Marijuana Moment: Washington State Law Exempting Some Medical Marijuana Purchases From Steep 37% Tax Takes Effect

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Some purchases of medical marijuana in Washington State will no longer be subject to the state’s 37 percent cannabis tax under a new law taking effect on Thursday. The exemption, signed into law in March by Gov. Jay Inslee (D), applies specifically to products that have been certified to higher testing standards than typical state-legal products.

Medical marijuana cardholders were already eligible for exemptions from Washington’s sales and use taxes on cannabis, but they were not exempt from the state’s excise tax, one of the highest in the country.

The bill, sponsored by Rep. Sharon Wylie (D) and two other Democrats allows state-registered patients and caregivers to avoid the tax when purchasing products that are compliant with Department of Health (DOH) testing standards, which are more rigorous than typical state cannabis standards. Manufacturers in the state are required to submit all medical and adult-use products to labs for testing, but producers can voluntarily have additional testing done—to screen for heavy metals, for example—that isn’t otherwise required.

Marijuana that passes the additional testing can be labeled with a DOH-developed logo, which now also serves as an indication that the product is tax-free for patients and caretakers.

Many states with both adult-use and medical marijuana already exempt patients from taxes.

Washington’s tax break is only temporary. As written, the new law is set to expire on June 30, 2029. A report by the Joint Legislative Audit and Review Committee on the revenue impacts of the change is due in 2028.

One of the bill’s co-sponsors, Rep. Shelley Kloba (D) also sponsored a cannabis homegrow bill this session—the latest in a series of such measures introduced over the past several years—but the proposal ultimately died in committee. If passed, HB 2194 would have allowed adults 21 and older to grow up to four plants per person, with no more than 10 allowed per household. Home cultivation of marijuana without a medical marijuana card remains a felony in the state.

Kloba told Marijuana Momentthat she’s co mmitted to continued advocacy for the policy change and plans to introduce yet another homegrow measure next year.

“I am committed to this issue, and plan to run a bill again next session,” she said. “Every session has its own character and constraints, which so far have meant that the bill has not advanced to the Senate. But I am not giving up.”

Washington voters legalized marijuana for adult use through a ballot measure in 2012.

Another cannabis bill introduced in Washington this session would have rolled back recently enacted protections for job applicants who use marijuana, undoing anti-discrimination protections for people seeking to work in the drug treatment industry. It did not receive committee consideration in time to advance, however.

Lawmakers also introduced legislation to create a legal system to allow veterans and first responders to access psychedelic-assisted therapy. The measure would have built on a limited pilot program signed into law last year, but it also did not advanced after being filed.

Late last year, the state’s Department of Commerce issued recommendations regarding how $200 million should be spent to address racial, economic and social disparities created by the war on drugs. Washington has also approved $10 million in refunds for vacated drug convictions.

In April, meanwhile, state marijuana regulators began amending rules related to social equity ownership of cannabis businesses, an effort to encourage more diverse ownership and reduce obstacles to licensing, including from past drug-related convictions.

Teen Marijuana Use Has Declined In Washington Since Legalization, New State Research Shows

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