SB 6328
In CommitteeSenate
Cannabis excise tax
Concerning the cannabis excise tax.
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 replaces Washington’s current 37% flat cannabis excise tax with a new tiered tax based on product type and weight or THC content, while preserving the medical cannabis tax exemption through 2029. It also tightens reporting and compliance requirements for retailers and the Liquor and Cannabis Board.
- Replaces the existing 37% flat excise tax on cannabis sales with a tiered tax based on product type and weight or THC content: $/gram for usable cannabis and prerolls, $/gram for trim, and $/mg of THC for concentrates, edibles, and topicals.
- Maintains the medical cannabis tax exemption for qualifying patients and designated providers through June 30, 2029, requiring retailers to track and report exempt sales separately.
- Requires retailers to separately itemize the excise tax on receipts and include it in shelf pricing and advertising.
- Adds new reporting requirements for the Liquor and Cannabis Board to the legislature (biennially until January 1, 2025), including comparisons of legal vs. illegal market activity and sales data.
- Clarifies that all cannabis excise tax revenue goes into the dedicated cannabis account (not general fund), and prohibits price-fixing or antitrust violations among retailers.
Who is affected
- Cannabis retailers and licensees — Retail cannabis businesses must now collect and remit a new tiered tax based on product weight or THC content, and must separately itemize the tax on receipts. Medical cannabis retailers with a medical endorsement may continue to sell tax-free to qualifying patients until June 30, 2029, but must maintain eligibility records.
- Medical cannabis patients and designated providers — Medical patients and designated providers who hold a recognition card and purchase compliant medical cannabis from licensed retailers are exempt from the excise tax through June 30, 2029.
- Washington State Liquor and Cannabis Board — The Washington State Liquor and Cannabis Board must implement the new tax structure, collect the tax, provide reporting to the legislature, and adopt rules for license forfeiture and tax reporting.
- State of Washington (fiscal administration) — The state’s general fund receives no direct benefit from this tax—revenue goes exclusively into the dedicated cannabis account for state programs, per existing law.
Pro/Con Analysis
Stronger case for benefits
Potential Benefits (5)
The tiered tax reduces effective rates for larger-volume purchases (e.g., $1.50/g for 28g+ flower vs. $2.50/g for <7g), lowering prices for regular consumers and potentially reducing incentives to buy from the illegal market—especially beneficial for low- and middle-income users who are price-sensitive.
FinancialPeopleRef: Sec. 3(1)(a)(i)(D), Sec. 3(1)(a)(ii)(C), Sec. 3(1)(a)(iii)Extension of the medical cannabis tax exemption through June 30, 2029 ensures continued affordability for qualifying patients—many of whom are seniors, disabled, or chronically ill—reducing out-of-pocket health costs and improving access to medically necessary cannabis.
HealthcarePeopleRef: Sec. 3(2)(a)Mandating separate itemization of the excise tax on receipts and inclusion in shelf pricing improves price transparency, helping consumers compare legal vs. illegal market costs and make informed purchasing decisions—especially valuable for budget-conscious households.
consumer protectionPeopleRef: Sec. 3(1)(c), Sec. 3(1)(b)The biennial comparative reporting on legal vs. illegal market activity (including Oregon sales data) provides the legislature with better evidence to calibrate enforcement and tax policy, potentially reducing illicit market activity over time and improving public safety outcomes.
Public SafetyLean peopleRef: Sec. 3(6)(vi), Sec. 3(6)(vii)Dedicated reporting of exempt sales amounts (via board-to-department data sharing) improves accountability and helps local governments assess the fiscal impact of medical exemptions on their tax base, supporting more accurate budget planning.
Local GovernmentPeopleRef: Sec. 3(6)(vii), Sec. 3(2)(c)
Potential Concerns (5)
The tiered tax structure introduces complexity in tax calculation and compliance, especially for small retailers who must track weight and THC content per SKU; this increases administrative burden and may disproportionately impact small operators with limited accounting resources.
Business & EmploymentRef: Sec. 3(1)(a)(ii)(C), Sec. 3(1)(a)(iii)Concentrates, edibles, and topicals are taxed per mg of THC, which may disincentivize innovation in lower-THC or broad-spectrum products—products often developed by smaller processors seeking differentiated offerings—potentially consolidating market share among larger producers with R&D capacity.
Business & EmploymentRef: Sec. 3(1)(a)(iii), Sec. 3(1)(a)(iv), Sec. 3(1)(a)(v)Mandated separate tracking and reporting of medical exempt sales increases compliance costs for retailers, especially those serving both medical and recreational customers; this may strain small retailers with limited staff or outdated POS systems.
Business & EmploymentRef: Sec. 3(6)(vii), Sec. 3(2)(b)While the bill aims to improve transparency, the biennial reporting requirement (ending Jan 1, 2025) may delay timely policy adjustments to address illegal market activity or consumer safety concerns, especially if data gaps persist.
Public SafetyRef: Sec. 3(6)(vii), Sec. 3(2)(b)Local governments may face challenges in interpreting or enforcing the new tax structure without clear guidance on product categorization (e.g., what qualifies as “trim” vs. “flower”), potentially leading to inconsistent enforcement or revenue leakage.
Local GovernmentRef: Sec. 3(6)(vii), Sec. 3(2)(b)
Who Is Most Affected
Low- and middle-income cannabis consumers benefit from lower effective tax rates on larger-volume purchases and continued tax-free access to medical cannabis; this improves affordability and reduces incentives to seek illegal alternatives.
Medical patients with qualifying conditions retain tax-free access to cannabis through 2029, reducing out-of-pocket health costs and improving therapeutic access—especially important for seniors and disabled individuals on fixed incomes.
Small retailers face increased compliance costs due to per-unit tracking, separate medical/exempt reporting, and complex tax calculations; while larger chains may absorb these costs, small mom-and-pop shops may struggle with staffing and POS upgrades.
Large processors and retailers benefit from the tiered structure’s volume discounts and may gain competitive advantage through economies of scale; the per-THC tax on edibles/concentrates may favor established brands with R&D capacity to reformulate.
The state retains all revenue in the dedicated cannabis account, but the shift to volume/THC-based pricing may reduce total tax receipts if consumers shift to lower-THC or bulk products—potentially limiting future funding for state programs unless offsets are enacted.