After years of tight restrictions, the legislature is considering proposals to unlock more cannabis shared revenues for cities and towns.

For years after the legalization of cannabis in Washington, the state severely restricted the state shared revenues distributed to local governments. In 2022, a new formula was adopted by the state, changing the cap to a defined percentage of cannabis revenues. Now, SB 5547, sponsored by Sens. Keith Wagnor (R–Sedro-Woolley) and Leonard Christian (R-Spokane Valley), proposes annual increases in the percentages of cannabis revenues shared with local governments.

Under the bill, shared revenues would increase by 0.5% every state fiscal year from 2026 to 2030. From 2030 onwards, the revenue-sharing percentage would remain static.

As a reminder, there are two ways the state shares cannabis tax revenues with local governments:

1. Licensed retailer sales: A city or town with a licensed retailer physically located in their jurisdiction can receive a proportional amount of state cannabis tax revenues collected at that retailer. Under SB 5547, that amount would increase each state fiscal year by 0.5% from 1.5% currently to 3.5% in 2030.
2. Per capita distribution: A city or town that does not prohibit the siting of licensed cannabis producers, processors, or retailers can receive a per capita distribution of state cannabis funds based on a formula. The percentage of state cannabis tax revenues used to determine the distribution amount would increase each state fiscal year from 3.5% currently to 6% in 2030.

The state would cover the increased amount shared with local governments by reducing the amount of cannabis tax revenues allocated to the state general fund.

AWC is a strong proponent of the state increasing the amount of state revenues shared with local governments and appreciates the work of Sens. Wagnor and Christian to introduce this bill.

Dates to remember

SB 5547 is scheduled for a public hearing in the Senate Ways & Means Committee on Tuesday, February 4 at 4 pm.