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New Marijuana Tax Structure In Washington Should Help Reduce Prices

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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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