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Published on Friday, March 20, 2015

Marijuana revenue sharing bill scheduled for hearing

The House Appropriations Committee will hear SHB 2136 on Monday, March 23, at 3:30 pm.

HB 2136 contains numerous policy changes as well as provisions for revenue sharing with cities and counties. 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.
  • 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 ($6 million per year) 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, regulating medical marijuana, 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. Cities’ message to members of the House Appropriations Committee should be:

  • Revenue sharing needs to be sufficient to help cities address local impacts and the amount of revenue sharing in this bill is too low. The amount of revenue shared should be larger, and the cap of $20 million per year should be removed to allow cities to benefit with revenue growth along with the state.
  • Revenue sharing needs to benefit all cities that allow licensed marijuana businesses. The current limitation on revenue sharing only for jurisdictions with retail sales should be replaced with the distribution method agreed to by cities and counties.
  • The sunset provision that ends revenue sharing in 2022 needs to be removed.

Please contact members of the House Appropriations Committee and your local legislators to share this message with them.

Categories: Marijuana