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New Marijuana Tax Structure In Washington Should Help Reduce Prices

washington marijuana tax taxes

(image via The Cannabist)

Everyone I have talked to that has traveled to Washington to purchase legal recreational marijuana has said the same thing – it is extremely expensive. Most of the people I have talked to traveled from Oregon, which has the cheapest prices for high end marijuana in the nation, so it’s not surprising to me that they get sticker shock when they are at the cash register checking out. I think people that travel from less friendly marijuana states are more comfortable with the prices, but I also think that everyone can agree that prices need to be lower if the industry in Washington is ever to reach its full potential, and the black market is to ever go away.

I think that’s especially true now that Oregon has legalized recreational marijuana, and that limited recreational marijuana sales are expected to occur in Oregon starting October 1st. I would predict that once flower sales start in October in Oregon, very few (if any) Oregonians are going to be traveling to Washington anymore to get their recreational marijuana flower. Price is ultimately going to determine where people go, and with Washington’s old tax structure (25% x 3), there’s just no way Washington could compete with Oregon. Washington politicians seem to kind of understand that, which is why they changed the tax structure for recreational marijuana sales in Washington this last week. Per The Joint Blog:

Under current law, recreational cannabis is taxed at three different levels, 25% at each level. Under House Bill 2136, most of which takes effect tomorrow, this system will be replaced with a single 37% tax which would be paid at the point of sale between retailers and their customers.

The new law also allows jurisdictions to reduce the current restrictions limiting cannabis outlets from being located within 1,000 feet of a childcare center, public park, transit center, library or arcade; they would be allowed to reduce this to within 100 feet.

To encourage cities and counties to allow cannabis businesses, the bill directs the state to share tax revenue gained from cannabis sales only with areas that allow cannabis retail outlets.

Oregon is going to have a 20% tax structure, so while I think that the lower tax rate in Washington is going to help, I don’t think that it will help from an Oregon consumer standpoint. But, it will be good for Washington residents and for people on vacation in Washington from states that aren’t Oregon, although I think a lot of them will be traveling to Portland once rec sales start. Colorado just voted to lower it’s tax rate to 8%, although Colorado still has astronomically high prices. A one gram vaporizer pen cartridge in Oregon costs roughly $25. One of the members of The Weed Blog just traveled to Denver, where a half gram cartridge costs $70. Yet another reason why I love Oregon!

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Johnny Green


  1. davidaquarius on

    Personally, price has little to do with my weed shopping. Sure, I look for sales and specials but my focus is on quality and variety of strains. Now, if I lived in Vancouver or Walla Walla, I might feel differently but I live near Seattle so any trip to Oregon would cost far more than any savings on my purchases. Besides, I’ve developed a rapport with the budtenders at my favorites shops that translates to better service. I can purchase a gm of Dr. Who and a gm of Northern Lights as well as a 1/2 gm of White Widow shatter for around $50. I could care less about the black market and the prices they offer. If all you want is some shit to smoke that’ll get you high, be my guest. Chances are you’re smoking crap that’s been grown from questionable conditions with questionable materials. They’ll tell you that it’s the ‘bomb’ and it’s the ‘OG that Snoop smokes’ which translates to “It’s green and it gets you stoned” Naw, I don’t shop the black market, regardless of the price. Perhaps I’ve become somewhat of a pot snob but after 40 years of smoking whatever was hitting the streets, I’m going to enjoy myself.

  2. metanoia411 on

    I work in a retail store in WA. From what I understand, with the tens of thousands of dollars of product we have on the shelves that had the 25% tax on them (sometimes twice) we will lose 12% of our profit on all that. The new tax isn’t really changing the end price for consumers. Using round numbers let’s say we got a gram wholesale for $4 from a grower/processor (so only 1 25% tax) so final cost from grower/processor $5. If you’re a typical retail store doubling wholesale then we’re at $10, +25% ($12.50) and local sales taxes (let’s say 9%) in the end you’re at like $13.65 or so. Are these growers going to charge us the $4 pre tax or $5 post tax, since that is what we were paying? I don’t know yet (I suspect all the smaller growers we deal with will try to stay as close to the $5 we have been paying in this scenario). Let’s split the difference and say $4.50. Using the same retail doubling ($9) + new 37% tax at time of sale ($12.35) + 9% sales tax you’re at $13.45 or so. Big deal, 20 cents.

  3. Trust me, taxes aren’t the only thing that increases the price. Regulations are extremely expensive, so expect the bottom line for growers and processors to increase in Oregon before you even get to the taxes. Anyone who builds out will actually need to go through the local permitting process ($$), use licensed and bonded contractors ($$), pay payroll taxes ($$), extractors will need to be certified ($$), track everything in tracking software ($$ for software, $$ for employee time), etc.

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