Seattle marijuana

Everything cannabis, pot, or weed in Seattle.

Reality Tax: Recreational Marijuana Stores Gouged

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The high retail tax imposed on marijuana in the recreational industry is nothing new. Residents, customers, and tourists have conveyed their frustration with the high prices of cannabis. But what is often overlooked is the entire taxation burden which is imposed on recreational marijuana stores.

We interviewed the owner of Cannabis City, James Lathrop recently, and published the exchange a couple weeks ago. When asked ‘What is the most challenging part of running Cannabis City?’ Lathrop replied with, “paying the HEAVY taxes imposed by I-502 and Federal Code 280e. These two laws put the taxation of the product at a compound rate of 85% (25% + 25% + 25% + 10%) at the state level, PLUS an additional 35% at the Federal level.”

When looking at the numbers published by the Washington State Liquor Control Board for the month of October 2014, it shows Cannabis Citys’ total sales at $632,878. The WSLCB also publishes the retail tax amount owed which, for this month was $158,220. It’s easy to look at these numbers and think, ‘not bad at all.’ But, the amount published by the WSLCB is only 25% of the equation. It’s just one side of the story. According to Lathrop, the total compounded tax rate imposed on recreational marijuana shops is at 85%!

If this is the case, Cannabis City’s total tax burden for the month of October is roughly $537,946. Which leaves less than $100,000, for the month, to pay producers for the product, pay for overhead, pay for the lease of the store, hire security, pay employees a decent wage, and maybe pay yourself?

Wow.

 

 

$10,366,798 in Marijuana Sales and $2,591,699 in Excise Taxes Due

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The recreational retail marijuana industry has barely begun to bloom and, according to the Washington State Liquor Control Board, we have already had over 10 million dollars in sales and over 2.5 million in excise tax due. Put this into perspective: we still have yet to see the 2nd Seattle marijuana retail pot shop and hundreds of stores across the state have yet to receive their licenses, and we have these kind of numbers! Imagine the sales and taxes earned once this industry is in full force…

So, the taxes, once they are collected, how are they allotted? According to New Approach Washington and the I-502 initiative, 40% of revenues will go to the state general fund and local budgets, and the remainder will go to dedicated to substance-abuse prevention, research, education and health care. Which would mean, so far, over a million dollars would go towards state general funds and local budgets and about 1.5 million dollars going towards the latter.

What specific item or budget would you like to see the tax money issued to first?