Gov. Jay Inslee signed medical-marijuana regulations Friday, perhaps the most significant lawmaking in the Legislature’s 103 days of work.
But agreement on collection and spending of marijuana taxes eluded legislators at they moved toward adjournment, and will probably have to wait for the special session that begins next week.
A proposal under consideration would direct proceeds from pot taxes to an array of state programs and share a sliver with cities and counties that have licensed sellers. But local governments willing to forgo the money would be under no obligation to allow the businesses.
Backing the changes were groups representing state-licensed marijuana business owners, who would see their federal tax burden reduced under the plan, and medical-marijuana patients, who would get a tax break if they register with the state.
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“We have the framework for a really good agreement,” said Sen. Ann Rivers, R-La Center.
But Rep. Reuven Carlyle, D-Seattle, said the House “was firm on the need for a defense of the spirit of the initiative and to have a basic level of funding for drug abuse prevention.” Rivers said that dispute wasn’t insurmountable and hinged on making sure a state program didn’t get more money than it could spend.
What the Legislature did manage to get done: cracking down on unlicensed pot dispensaries by subjecting marijuana intended for medicinal use to licensing, testing, inspection and tax requirements.
Grow co-ops preserved
The Democratic governor vetoed a few parts of the bill but preserved most of it, including authority for groups of up to four patients to form pot-growing cooperatives. Law enforcement opposes the group home grows, which police fear will perpetuate a legal gray area that has been used to justify unlicensed medical-marijuana storefronts.
But Inslee said the cooperatives would ensure patients continue to have access to medicine even in a more restricted system and even in cities and counties that ban sales.
Under the new law, there will be tighter restrictions on medical authorizations and possession by patients. There will be new protections from arrest, too, but only for patients choosing to register in a state database.
That database could have additional benefits if the pot-taxation proposal under consideration in the Senate were to become law. Patients who register would be free from sales tax when shopping at specially licensed medical stores. They and buyers at all licensed shops would still pay a 37 percent excise tax, a simplified retail version of taxes that today are levied every time marijuana changes hands in a way that has left businesses on the hook for extra taxes under federal law.
The state expects to take in more than $1 billion from the excise tax over the next four years.
The proposal still under discussion would direct about 4 percent of those proceeds to local governments, which have been complaining about a lack of funding for regulation.
Only cities and counties allowing the businesses could fully share in the revenue, although counties that refuse could still get a partial share for containing a city that does have stores. Pierce County and Tacoma are in that situation.
City and county associations said the share was too small to have much effect on local decisions about whether to allow the industry.
Worries about ‘pot deserts’
To further limit bans, the House had proposed requiring those decisions to be made by voters. But the idea of restricting local bans was a “nonstarter” for Senate Republicans, Rivers said. She said local governments are best equipped to decide.
Rep. David Sawyer, D-Lakewood, said that would leave “deserts” lacking in legal access to marijuana for patients or other customers.
In a Senate concession, the plan would keep marijuana revenue partly earmarked for drug treatment, public health and other specific areas called out by marijuana-legalization Initiative 502. But decisions on the exact amounts for each program would have to wait for a budget deal.
The Senate’s proposed budget relies partly on directing marijuana money to education, but its lead author, Sen. Andy Hill, R-Redmond, said the marijuana proposal wouldn’t have a major effect on his budget plan if it passed.
A slew of other proposed changes have made their way into the measure lawmakers are negotiating. Among them, the newly renamed Liquor and Cannabis Board would be able to license marijuana clubs as well as transporters of pot shipments.
Cities and counties would be allowed to reduce to 100 feet a 1,000-foot buffer zone where marijuana businesses are now prohibited around parks, libraries, day cares and other child-friendly spots – but buffer zones around schools and playgrounds could not be reduced.