House panel hears bill to tax medical marijuana sales
OLYMPIA, Wash. (AP) - More than a dozen people, many of them medical marijuana patients or providers, testified Monday against a measure to tax medical marijuana dispensaries, an effort to undermine any black market when sale of state-taxed recreational marijuana starts at the end of this year.
The bill, which had a public hearing before the House Finance Committee, would hit dispensaries with a tax equal to 25 percent of their sales of cannabis and cannabis-infused products.
The bill sponsors have said they're trying to avoid a dual market - one taxed, one not - as the state moves toward creating a regulated system for the fledgling marijuana industry created by Initiative 502.
In November, voters approved the initiative that allows adults over age 21 to have up to an ounce of pot. The state is due to start issuing licenses to marijuana growers, processors and retail stores, with the marijuana taxed 25 percent at each stage.
"If we don't equalize taxes, we run an even greater risk of a black market and we set the stage for substantial market distortions," Rep. Reuven Carlyle, a Seattle Democrat who is a co-sponsor of the measure, said after the hearing.
Currently, retail sales of medical cannabis are subject to sales tax. The measure heard in the House would add an excise tax above and beyond what the dispensaries are already supposed to be collecting.
The state Department of Revenue has listed more than 50 medical marijuana dispensaries that collected and submitted sales taxes last year, but spokesman Mike Gowrylow said there are countless others in existence that have not submitted sales tax.
Prescription medications aren't taxed in Washington, and those in the medical marijuana community have argued that because medical marijuana requires a doctor's authorization, it should fall into that category.
"The medical and the recreational need to be treated in two different, completely separate categories," said Stephanie Viskovich, director of the Cannabis Action Coalition and president of a collective garden who is also a medical marijuana patient.
Pharmacies licensed by the Department of Health are exempt from the tax under the measure. But because marijuana is currently classified as a Schedule 1 drug, it's not accepted for medical treatment and can't be prescribed, administered or dispensed.
Carlyle said that the pharmacy exemption was included for the possibility that marijuana is ultimately reclassified by the federal government.
Washington voters approved a medical marijuana law in 1998 that gives doctors the right to recommend - but not prescribe - marijuana for people suffering from cancer and other conditions that cause "intractable pain."
Medical patients are allowed to grow their own 15 plants or designate someone else to grow for them, and true community gardens of up to 45 plants and 10 patients are allowed under current law. None of that would change under the measure heard Monday.
The state's medical marijuana law provides only for community gardens by which patients can share their marijuana with each other. The initiative is silent on the regulation of dispensaries.
In 2011, then-Gov. Chris Gregoire and Rhode Island Gov. Lincoln Chafee filed a petition with the U.S. Drug Enforcement Administration asking the agency to reclassify marijuana. If marijuana were listed as a Schedule 2 drug, it would be able to officially be used for medical treatment, and pharmacists could dispense the drug.
Opponents argued that the rate of taxation under the proposed measure is unfair, especially to low-income people who need it as part of their health care.
"We need to bring the price of medical cannabis down for medical marijuana patients, not up," said Ezra Eickmeyer with the Washington Cannabis Association. "It would certainly be a mistake to do anything that increases the cost of medicine to sick patients."
Carlyle said the bill is a first draft, and he'll continue to work to refine it, but expects that some version of the bill will pass out of his committee.
The state Liquor Control Board is in the process of developing rules for the new industry, possibly including such measures as digital tracking of inventory to prevent diversion to the black market. Sales are set to begin late this year.
The bill is one of several marijuana-related measures pending in Olympia. One would allow anyone with a misdemeanor pot conviction to have their record cleared and another would protect medical marijuana patients from arrest.
The excise tax on dispensaries would bring in $7.9 million dollars through 2015, according to a fiscal note put together by the state Office of Financial Management.
Last week, Gov. Jay Inslee sent U.S. Attorney General Eric Holder a letter detailing the efforts the state is taking as it moves forward with creating rules for the legal market for marijuana.
David Postman, a spokesman for Inslee, said that the governor has not yet taken a position on the dispensary tax bill, "but we are looking carefully at every marijuana bill in light of the governor's pledge to implement the initiative in a responsible way."
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The measure is House Bill 1789.
The bill, which had a public hearing before the House Finance Committee, would hit dispensaries with a tax equal to 25 percent of their sales of cannabis and cannabis-infused products.
The bill sponsors have said they're trying to avoid a dual market - one taxed, one not - as the state moves toward creating a regulated system for the fledgling marijuana industry created by Initiative 502.
In November, voters approved the initiative that allows adults over age 21 to have up to an ounce of pot. The state is due to start issuing licenses to marijuana growers, processors and retail stores, with the marijuana taxed 25 percent at each stage.
