Washington State Gets Closer to a Single Marijuana Marketplace

Washington State Single Marijuana MarketplaceLast week, the Washington State House passed its own version of a bill that seeks to repair both Initiative 502 for recreational marijuana and current medical marijuana laws. The goal of this bill is to make I-502 businesses more competitive with the existing medical and illegal marketplaces and to ensure harmony between recreational and medical cannabis businesses and users. At the same time, the House also amended Senate Bill 5052 (which already passed the Senate). SB 5052 seeks a grand cannabis overhaul, rolling into one program both medical and recreational cannabis. After the revisions made to the bill by the House, SB 5052 convened a successful concurrence vote in the Senate and is now headed to Governor Jay Inslee’s desk for signature into law. And HB 2136 moves to a Senate committee for consideration.

It is important to note that HB 2136 only becomes law if SB 5052 takes effect. To fully understand the effects of HB 2136, you need to know some of the following key changes the House made to SB 5052:

  • Where the Senate made a state patient registry mandatory, the House has made it voluntary.
  • Patients who fail to register with the state will not enjoy the same tax breaks or increased possession amounts that registered patients will. Patients that register themselves with the state and obtain a state-issued patient authorization card “may purchase at a retail outlet holding a medical marijuana endorsement a combination of the following: Forty-eight ounces of marijuana-infused product in solid form; three ounces of useable marijuana; two hundred sixteen ounces of marijuana-infused product in liquid form; or twenty-one grams of marijuana concentrates.”
  • Patients who opt to register with the state may also “grow, in his or her domicile, up to six plants . . . and possess up to eight ounces of useable marijuana produced from his or her plants.”
  • If a patient foregoes the registry, he or she will only be legally entitled to the same single ounce of useable marijuana as all other adults 21 and older can possess under I-502.
  • The creation of a medical marijuana consultant certificate which will allow qualified individuals to assist patients with their education and their selection of cannabis products at retail outlets.
  • Increased requirements for employee training on medical marijuana education.

HB 2136, sponsored by Democratic Representative Reuven Carlyle, which passed the House by a vote of 67-28 contains the following highlights:

  • Elimination of the three-tier 25% excise tax structure, replacing it with a single excise tax of 30 percent at the point of sale.
  • Where HB 2136 contemplates that qualifying patients will be accessing I-502 retail stores, the bill mandates that recreational users and qualifying patients will be liable for paying the foregoing tax at the time of sale.
  • Qualifying patients that submit to the voluntary patient registry set forth in SB 5052 will be exempt from paying any sales tax on their cannabis purchases. However, if qualifying patients forgo the patient registry, they will have to pay the sales tax. Still, the question of whether sales tax applies to the sale of cannabis for medical use is currently being litigated in the Court of Appeals. See Medical Marijuana: Can You Tax A Prescription?
  • Cities and counties would receive a direct cut of marijuana tax revenues — which they currently do not get. But for cities and counties to get marijuana tax revenues, they cannot ban marijuana.
  • The residency requirement to possess a Washington State cannabis license will increase to six months from the current 90 days.
  • The creation of a marijuana research license and research facilities, which will have their own footage and security requirements.
  • Delivery and transportation of I-502 cannabis and cannabis products by non-licensee, third-parties who qualify as “licensed, armed private security guards.”

Nothing in either bill changed the merging of medical and recreational cannabis under the control of the Washington State Liquor Control Board, and neither bill changed anything regarding the closure of medical marijuana collective gardens by summer of 2016.

Like it or not, big changes are surely ahead for Washington’s current medical marijuana industry. There is a very good chance that Governor Inslee is going to sign off on the revised version of SB 5052. Even if HB 2136 does not make it out of committee or somehow stalls, it likely will not stop SB 5052’s momentum. So even if no significant changes are made to the whole of I-502, big transitions lay ahead for medical marijuana.

Get ready and stay tuned.

*This post has been updated as of 4:20 p.m. on April 15, 2015.