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Mon., Feb. 18, 2013, 5:31 p.m.

Tax hike for medical marijuana blasted

OLYMPIA – Washington will soon have two very different systems for legal marijuana, but a plan to tax medical patients similar to recreational pot users is unfair and unworkable, a legislative committee was told Monday.

The proposal to place higher taxes on medical marijuana did what a long-time cannabis advocate said once was unthinkable. It is turning a normally dysfunctional family of regular marijuana users into “normal citizens, complaining about taxation,” Jeff Gilmore told the House Finance Committee . . .

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. . . Washington has two different voter-approved laws that legalize marijuana – for medical patients with a doctor’s recommendation, approved in 1998, and for recreational use by adult, approved last fall by Initiative 502. Medical marijuana has no state-regulated system for growing and selling the drug to people who receive a doctor’s recommendation to take it for certain conditions. I-502 calls for the state to set up a system of regulating and taxing the production and sale of recreational marijuana.

House Bill 1789 was introduced earlier this month as a way standardize tax rates on all marijuana sold legally in the state. It would assess a business and occupation tax to medical marijuana dispensaries, require them to charge the standard state and local sales tax and a 25 percent excise tax, the same as state-approved stores for recreational marijuana will charge when they are set up later this year.

If taxes aren’t applied evenly, “we will create a black market,” Rep. Ross Hunter, D-Medina, the chairman of the House Appropriations Committee, warned when the bill was introduced.

The Office of Financial Management estimates those taxes would raise $3.5 million next year, and a bit more each successive year, for a total of $47.5 million over 10 years. Most of that would come from the excise tax.

Ezra Eickmeyer, political director of the Washington Cannabis Association, argued Monday the price at many dispensaries is currently below the illegal street price. The taxes proposed by Hunter and Rep. Reuven Carlyle, chairman of the House Finance Committee, would raise the price of medical marijuana at dispensaries and drive those patients back to the black market.

Washington shouldn’t even charge sales tax on medical marijuana, because it doesn’t charge sales tax on prescription drugs, Dale Rogers, of Compassion in Action, said. While patients don’t have a prescription, they do need a doctor’s recommendation, so marijuana isn’t like over-the-counter drugs like aspirin, he argued.

The bill says the taxes are being levied on dispensaries for the privilege of doing business in the state. That angered Stephanie Viskovich of the coalition, who said the patients will be paying those taxes.

“It is not a privilege to have HIV. It is not a privilege to have cancer,” Viskovich said. “You can do this, but is it something that you should do?”

Jeff Gilmore, who described himself as a longtime marijuana activist, said opposition to the proposed tax hike was uniting different factions and was premature. The state Liquor Control Board is developing rules for growing and selling recreational marijuana that won’t be in place until December. No one knows yet what, if any, loopholes over sales from the different systems will arise.

“That’s an issue for next year,” Gilmore said. “Give the Liquor Control Board a chance.”

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Jim Camden
Jim Camden joined The Spokesman-Review in 1981. He is currently the political reporter and state government reporter in the newspaper's Olympia bureau office.

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