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Published on Monday, March 2, 2015

Two important marijuana bills up for hearing this week

The proposal to reconcile the medical and recreational marijuana markets, SSB 5052, passed the Senate and now is scheduled for a hearing in the House Health Care & Wellness Committee on March 5 at 8 am. AWC has supported this proposal as an important tool for bringing needed regulation into the medical marijuana market.

Also scheduled for hearing is HB 2136. This proposal by the Chair of the House Finance Committee, Rep. Reuven Carlyle (D-Seattle), was introduced last week as a title only bill. The proposed substitute language has now been made available. The bill includes numerous policy revisions as well as revenue sharing provisions.

The proposed language includes:

  • A sales tax exemption for qualifying medical marijuana patients. (This is an exemption for the state and local sales tax but does not include an exemption from the marijuana excise tax.)
  • A restructuring of the marijuana excise tax that collapses the tax into one 30% tax collected at the final retail sale of marijuana products.
  • Allowing for local flexibility to reduce the current 1,000 foot buffer. Cities could adopt a buffer of between 1,000 and 100 feet from certain uses. The 1,000 foot buffer is still required for schools and playgrounds.
  • Allowing the Liquor Control Board to contract with local law enforcement for activities to eradicate illegal marijuana production.
  • Providing revenue sharing with cities and counties. The revenue sharing is set up as follows:
    • Once the state’s General Fund has received $25 million in marijuana excise tax revenue, then 30% up to a maximum of $20 million per year will be distributed to cities and counties.
    • Counties will receive 60% and cities 40%. Distributions will be based on the taxable sales of the jurisdiction. Only jurisdictions that have retail sales will receive funding.
    • Revenue sharing will sunset in 2022.
    • At least $12 million is to be provided for distribution to cities and counties in the budget that is adopted for 2015-2017. If those funds are not appropriated in the budget, then the whole bill is null and void.

Additionally the bill requires that SSB 5052 be enacted for this bill to take effect.

While we are very pleased that revenue sharing is a component of the bill, we are concerned at the mechanisms tied to it. Particularly concerning are the provisions that limit revenue sharing to only jurisdictions with retail sales. This means that cities with only producers and processors will not see any funding. It also means cities who have no marijuana businesses, even if they have no ban, will not receive any funding. Also troubling is the sunset provision that ends revenue sharing in 2022.

HB 2136 will be heard in the House Finance Committee March 4 at 6 pm. AWC will be testifying to express our appreciation for the progress the bill represents, as well as express our concerns over the limitations in the revenue sharing proposal.

Categories: Marijuana