Stoner Education

Cannabis Taxation in Wa Explained

Well it’s quite apparent from the reaction to our social media post, paying $75 for an 1/8th of cannabis is a ridiculous concept to most stoners. There were calls to return to the legacy market for more fair pricing. LOL Can you imagine that being the solution in a state which was one of the first to legalize and has such a wide array of products available for adult use? Our working hypothesis is that it’s the inflated tax rate that drives the legacy market here in Washington. Meanwhile the state allotts funds from said earnings to the state patrol and local governments to combat those “illicit” markets. #SUS

Let’s quickly break down how retail shops determine their prices for products with what feels like price gouging tactics. Firstly, when you see a price presented at an adult use shop in Wa, it standardly includes tax. That tax consists of the state’s 37% marijuana excise tax, 6.5% state and various local sales tax. Secondly, know that as a result you’re seeing what is typically a 3 times markup on purchase price. Most shops will charge a 4.5 time markup on speciality drops, with the egregious ones charging those prices regularly. Imagine the dispensaries as one hell of a middle man connecting you to the plugs.

This knowledge led to a few questions on our end, such as: What does Wa state do with their cut of the money and are dispensaries reinvesting their profits into their staff and the community? It’s clear that the community needs to take a larger role in questioning business owners in I502. Ask any former employee in this hybridized retail/sales business and you’ll learn there are high budtender turnover rates, numerous unionization efforts, and a general unwillingness to pay for overpriced products by consumers.

Thanks to CrossCut we gained answers regarding how funds are spent in something other than the legalese the state released with the passing of I502. Currently Washington cannabis revenues are spent on the General Fund(public schools), Apple Health(medicaid), licensing/ enforcement via the LCB Board & Wa State Patrol, education & prevention via Department of Health, research(UW & WSU studies) and local government that agrees to have dispensaries within their boundaries. In the article, legislators clarify that while a large sum is earned yearly from cannabis revenue it is a small portion of the state’s budget, and that its allocations are unlikely to be altered as programs are extremely dependent on those funds.

As always, we like to step back and look at the big picture. There are 18 states that have legalized adult use and yet Wa has the highest tax rate. What are they accomplishing by having an approximately 37% excise tax rate that other states aren’t? The obvious answer is that Washington’s Apple Health(Medicaid) also pays for dental care and is relatively easy to use if you KNOW about it. However, it also receives the largest chunk of the funds. So there must be options for fund reallocation and the idea that cannabis tax money being spent on criminalization of cannabis doesn’t sit right with us.

In the last decade of legal cannabis one thing is apparent, consumers will set the prices. While a few might purchase a product off of hype, customers will consistently purchase at what they determine is fair market value for their products. If not like true stoners, they find a way to skirt the established system by discount hunting, getting a mmj card or even returning to the legacy market.

Let us know how much you pay per 1/8th in the comments down below!

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