Seattle led the nation when it voted overwhelmingly to legalize cannabis so that a taxed, regulated and quality-controlled marketplace could offer a new approach for a plant with a rich and diverse cultural history. However, bias against cannabis and a steep learning curve for policymakers still creates hurdles that put many out of business and prevent others from getting started. The legal industry has reached 10 years of legalization but remains uncertain in the development of new Seattle-specific rules.
Better collaboration is critical. Discussions regarding a new slew of cannabis regulations in Seattle began a few months ago, when a Seattle City Council committee took up ideas featuring a new tax on cannabis at the point of sale that would have raised taxes about 10% on legal products, among other hiring and personnel requirements. If adopted, this would set cannabis taxes in Seattle — already the highest in the nation — at almost 60%. Those proposals were unfettered with industry input but nudged forward by a single union. In recent weeks, these proposals have improved due to Mayor Bruce Harrell’s invitation for industry input. For now, a new tax is off the table, but we have no choice but to remain vigilant as new regulations, and the future potential for a new tax, only further reduces the legal industry’s ability to compete with the ongoing illicit marketplace.
The mayor’s approach and a related council amendment make progress toward new policy that balances community values and the realities of the industry. But the proposal under consideration still needs work as it seeks to establish a third-party to conduct trainings for workers in the regulated industry — a labor-led template used previously by the hotel industry. Rather than assume cannabis professionals — working in a federally illegal industry, among other complexities — can be “trained” by outsiders, the council would do better by applying the same level of diligence to actually understanding the sector as it does to advancing the interests of organized labor under cover of social equity.
In 2021, Seattle cannabis businesses contributed $8 million in tax revenue, and when calculating for direct and indirect impacts, $91.8 million in total state and local taxes. While reported cannabis revenue creates an impression of wealth, remember that cannabis does not benefit from standard business practices such as the ability to write off customary expenses. Moreover, cannabis is taxed at 47% in Seattle — the highest tax on legal cannabis in the country. Most cannabis businesses are modest in size and compete vigorously in an arena governed by multiple state agencies including the Liquor Cannabis Board and the Departments of Agriculture and Health alongside ongoing federal prohibition. Understanding the context in which the cannabis industry operates will support smarter policy at the local level and beyond.
Existing regulatory and legal complexity in cannabis means there currently cannot be a one-size-fits-all template in policy. The early version of the City Council’s offering was modeled on an ordinance passed for hotel workers, and the current proposal still treats cannabis employees like interchangeable widgets, not professionals with highly specific expertise.
In cannabis, one employee may be selling a medical product for which they have learned its terpene profile while another may rely on their chemistry degree to safely extract THC molecules for processing vape cartridges and yet another is a culinary institute graduate using experience in commercial kitchens to refine a new recipe for infused chocolates. The skill set of these professionals is distinct to them and to the needs of the business. Respect for employees is a shared value, and we urge policymakers to consider the spectrum of individuals with specific talents — in Seattle alone, more than 1,200 people — working in regulated cannabis.
After 10 years, pot shops may seem like mainstays, but turmoil in the cannabis industry is economic, competitive, scientific and societal. Good intentions do not always make for good policy. Another proposal would require buyers of an existing license to only hire from a list of legacy employees, further harming regulated businesses. Proposals also would allow any individual to trigger a formal investigation by city agencies without reimbursing a dime of legal fees incurred if the accusations are baseless.
There are myriad issues facing our neighborhoods that would benefit from the focus some of the City Council has turned to cannabis, an industry operating under a microscope and already regulated by multiple state agencies.
Mayor Harrell proved he is willing to collaborate, but City Hall shouldn’t rush forward with yet more rules in an already heavily scrutinized economic sector. We ask that all Seattle leaders learn more about the realities of this unique, if not still novel, legal industry before implementing yet more solutions in search of a problem.