Cannabis producers are licensed by the Washington State Liquor and Cannabis Board (LCB) to produce and sell cannabis at wholesale to other cannabis producers and cannabis processors.
Cannabis producers are also subject to Washington taxes administered by the Department of Revenue.
Gross income from the sale of cannabis to other cannabis producers and cannabis processors is subject to the B&O tax under the Wholesaling classification. Producers must keep a copy of a valid reseller permit for each producer or processor for 5 years after the date of sale.
Cannabis producers (growers) are not exempt from B&O tax as farmers because cannabis products are specifically excluded from the definition of an agricultural product under RCW 82.04.213.
Retail sales of cannabis seeds and plants
Cannabis producers are allowed to sell cannabis seeds and plants to cooperatives, medical cannabis patients with recognition cards, and cannabis research licensees.
Cannabis producers must collect and remit retail sales tax and pay retailing B&O tax on all such sales of cannabis seeds and plants. No tax exemptions apply.
Cannabis producers must pay retail sales tax or use tax on all machinery, equipment, and supplies used to produce cannabis because they are considered the consumer of these items. Examples of taxable items include:
Cannabis producers also owe sales or use tax on their purchases of seeds, seedlings, clones, fertilizer, sprays, pesticides, and other products used directly in the growing of cannabis because they are not considered farmers.
Retailers must collect and remit a 37% cannabis excise tax on each retail sale of useable cannabis, cannabis concentrates, and cannabis-infused products. The LCB is the only agency authorized to accept payments for the cannabis excise tax.
If you have questions regarding this tax, contact LCB’s Customer Service Team at firstname.lastname@example.org or 360-664-1789.