A Washington bill that would give counties and cities the ability to ask voters to approve a small local excise tax on retail cannabis sales received a public hearing today in the Senate Ways and Means Committee.
Senate Bill 5650 was filed in February 2025 by Senators Keith Wagoner (R), Leonard Christian (R), and Jeff Holy (R). The measure would authorize local governments to place a ballot measure before voters asking whether to allow an excise tax of up to 2% on the retail sale of cannabis concentrates, usable cannabis, and cannabis-infused products.
Under the bill, the tax could only be imposed if a majority of voters approve it during a special or general election, and it could be authorized for up to seven consecutive years at a time. Counties would have the first opportunity to pursue the tax. However, if a county does not impose the tax before July 1, 2027, a city within that county would then be allowed to seek voter approval for the same tax.
The proposal makes clear that a county and a city within that county could not impose the tax at the same time.
If approved by voters, the tax would be collected by the Washington State Liquor and Cannabis Board, which would be allowed to retain up to 1% of collections to cover administrative costs. The state treasurer would then distribute the revenue monthly.
The distribution structure is designed to ensure the revenue largely returns to the communities where cannabis retailers operate. If imposed by a county, 15% of the funds would go to the county itself, while the remainder would be distributed proportionally to the county and the cities within it based on where cannabis sales actually occur. If imposed by a city, 15% would go to the county, with the rest going to the city.
The bill would also allow counties and cities to reauthorize the tax for additional seven-year periods, again only with voter approval.
Supporters speaking at today’s hearing emphasized that the bill does not automatically create a new tax, but instead gives local voters the authority to approve a local tax that could be used to benefit their community. Representatives from several cities spoke in favor of the bill, saying it would allow them to keep more of the revenue garnered from cannabis sold within their jurisdiction.
The majority of speakers opposed the bill, arguing that it would add an additional financial burden on licensed cannabis stores, many of which are already struggling. Some speakers pointed out how Washington State already has the highest cannabis excise tax in the nation at 37%.
Now that a public hearing has taken place, the committee will now decide whether or not to schedule the proposal for an executive session vote.
