HB 2075
In CommitteeHouse
High THC cannabis excise tax
Increasing the cannabis excise tax on high THC cannabis products.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill raises the state cannabis excise tax from 37% to 50% on high-THC products (concentrates and useable cannabis with THC > 35%), while keeping the 37% rate for lower-THC products. It also extends the medical exemption for qualifying patients through June 30, 2029, and strengthens reporting and compliance requirements for retailers and the state.
- Increases the cannabis excise tax from 37% to 50% on high-THC products: cannabis concentrates and useable cannabis with THC concentration greater than 35%.
- Maintains the 37% tax rate for lower-THC products: cannabis concentrates, useable cannabis, and cannabis-infused products with THC ≤ 35%.
- Requires the 37% and 50% taxes to be itemized separately on sales receipts and included in shelf/advertised prices.
- Extends the medical cannabis exemption (for qualifying patients and providers) through June 30, 2029, for compliant products with THC ≤ 35%.
- Requires the Liquor and Cannabis Board to regularly review tax levels and report to the legislature on market impacts, illegal market activity, and tax revenue trends.
Who is affected
- Cannabis consumers — Retail cannabis consumers who buy high-THC products (concentrates or useable cannabis with >35% THC) will pay a higher tax—50% instead of 37%—on those items.
- Cannabis retailers — Cannabis retailers must collect the higher tax on high-THC products, itemize it separately on receipts, and include it in advertised prices; they also face personal liability if they fail to collect or remit the tax.
- Medical cannabis patients and providers — Medical patients and designated providers with a medical cannabis endorsement may still buy compliant products tax-free until June 30, 2029, if the retailer maintains proper eligibility records.
- Washington State Liquor and Cannabis Board — The Washington State Liquor and Cannabis Board (LCB) must track and report on tax impacts, illegal market activity, and sales trends, and make recommendations to the legislature.
Pro/Con Analysis
Potential Benefits (5)
Extending the medical exemption through 2029 ensures low-income medical patients and providers can still access compliant (≤35% THC) cannabis products tax-free—reducing barriers to care for people with qualifying conditions who rely on cannabis for symptom management.
HealthcarePeopleRef: Sec. 1(2)(a)Maintaining the 37% rate on lower-THC products (including infused products ≤35% THC) helps keep entry-level cannabis prices more affordable, supporting price-sensitive consumers and encouraging safer, lower-potency alternatives.
FinancialPeopleRef: Sec. 1(1)(c), (d)The tax differential (50% vs. 37%) may discourage consumption of high-THC products, which are associated with higher risks of adverse psychological and cognitive effects—potentially improving public health outcomes, especially among youth and vulnerable populations.
Public SafetyPeopleRef: Sec. 1(6)(a)Mandating regular review and legislative reporting on tax impacts, illegal market activity, and revenue trends improves transparency and data-driven policymaking—helping local governments anticipate market shifts and allocate enforcement or public health resources accordingly.
Local GovernmentLean peopleRef: Sec. 1(6)(a)By keeping taxes lower on infused products (e.g., edibles, tinctures) ≤35% THC, the bill supports safer consumption alternatives that may reduce inhalation-related respiratory issues—potentially lowering long-term healthcare costs and supporting housing-stable, community health.
HousingLean peopleRef: Sec. 1(1)(c), (d)
Potential Concerns (5)
Higher excise tax on high-THC products (50% vs. 37%) increases out-of-pocket costs for consumers who purchase concentrates or high-THC flower, disproportionately affecting low- and middle-income users who rely on these products for affordability or medical reasons.
FinancialIndustryRef: Sec. 1(1)(b)Retailers face increased compliance burdens (separate itemization, price labeling, personal liability for tax collection failures), which may strain small operators and increase operational risk—especially for mom-and-pop shops lacking legal or accounting support.
Business & EmploymentIndustryRef: Sec. 1(1)(b), (d); Sec. 1(4)Raising taxes on high-THC products may incentivize consumers to seek cheaper or unregulated sources, potentially expanding the illegal market and undermining public safety goals—especially if legal prices rise faster than inflation or competitor states (e.g., Oregon) do not match increases.
Public SafetyIndustryRef: Sec. 1(6)(a)The tax increase may reduce demand for high-THC products, pressuring processors and cultivators of high-THC flower and concentrates—particularly small- to mid-sized farms—leading to reduced output, layoffs, or consolidation into larger players with deeper margins.
Business & EmploymentLean industryRef: Sec. 1(6)(a)While the bill increases state revenue, the dedicated cannabis account’s use is not specified in this bill—meaning future legislatures could redirect funds away from public health or equity programs, reducing long-term benefit to communities most impacted by prohibition.
FinancialRef: Sec. 1(6)(a)
Who Is Most Affected
Low- and middle-income cannabis consumers—especially those using high-THC products—will pay more per unit, potentially reducing consumption or pushing them toward the illegal market. Medical patients with ≤35% THC products benefit from continued tax exemption, but those needing high-THC products for relief face higher costs.
Retailers face new compliance costs and liability exposure, especially small operators. However, those selling primarily ≤35% THC products face no tax increase and may gain market share if consumers shift away from high-THC items.
Medical patients and providers benefit from extended tax exemption through 2029, but only for compliant (≤35% THC) products—those requiring high-THC formulations for conditions like severe epilepsy or PTSD may still face financial strain.
The LCB gains new reporting and review responsibilities, increasing its oversight capacity. This could strengthen evidence-based policy but also adds administrative burden without additional funding specified.
Small to mid-sized cultivators and processors of high-THC products may see reduced demand, while those producing ≤35% THC infused products may benefit from stable pricing and demand—potentially accelerating industry consolidation.