"If we don't equalize taxes, we run an even greater risk of a black market and we set the stage for substantial market distortions," Rep. Reuven Carlyle, a Seattle Democrat who is a co-sponsor of the measure, said after the hearing.
Currently, retail sales of medical cannabis are subject to sales tax. The measure heard in the House would add an excise tax above and beyond what the dispensaries are already supposed to be collecting.
The state Department of Revenue has listed more than 50 medical marijuana dispensaries that collected and submitted sales taxes last year, but spokesman Mike Gowrylow said there are countless others in existence that have not submitted sales tax.
Prescription medications aren't taxed in Washington, and those in the medical marijuana community have argued that because medical marijuana requires a doctor's authorization, it should fall into that category.
"The medical and the recreational need to be treated in two different, completely separate categories," said Stephanie Viskovich, director of the Cannabis Action Coalition and president of a collective garden who is also a medical marijuana patient.
Pharmacies licensed by the Department of Health are exempt from the tax under the measure. But because marijuana is currently classified as a Schedule 1 drug, it's not accepted for medical treatment and can't be prescribed, administered or dispensed.
Carlyle said that the pharmacy exemption was included for the possibility that marijuana is ultimately reclassified by the federal government.
Washington voters approved a medical marijuana law in 1998 that gives doctors the right to recommend - but not prescribe - marijuana for people suffering from cancer and other conditions that cause "intractable pain."
Medical patients are allowed to grow their own 15 plants or designate someone else to grow for them, and true community gardens of up to 45 plants and 10 patients are allowed under current law. None of that would change under the measure heard Monday.
The state's medical marijuana law provides only for community gardens by which patients can share their marijuana with each other. The initiative is silent on the regulation of dispensaries.
In 2011, then-Gov. Chris Gregoire and Rhode Island Gov. Lincoln Chafee filed a petition with the U.S. Drug Enforcement Administration asking the agency to reclassify marijuana. If marijuana were listed as a Schedule 2 drug, it would be able to officially be used for medical treatment, and pharmacists could dispense the drug.
Opponents argued that the rate of taxation under the proposed measure is unfair, especially to low-income people who need it as part of their health care.
"We need to bring the price of medical cannabis down for medical marijuana patients, not up," said Ezra Eickmeyer with the Washington Cannabis Association. "It would certainly be a mistake to do anything that increases the cost of medicine to sick patients."
Carlyle said the bill is a first draft, and he'll continue to work to refine it, but expects that some version of the bill will pass out of his committee.
The state Liquor Control Board is in the process of developing rules for the new industry, possibly including such measures as digital tracking of inventory to prevent diversion to the black market. Sales are set to begin late this year.
The bill is one of several marijuana-related measures pending in Olympia. One would allow anyone with a misdemeanor pot conviction to have their record cleared and another would protect medical marijuana patients from arrest.
The excise tax on dispensaries would bring in $7.9 million dollars through 2015, according to a fiscal note put together by the state Office of Financial Management.
Last week, Gov. Jay Inslee sent U.S. Attorney General Eric Holder a letter detailing the efforts the state is taking as it moves forward with creating rules for the legal market for marijuana.
David Postman, a spokesman for Inslee, said that the governor has not yet taken a position on the dispensary tax bill, "but we are looking carefully at every marijuana bill in light of the governor's pledge to implement the initiative in a responsible way."
___
The measure is House Bill 1789.
What, exactly, is the point of medical marijuana with marijuana being legal and all? Itâs kind of like getting a prescription for aspirin and then buying it over the counter.I say tax the crap out of it.
@Bianca So are you suggesting that the state should put a 75% or more tax on hemorrhoid cream and Lotrimin?
@Bianca You can grow your own as well as be in possession of a greater amount as a medical patient.Â
Until The Federal Government backs off.......  I see no possible way for them to legally tax or even discuss taxing marijuana....  Someone needs to take the Federal Government to court and challenge their 100% illegal position pertaining to marijuana...
@Funky-Munky , the citizens of WA. state gave our representatives the power to legally license,regulate and tax MerryWanna.we don't need the Feds permission.
@Justin Hale Easy there red-rider..... States Rights have not been established pertaining to marijuana.... I agree the Federal Government can shove it pertaining to legalization....
Some helpful research for the skeptics - time to read up people, then decide for yourself. Â Break the taboo. Â Sadly, I was just like you a few months ago. Â Hit up a search engine for cannabis testimony. Â
http://www.google.com/patents/US6630507
http://www.cancer.gov/cancertopics/pdq/cam/cannabis/healthprofessional/page4
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1253627/
@Hueski Yeah, so the big pharmas will try to get the state to hand over all control to THEM, and then outsource the supply chain to the Zetas and we will be even worse off!Â
We must not only allow but encourage grow-your-own as a or perhaps the primary source. Thus take the criminal element right out of the equation.
