Bill to Transform Marijuana Regulation from State Sen. Kohl-Welles

Washington State’s marijuana reform hasn’t been ideal. The industry got off to a slow start and when compared to Colorado’s vertically integrated structure that blends the medical and recreational industries together, you can see the flaws in Washington’s regulatory process for cannabis. This prompted State Senator Jeanne Kohl-Welles to propose a new bill that would regulate both industries under a single system. This is similar to what’s found in Colorado and it’s something that many say is a must to kick start Washington’s marijuana market.

Under the new bill, adults would be allowed to grow as many as six marijuana plants and taxation would be significantly reduced to help encourage the industry in a positive way.

Welles says that she will pre-file the bill ahead of the legislative period that occurs in January.

“We have a regulated recreational system, but not for medical marijuana. We’ve got to take a new look at this.” said Welles.

The bill would essentially bring medical marijuana into the regulatory system that the state already has in place. Dispensaries, known as collective gardens in Washington, would be expected to phase themselves out by 2016. However, any growers that have been successfully growing and distributing their product under the medical marijuana system can apply to grow under the new system, much like what was done in Colorado. This helped the state get the recreational industry off the ground at rapid pace and it could provide the much needed kick start that Washington is looking for. Additionally, the bill would allow dispensary owners to apply to own a recreational store, something that is currently difficult with the state’s limit on recreational stores.

The bill proposes a solution that would also significantly reduce taxation on marijuana. The current system imposes an excise tax at every stage of the supply chain, including producer, processor and retail. The new bill would consolidate these taxes and only tax at one stage, paid by consumers at the point of sale in retail stores. It’s a much simpler, more reformed approach.

Welles also commented that the tax would go through renaming, allowing businesses to deduct expenses from federal taxes. At the moment, cannabis businesses must pay federal income tax on their gross sales and this is before state taxes are paid.

Part of the bill would include a tax break for high CBD products, which are common in the medical marijuana industry. CBD is one of the primary cannabinoids in marijuana and is often infused in oils and other marijuana products. The tax break would help reduce the need for authorizations.

The bill would even reduce the 1,000 foot rule that makes it illegal for marijuana related businesses to be within 1,000 feet from any schools, parks or places where children frequently access. Instead, a 500 foot rule would be enforced, which would make it significantly easier for businesses to find a location to operate from. The bill would additionally make it possible for local governments (cities) to revert back to the 1,000 foot policy if they wanted.

Third parties would also be able to make pot deliveries from the grower to the retailer, making it possible for recreational marijuana stores to maintain their stock much easier. A cannabis board would be established to provide research licenses for studying marijuana and its effects. Furthermore, the bill would give local governments a reason to approve cannabis businesses, by sharing the tax revenue specifically within the areas that participate in the marijuana industry.

Welles believes the bill should be appealing because it’s not trying to dictate where marijuana revenue should go and it only streamlines current processes and improves them.

“The bills we had last year were much more complex than this. This is pretty straightforward. I’m just trying to come up with good, strong rational policy,” she said.

Those in the medical marijuana industry said that they would need to take a better look at the bill before deciding on whether or not it’s good for them, but they saw aspects that they liked.

The executive director of Hempfest stated: “From what I’ve seen so far, yes, I believe I would support it. This potential legislation is the best approach I’ve seen come out of Olympia so far at harmonizing the disparities between our medical and recreational cannabis industries in Washington state. Senator Kohl-Welles has taken time to hear the patient community.” -Vivian McPeak

Philip Dawdy, an industry lobbyist said that the legalization of home growing is a promising aspect to the bill, but he’d need to see the bill in full before deciding. Dawdy commented that Welles has been a strong advocate of the medical marijuana industry, but her bill won’t be the only one coming up this session and there will likely be others with promising aspects as well.

“You’ve got to measure all of this against a new reality in Olympia. The Republicans are in charge in the Senate and (Sen.) Ann Rivers is their go-to on this issue and she’s working on legislation herself.”

Ann Rivers was asked about the bill on Friday, but wasn’t ready to comment on it.

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