Marijuana taxes net $22.5 million in 6 months

  • By Amy Watkins For The Herald Business Journal
  • Thursday, January 29, 2015 3:31pm
  • Business

LAKE STEVENS — Reed Evans and his family members make frequent trips to the Washington State Liquor Control Board office in Olympia.

That’s because they, like others who have recreational marijuana businesses, owe a monthly excise tax of 25 percent on all marijuana sales. Evans and his family in October opened Cannablyss, the only retail marijuana shop in Lake Stevens.

“We drive on down with our 25 percent,” Evans said. “We’re smart about it. It was really confusing in the beginning but we have an awesome accountant and he just helps us along.”

The excise tax is applied to all taxable sales of marijuana, marijuana-infused products, marijuana concentrates and useable marijuana. At Cannablyss, that means a gram of marijuana sold for $20 nets a profit of less than $4 after accounting for purchase price, state taxes, and setting some aside to pay federal income tax, Evans said.

“Out of that we have to pay for rent, employees, PUD, cable, a little marketing and really any normal expense of a business,” he said. “If that means just breaking even for a while, it’s great with us but the taxes are expensive.”

The state’s Liquor and Control Board updates a list every Tuesday with figures showing the amount of excise tax on retail marijuana sales from the state’s 334 retail locations.

Totals posted from June 16 through Jan. 19 showed marijuana sales activity reaching approximately $75.7 million with the state collecting more than $18.9 million in excise tax.

Last year, budget forecasters predicted that the still young industry could generate as much as $143 million in the state’s next biennium, which runs through 2015-2017.

Payments are always due no later than the 20th day of every month for the previous month’s sales, said Brian Smith, communications director for the state’s Liquor Control Board.

“So far it’s been 100 percent compliance,” he said. “It’s been smooth. We’re finding that about roughly three quarters (of marijuana business owners) are paying with check. People are finding banks. It’s slowly opening up.”

The Washington State Department of Revenue also plays a role in collecting marijuana taxes.

The department collects business and occupation tax from marijuana producers, processors, and retailers, as well as retail sales tax on sales of marijuana and marijuana-infused products.

Figures released through Dec. 11 show the department has collected approximately $3.6 million in recreational marijuana taxes.

“We have done our own contact with businesses to walk them through tax forms and how to file electronically and pay electronically,” said Kim Schmanke, communications director for the state’s Department of Revenue. “To the best of my knowledge it’s run rather smoothly with businesses telling us they appreciate the customer service.”

Reed’s parents, Bob and Denise Evans, were the ones to get the license to open the shop at 2705 Hartford Drive NE. Although he’s looked, Reed said he hasn’t yet found a bank to do business with but that paying cash is working for now. They make sure to keep only a limited amount of cash on hand.

He and his family are also carefully saving money from gross sales to pay federal income tax when it’s due.

“We’re just starting to understand the business and it’s working for us,” Reed said. “We’ve really gotten in a routine.”

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

A closing sign hangs above the entrance of the Big Lots at Evergreen and Madison on Monday, July 22, 2024, in Everett, Washington. (Ryan Berry / The Herald)
Big Lots announces it will shutter Everett and Lynnwood stores

The Marysville store will remain open for now. The retailer reported declining sales in the first quarter of the year.

The Safeway store at 4128 Rucker Ave., on Wednesday, Nov. 29, 2023, in Everett, Washington. (Mike Henneke / The Herald)
Kroger and Albertsons plan to sell these 19 Snohomish County grocers

On Tuesday, the grocery chains released a list of stores included in a deal to avoid anti-competition concerns amid a planned merger.

Helion Energy CEO and co-founder David Kirtley talks to Governor Jay Inslee about Trenta, Helion's 6th fusion prototype, during a tour of their facility on Tuesday, July 9, 2024 in Everett, Washington. (Olivia Vanni / The Herald)
Inslee energized from visit to Everett fusion firms

Helion Energy and Zap Energy offered state officials a tour of their plants. Both are on a quest to generate carbon-free electricity from fusion.

Awards honor employers who promote workers with disabilities

Nominations are due July 31 for the awards from the Governor’s Committee on Disability Issues and Employment.

Bruce Hallenbeck, 4, picks out Honeycrisp apples for his family at Swans Trail Farms on Wednesday, Oct. 26, 2022 in Snohomish, Washington. The farm is now closed for the season. (Olivia Vanni / The Herald)
Study: Washington residents would pay more for homegrown goods

Local online shoppers are on the look out for the made in Washington label.

Aurora Echo, owner of Wildly Beloved Foods, begins making cavatelli pasta with one of her Bottene pasta machine on Thursday, June 27, 2024 in Clinton, Washington. (Olivia Vanni / The Herald)
Whidbey artisanal pasta maker shares her secrets

For Aurora Echo of Wildly Beloved Foods in Clinton, “sharing food is so ancient; it feels so good.”

Lynnwood
New Jersey auto group purchases Lynnwood Lexus dealership land

Holman, which owns Lexus of Seattle in Lynnwood, bought property on which the dealership resides.

Two couples walk along Hewitt Avenue around lunchtime on Wednesday, Oct. 19, 2022 in Lynnwood, Washington. (Olivia Vanni / The Herald)
Everett businesses say it’s time the city had its own Chamber of Commerce

The state’s seventh-largest city hasn’t had a chamber since 2011. After 13 years, businesses are rallying for its return.

Students Mary Chapman, left, and Nano Portugal, right, work together with a fusion splicer and other equipment during a fiber optic technician training demonstration at Sno-Isle TECH Skills Center on Tuesday, May 28, 2024, in Everett, Washington. (Ryan Berry / The Herald)
Sno-Isle students on the path to becoming fiber professionals

The state will roll out $1.2 billion to close gaps in internet access. But not enough professionals are working to build the infrastructure.

Washingtonians lost $250M to scammers in 2023

Identity theft, imposter scams and phony online ads were the most common schemes, a new study says.

LETI founder and president Rosario Reyes, left, and LETI director of operations Thomas Laing III, right, pose for a photo at the former Paroba College in Everett, Washington on Saturday, June 1, 2024. (Annie Barker / The Herald)
Woman brings Latino culture to business education in Snohomish County

Rosario Reyes spent the past 25 years helping other immigrants thrive. Now, she’s focused on sustaining her legacy.

Annie Crawley poses for a photo with her scuba gear at Brackett’s Landing near the Port of Edmonds on Saturday, Feb. 3, 2024 in Edmonds, Washington. (Annie Barker / The Herald)
Edmonds ocean activist to kids: Life is better under the sea

From clownfish to kelp, Annie Crawley has been teaching kids and adults about the ocean’s wonders for three decades.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.