There are many issues to look at here, marijuana is currently classified as a Schedule 1 drug and is done so in violation of Congress. On Jan. 22, 2002, The U.S. Congress re-wrote the drug laws for the United States. Under Federal Code 21 USC 812, Sub-Section (B) it is made very clear that the drug in question have NO ACCEPTED MEDICAL VALUE from ANYONE in the United States. The reason Congress did not list the FDA as the "source" is because Congress knew GREED could get in the way. Under guidelines of the FDA, for them to allow for use of Cannabis they have to be able to re-create the whole plant in the lab. You can NOT do that with a marijuana plant, no more then you could do that to an oak tree or a human baby. If the State really wants to make Millions, here is how to do that; It has come to my attention that the State of Washington owns; Lake Leota, Lake Joy, Pipe Lake, Lake Lucerne, Lake Marcel, Lake Burien. I have put in a public records request to find out if ANY Tax money from the general funds are being used for these lakes. It has come to my notice that the GENERAL PUBLIC is not allowed by law to these lakes, while the people living on them can go boating and swimming. At a time when the poor are getting services cut and hospitals, Schools and Post Offices are getting shut down Why is the sick getting taxed more? The Public should not be paying millions for lakes that we are not allowed to use.
I personally struggle with insomnia and depression as well as fibromyalgia and a host of other issues. The scariest part for me is that you are able to get a medical marijuana card by visiting someone who isn't your doctor, paying them to look over your records, and then give you marijuana for any host of diseases. When in reality, this drug needs to be taken care of like any other drug. My doctor for instance, warned me that it would actually cause more harm than good in my case and to stay far away from it. However, a marijuana clinic says that it would be good for me. I would trust the opinion of my primary care doctor first and foremost. And yes, I did get a second opinion and they stated the same thing. I hope that it will be regulated like any other prescription as far as medical use goes.
@Christopher Lehnherr BS story........ I am 100% happy you don't smoke marijuana... You would have a panic attack!
@Christopher Lehnherr .... wow. You should actually do some research sir.  I have been doing research since the legalization.  The United States Dept of Heatlth and Social Services has a patent on MJ for a neuroprotectant - that would be medically beneficial, correct? - http://www.google.com/patents/US6630507
You should look into testimonials of people with your issues. Â
Cancer.gov states Cannabinoids kill or stop certain types of cancers from growing. -Â http://www.cancer.gov/cancertopics/pdq/cam/cannabis/healthprofessional/page4
A researcher from Canada found that THC actually creates neurons, not like what I have been told my whole life. Â http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1253627/
Endocannabinoids are found in mother's milk and are essential to human development.
What I have found is amazing, but sad, considering I was never an advocate for this stuff. Â But actually researching and looking into real people's testimony where they aren't trying to sell you anything or make a profit, does hold value. Â There is too much positive testimony for myself to look the other way. Â I have been lied to.
The medical industry isn't into curing anything, it's not profitable. It's more profitable for you to "live" with something and take meds for the rest of your life. Â
You might want to research Rick Simpson oil as well.Â
Good luck in your research. Â And as your doctor says, don't believe everything you read on the internet, which holds true to, don't believe everything your doctor tells you.
Medical marijuana is a joke. For a few hundred bucks or less anyone can get a "prescription". Tax it like booze and tobacco.
@Common Sense I wonder if they tax tobacco that you grow in your garden... I know you can do home brew and wine and now even private distilling with some oversight. Screw this as a revenue source: the effort needs to be to make is so cheap that the cartels die of atrophy. If revenue is the issue, just think of all the costs in the police, prosecutor's office, courts and jails/prisons that can now be dispensed with. It's a Conservative's dream: cut spending instead of raise taxes!
@Common Sense To many stories have been shown that exposed the joke of medical pot prescriptions.
@Snoop @Common Sense so...WHAT??? It is legal either way now. DEAL with it!
@Snoop Have you ever used it for medicine? didn't think so.... So in essence you two jokers know squat... Ha!
@Snoop @Funky-Munky , This is what Dr.Donald Tashkin thought and he got NIDA to pay for his research to prove that Cannabis smoking had to be as bad as smoking cigarettes, he found just the opposite,Google it ,switch to smoking MJ for your health.
@Funky-Munky No use in arguing with ignorant buttinskis. They have no idea what they are chattering about... they just think they do. Their opinions aren't worth a pot to pee in.
@Common Sense I personally think the State should look into raising the license fees on these so called doctors that are writing the prescriptions.
