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Published: Sunday, February 24, 2013, 12:01 a.m.

Proposed tax on medical pot called unfair to patients

Shops say they aren't treated the same as other businesses, and they worry about the cost for customers.

SNOHOMISH -- Steve Schechter, an owner of a Snohomish-area medical marijuana shop, wonders if revenue from a proposed 25 percent tax on sales of medical marijuana would just end up in a government black hole.
Schechter said that if state lawmakers approve the tax now under consideration, he hopes the money would be used for research on marijuana instead of just getting lost in state budgets.
"I remember the state lottery and they said no more school levies," he said.
Schechter said he also worries that if the medical marijuana tax is approved, it would increase the price beyond what some people coming to his Highway 9 Wellness Center could pay.
"We have so many patients on chemotherapy, MS patients, and eating disorders," he said.
The cost of medical marijuana at his shop is about $280 an ounce, Schechter said. The tax would increase the price to about $350 an ounce.
"The problem is when you tax it, you hurt the people who don't have any money," he said.
The move to tax medical marijuana followed approval of Initiative 502 in November. The initiative will allow anyone 21 or older to legally buy and possess up to an ounce of marijuana for recreational use.
Legal purchase is expected to occur next year, once the three-tiered, state-licensed system for growing, distributing and selling marijuana is established.
Marijuana would be taxed 25 percent at each of those three steps as it is moved from harvested crop to store shelves. Local and state sales taxes also would be charged.
Without the proposed state sales tax on medical marijuana, those shops likely would be selling their products far cheaper than the price at recreational marijuana stores.
No one knows what the exact price will be at the state-licensed stores, but it's been estimated to range from $336 to $400 an ounce.
Ezra Eickmeyer, a lobbyist for the Washington Cannabis Association, said there have been questions about how broadly the proposed state tax would apply to medical marijuana businesses. The legislation calls for the tax on medical marijuana dispensaries, but some shops call themselves co-ops.
Eickmeyer said he feels medical marijuana needs to be licensed by the state as a first step before taxation. Now such businesses "aren't being treated as a business in the state," he said.
Jeremy Kelsey, owner of the Medical Marijuana Patients Network in Mukilteo, said he could back the proposed tax on medical marijuana, but businesses like his "don't have equal rights."
Many banks don't allow such businesses, including his, to have bank accounts, he said.
"We deal strictly in cash, payday loan stores and prepaid credit cards," Kelsey said. "It's inconvenient, but that's how we have to do it."
There was some initial confusion following approval of I-502 that adults would be able to buy recreational marijuana at medical marijuana stores, Kelsey said.
But recreational consumers seem to have gotten the message that they'll have to wait until state-licensed stores open next year to legally purchase either the dried leaves of the plant or products such as baked goods infused with marijuana, he said.
Kelsey said he plans to expand his shop in the spring, offering classes to patients on how to grow marijuana and how to use it in cooking.
He said he wants his shop to continue to exclusively serve medical marijuana patients, even when recreational marijuana shops open next year.
"We've looked at all the options," he said. "Medical cannabis … that's what we're interested in."
Sharon Salyer: 425-339-3486 or salyer@heraldnet.com.
Story tags » LawsHealth treatmentTaxesMarijuana

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