Rivers bill would tax medical pot

La Center Republican proposes new regulations for industry

By Stevie Mathieu, Columbian assistant metro editor

Published:

 
photoSen. Ann Rivers

State Sen. Ann Rivers acknowledges she's going boldly where no Washington state Republican has gone before: she's introduced a bill about medical marijuana that also raises taxes on some parts of the industry.

The La Center Republican's proposal would create new licenses for those who grow, process and dispense medical cannabis, and the state's Liquor Control Board would oversee those licenses, as well as increase regulations for medical pot.

Through the initiative process, voters gave medical marijuana users the green light in 1998. Complicating matters, voters last fall approved Initiative 502, which legalized recreational pot use for people 21 and older, and that initiative came with its own set of rules.

When it comes to recreational pot, I-502 imposes a 25 percent tax on sales in the industry. It also requires the state's Liquor Control Board to license recreational marijuana growers, producers and retailers.

By contrast, the current medical cannabis rules don't impose any taxes on the industry or require Liquor Control Board licenses. In local jurisdictions that allow it, medical marijuana groups can create community pot gardens with up to 45 plants and dispense medical cannabis to up to 10 patients. They must keep documents on their premises that prove their patients have a doctor's approval.

Differences between the two separate pot industries, especially when it comes to taxation, could create some problems, Rivers said.

"Let's say you're a marijuana user," she said. "Your choice is to buy marijuana that's being taxed at 25 percent or obtain a phony authorization and use it to obtain medical cannabis that carries no tax."

Proposed changes

Under medical cannabis laws, a person of any age -- even someone younger than 18 -- can get a doctor's authorization for medical cannabis without parental permission. That would change under Rivers' bill, which would require parental consent and two separate doctor visits before a minor could get medical cannabis authorization.

"I've been around teenagers enough to believe that marijuana use can certainly become a habit, and it's not a good habit to have," Rivers said. "I want the protections this bill offers to keep medical cannabis out of the hands of teenagers or anyone else who isn't authorized to have it."

Her proposal, Senate Bill 5887, also would create new taxes for medical pot that would be slightly lower than taxes on the recreational pot industry. Medical pot growers, processors and dispensaries could be subject to sales taxes ranging from 10 to 20 percent.

Additionally, the proposal would give medical cannabis growers, producers and dispensers protection against getting arrested. State law does not prevent those in the medical cannabis industry from being arrested, but it does allow them to use their doctor's medical marijuana authorization as a defense at trial.

Historically, Republicans have distanced themselves from getting involved in marijuana policy, but it's time to treat the topic like any other, Rivers said.

"I believe there are appropriate uses for medical cannabis, because two relatives of mine were able to obtain pain relief from it," Rivers said. "The state's oversight can make for a better product and thus more consumer confidence."

Her bill would allow the Liquor Control Board to regulate the medical cannabis community by requiring record-keeping, dispensary inspections, fines for rule breakers and labeling requirements. Those seeking a license to work in the medical cannabis industry would need to be at least 21 years old.

The licenses wouldn't be required until Sept. 1, 2014.

Local governments have responded differently to state laws about medical cannabis dispensaries and medical marijuana gardens. In Clark County, medical marijuana gardens are prohibited, but the city of Vancouver voted in December to allow them. The city of Camas has outlawed them.

Rivers' bill would clarify the state's 10-patient rule for community pot gardens, allowing medical marijuana gardens to serve 10 patients a day rather than 10 patients "at any time."

Muraco Kyashna-tocha of the Evergreen State Cannabis Trade Alliance said there are aspects of Rivers' bill that she could support, such as taxing medical marijuana. Kyashna-tocha runs a medical cannabis dispensary in Seattle called the Green Buddha Patient Co-op.

But Kyashna-tocha criticized Rivers' proposal as favoring the pot industry rather than the patients.

Rivers said she got the idea for the legislation from those in the industry, but the bill has evolved a lot since then. Rivers also said the bill she introduced is just a starting point, and she imagines it will change once the public and other stakeholders get a chance to weigh in.

The bill was introduced late last month in the Senate Ways and Means Committee, which plays a key role in the state budget-writing process. So far, the bill hasn't been scheduled for a public hearing.

"I don't know if it will get a vote this year or not," said Rivers, who serves on Ways and Means. "It's late in the session to introduce new legislation, which doesn't help, but we need to begin the discussion. Let's start with a public hearing."

The 2013 Washington Legislature is working to address a roughly $1.2 billion budget shortfall as it comes up with its new spending plan. The legislative session is set to conclude April 28.

No part of the medical cannabis industry in Washington state is taxed, although it is eligible for taxation. According to state law, cannabis is not exempt from taxes like prescription drugs are, Rivers points out.

Rivers said she's raised some eyebrows by introducing a bill that imposes new taxes, but in this case, the tax makes sense.

"I can take a tax vote," Rivers said. "Who's going to argue that the state shouldn't tax an industry that in so many words has indicated it wants to be taxed? … I'm not afraid to sponsor a bill just because others might think it's controversial."

Stevie Mathieu: 360-735-4523 or www.facebook.com/reportermathieu or www.twitter.com/col_politics or stevie.mathieu@columbian.com