WHITNEY ECONOMICS ISSUES CANNABIS TAX POLICY ANALYSIS FOR STATE OF WASHINGTON

FOR IMMEDIATE RELEASE  

WHITNEY ECONOMICS ISSUES CANNABIS TAX POLICY ANALYSIS FOR STATE OF WASHINGTON  

Proposed Legislation Would Raise Tax Rates but Lower Tax Revenues by $9.5 million  

PORTLAND, OR – Feb 24, 2026 – Whitney Economics (WE), a global leader in cannabis and hemp business consulting, data, and economic research, today announced it has issued an analysis of a proposed bill in the Washington Legislature that would raise the excise tax rate for cannabis but also reduce tax revenues by $9.5 million.  

Analysis of the bill showed that the goal of the Legislature to raise up to $20 million per year would not be met. In fact, Washington's revenue projections would decline nearly 10% from the previous quarter.   

Download the entire analysis here.

“Washington has some of the highest cannabis tax rates in the country, and this would raise the state excise tax from 37% to 39.3% and reduce legal demand by approximately 5.7%,” Chief Economist Beau Whitney said. “Washington’s legal participation is one of the lowest in the country for mature cannabis states, so a further decline would hurt statewide operators already struggling with profitability.”  

Cannabis tax revenues have declined steadily since the Covid era and continue to decline due to price compression caused by a massive oversupply of cannabis in the state as well as an accelerating migration from adult-use consumers to tax free medical ones, Whitney’s findings state.  

“The combination of the price compression along with increased medical purchases has hit Washington tax revenues particularly hard,” Whitney said. “Solving a supply issue by changing tax policy does not appear, from our numbers, to be a viable solution and requires further efforts by the Washington Liquor and Cannabis Board and the Legislature to fully address.”  

Consumers, particularly those at the lower income level, will be disproportionately impacted and, to a certain extent, may leave the regulated market entirely as a result, the analysis states. With a diminished level of legal participation there will be a decrease in demand and a reduction of tax revenues associated with the retail sale of cannabis in Washington.  

Vicki Christophersen, Executive Director of the Washington CannaBusiness Association (WACA), a Washington-based cannabis trade association, agrees. “With operators struggling with profitability and consumers’ budgets stretched as well, a regressive tax measure is not a viable solution. It does more harm than good.”  

Whitney Economics has examined multiple cannabis markets regarding tax policy and license saturation perspectives and is helping some regulators strike a balance between operators’ supply and consumer demand to strike a balance. The Washington Analysis can be accessed here.  

More information about cannabis tax policy, supply and demand and the hemp and cannabis markets is available at www.whitneyeconomics.com/reports or by contacting Beau Whitney at 503-724-3084  

About Whitney Economics Portland, Oregon-based Whitney Economics is a global leader in cannabis and hemp business consulting, data, and economic research, supporting hemp and cannabis operators, investors and regulators.  Whitney Economics does not take a position on the legalization of cannabis, nor does it take positions on proposed legislation. Visit whitneyeconomics.com.    

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Media contact: John McIsaac • john@mcisaacpr.com • 503-481-9621 (West Coast)