@Snoop a road side quack
Just where did you get your pot prescription ,,,, Walmart ?
@Funky-Munky  I do know you wanted it legalized AND taxed ,, you unknowingly gave the state permission to tax and now you are crying foul. Buck up and pay the dues.Â
@Snoop Good luck snoop....  You're in fact a wet blanket with zero knowledge pertaining to Legalization or Medical Marijuana. Preach to the choir....
@Funky-Munky Why would I quit tobacco and then fill my lungs with more than 22 of the same carcinogens that are shared with pot. Every natural vegetation gives off harmful chemicals when burned ,, but yet dopers swear its not one bit harmful.Â
Whatever.... I smoke recreational and medicinally... I exempt myself from the kings tax.
@Funky-Munky Thats my point ,,, how am I to feel any empathy for your habit. Do you really need pain relief or are you addicted? simple answer ,, tax both. It aint rocket science.
@Snoop @Funky-Munky WHY - precisely - should you CARE???
@Snoop @Funky-Munky , grow your own,screw taxes.
@Snoop So you're a promoter of what you perceive to be a "Sin Tax"that explains a bit about you.....
Wonder if your illness will be covered under Obama care ? Maybe us tax payers will foot the bill for your medical pot ,,, if its covered.
@Funky-Munky Great ,, glad you like it. Party on Garth,,,,,,
@Snoop ridiculous.... I smoke because I enjoy it and find it to be an excellent natural medicine.... :D)
@Funky-Munky I am willing to bet your one of those users that says they can quit anytime you want.
@Funky-Munky I,m not a gardener either ,, so where you headed with that?
@Snoop  @Funky-Munky Do you pay tax on the vegetables you grow at home to eat?
@Snoop reformed smoker? Oh, now we're getting somewhere... Â
@Funky-Munky Sure do ,, I pay the tax on my beer. I have the choice to pay or brew my own or quit. I stopped tobacco 12 years ago because the cost was prohibitive. I feel a 1000% better health wise and dont have a monkey on my back anymore.Â
I can see the feds taxing recreational marijuana, but taxing medical marijuana is wrong.
If prescription meds aren't taxed in Washington State then why should medical marijuana be taxed? As far as I am concerned, the State isn't trying to "undermine any black market" by taxing mmj. In fact, they are just going to drive people to obtain their pot on the black market to avoid paying unreasonable taxes on their medication.
@Tattooed_Angel EXACTLY!!!!!!!!!
@Tattooed_Angel ,It's not an FDA approved medicine therefore it cannot be prescribed. MJ is more like a herbal medicine,and you do pay taxes on herbs,same should be applied to MJ.I can grow many herbs in my garden tax free of course,the same should be applied to MJ, if I want a herb that I cannot grow I pay a tax on it,same should be applied to MJ.
@Tattooed_Angel Blaspheme! How dare you speak the truth!
@Tattooed_Angel  But you guys said "legalization" would make the illegal smugglers and drug cartels go away. Am I right or did I mis-read your signs ?
wow black market should get busy.why not just make it the regular state sales tax.
I think its wrong to tax medicine.
"If we don't equalize taxes, we run an even greater risk of a black market and we set the stage for substantial market distortions," Rep. Reuven Carlyle, a Seattle Democrat who is a co-sponsor of the measure, said after the hearing.
When did the 'black market' ever pay taxes? Yer that stoopid?
Every time you dolts add a tax or some other infringement, it only serves to make the 'market' more profitable.
Make pot a hundred bucks an ounce, tax it at 50%, and who's reaping the rewards? Smugglers!
All of a sudden we get an influx of smuggling (cuz it's WAY cheaper on the streets), and you get ZIP!
How do you folks keep getting elected? Seriously! Yer stoopidity is astounding!
All yer greed is doing is creating MORE of an underground movement. Ya want to eliminate the cartels, and turn around and
support them with yer ignorance.
My cat knows who feeds it and changes the litter box, and you got no clue?
Dayum!
I'd rather make a quarter off a million people than $100 off a thousand people. Does that make too much sense?
.
Just sell it already.
There's the first salvo - they're trying to put the dispensaries out of business. As well they're going to price their taxed cannabis too high and not only will tax collections suffer but the black market will be....re-energized as well. Just watch, they're going to screw this up. They don't need a "pot czar", this program needs a POT DICTATOR who knows and leans towards a more free market approach and who realizes what's really at stake here. Success means the state & local govts will have more tax revenues than they can currently imagine and the tax paying public gets several different brands for sale at numerous locations at a less than it is now price. Failure is anything else....
@Silverado54 , get a MedMJ reccommendation and grow your own.