This year, the Medical cannabis industry in Washington state is getting a long-deserved boost, thanks to the passing of new excise tax exemptions. In this article and guide, we introduce HB 1453 and DOH Compliance: what it is, why it matters, and how it impacts businesses across the industry.
Introducing Washington's New Medical Tax Exemptions
House Bill 1453, “HB 1453,” is a recently passed Tax Exemption bill in Washington that allows Medical cannabis patients to save money when purchasing qualifying products from Medically endorsed Dispensaries.
This change is exciting for a number of reasons, and at Cultivera we believe it could be a fantastic step forward that will greatly benefit the industry as a whole, finally offering real incentives and value to Medical shoppers across the state.
The additional testing requirements combined with the tax exemption will help patients save money on products that promote their wellbeing while offering better peace-of-mind as to the safety of those products.
For Retailers, this means medical patients can get more products for their money, with higher health standards, than they could before. This combination could make compliant products very popular once shoppers notice the difference.
In our latest guide, we introduce the new Medical Excise Tax Exemption bill, HB1453, and why it matters to cannabis business operators, and consumers, across the state.
Read on to learn a bit more about what it is, how it works, and how it may effect Washington’s supply chain, and click here to sign up for Cultivera’s Guide To HB1453 & DOH Compliance.
What is HB 1453 And DOH Medical Compliance?
Effective in June, 2024, HB 1453 allows exemptions to Washington’s cannabis excise tax for registered patients purchasing compliant products from medically endorsed retailers.
Previously, a 37% excise tax was collected from all consumers for all cannabis purchased at licensed retailers, both Medical and Adult-Use.
With the passing of HB 1453, licensed Medical Retailers can now sell compliant products to qualifying patients without having to apply this additional 37% excise tax!
Ultimately, this means registered medical shoppers can look forward to saving that 37% excise tax when purchasing compliant products from Medical Dispensaries!
How Does DOH Compliance Work?
To qualify for this exemption, the following three requirements must be met:
- Purchase must take place at a medically endorsed dispensary;
- Patient, or Designated Providers, must be registered with the state medical program; and
- Products must be DOH-compliant, and properly labeled as such, per the new rules.
The bill also breaks down the three types of compliant products: “General Use,” “High THC,” and “High CBD.”
You can learn about the difference in the state’s documentation, and in Cultivera’s full HB 1453 Guide, available below.
While DOH compliant products are Medical products, it is important to note that not every Medical product is DOH compliant. Products qualify for approval based on quality assurance, safe handling, and testing results. Learn more about product qualifications here.
Industry Effects Of HB 1453
How does this affect Washington's legal cannabis industry?
The most immediate effect of this bill will likely be consumers and retailers seeking out DOH-compliant products to take advantage of the potential tax savings.
For this reason, licensed growers and sellers should submit products that may qualify for medical compliance to the Washington DOH, and ensure approved products are properly labeled.
On the retail side, Medical Dispensaries will need to adopt new procedures for offering, applying, and tracking compliant tax exemptions.
How does this affect individual businesses?
The effects of HB 1453 will likely be felt across Washington’s legal cannabis supply chain.
With so many parts involved, and such high savings potential, it’s likely everyone will start to take notice, from growers and processors to lab technicians and production teams, retailers and consumers to tax consultants. Click here to see the notification and guidance from the WSLCB.
Below we explore the primary ways both sellers and retailers will be immediately affected. For more details on these effects and more, sign up for the full guide below.
Producers & Processors
Licensed Washington cannabis Producers and Processors will want to submit (or re-submit) any products that may qualify for compliance for additional testing.
Then, licensed sellers should make sure any Medical products in their menu that are DOH-compliant are properly labeled as such, both physically and within their digital systems.
With Cultivera Pro, licensed sellers can mark DOH-compliant products with a simple checkbox option to indicate they qualify for the excise tax exemption. When orders are exported and shared as JSON links, this designation remains, so retailers can easily see which products they’ve ordered are identified as compliant. Book a free demo to see how it works.
Retailers & Dispensaries
Medically endorsed retailers in Washington will be responsible for entering new medically recognized patients into the DOH registry, and maintaining all records showing instances of the 37% excise tax exemption being applied to qualifying purchases.
Since it is required to collect specific data points for each purchase with a relevant excise tax exemption, each Medical Dispensary will need to quickly build and enact new standard operating procedures to identify, manage, and track compliant products and applied exemptions.
The Cultivera POS team has already implemented new updates to make these workflows simple.
Retailers using our point-of-sale solution can look forward to streamlined designation options, automated tax applications, exemptions, and tracking, plus full analytics and more, to make selling DOH compliant products seamless. Reserve a demo space to see how it works for yourself.
In the new Cannabis Business Guide To HB 1453 & DOH Compliance, we break down these effects even more to help teams across the supply chain navigate the new rules.
We also provide additional details and information about how to recognize compliant products and patients, and the most important things for teams at every level to remember.
Learn More In Cultivera's Guide To HB 1453 & DOH Compliance
Get The Free Guide
For a deeper look at this new change in Washington’s legal cannabis industry, sign up for the free downloadable Guide.
Sections include thorough breakdowns of HB 1453 and how it works, how it benefits license operators at all levels, the three types of DOH-Compliant products, resource links, a full list of frequently asked questions, and more.
