As Cannabis industry grows further in Washington State a bill is being discussed in Olympia could prompt the industry to expand even more. A Tax Bill Could Expand The Cannabis IndustryProducers, processors and retail shop owners are keeping a close eye on HB 2136, which would amend some of the current regulations and change the tax structure. Some pot businesses state it is nearly impossible to generate any revenue under the current tax structure.
“We’ve learned a lot since I-502 passed,” stated Rep. Reuven Carlyle (D-Seattle). “This is an update, and a modernization of the current initiative.”
Currently, cannabis law applies a 25% excise tax on each level of the system: grower to a processor, processor to a retailer, and retailer to the customer.
For people who operate as a cultivator and a processor, a common business model they are hit with three taxes
HB 2136 would fold the tax problem, into one, 37 percent excise tax.
Heavy volume producers/processors, like OMG Sykes in Snohomish County, state developing a way for simpler tax structure will allow businesses to more easily to run, and make money”With where the prices are in the market, it’s very tough to compete,” stated John Knutsen, co-owner of OMG Sykes, one of the largest operations in the state.
Knutsen and his partners invested $1.2 million to start a business in December. They say they have not nearly made enough money to live, in part because of the enormous tax issue and what Knutsen calls a double tax.
“All we can do is work with state regulators as a team,” he stated. “As much as people look at them as adversaries, they’re our allies. They make the industry work and go round and round.”
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