on marijuana. They are just like the ganjapreneurs, they want to make money off this green rush too. But what applies to market participants, also apply to bureaucrats…bulls make money, bears make money, pigs get slaughtered. Dear Washington regulators, don’t be so greedy with the tax revenue. Let everyone make money, including the state revenue department.

    And if the real reason behind the high excise tax is meant to curb use of marijuana, then I guess we really haven’t turned a corner on the failed drug wars yet.

    Reply
  3. dan Porras on

    We dont need the laws to mix, making me pay for one kind of meds is not right. I still ge tpills no one talkin gabout taxing that, But my MMJ you can keep your hands off..

    Reply

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