State revenues from marijuana sales within this area will now be shared with Kitsap County and the City of Port Orchard.
The State Legislature passed House Bill 2136, which calls for the state to share the revenue it gained from the sale of recreational marijuana with government entities where the product was sold. Gov. Jay Inslee signed the bill June 30 and on July 1, it became effective.
The new state law increases taxes on the retail price of pot to 37 percent, which is collected by the state. That’s an increase from an excise tax of 25 percent at three different phases — production, processing and retail — prior to the new law’s implementation. Starting this month, 30 percent of the new tax amount will be distributed to counties, towns and cities where the licensed marijuana retailers operate.
The amount Port Orchard will receive as a result of the new state law will change between 2016-18, says city treasurer Allan Martin.“Under Initiative Measure 502, cities received no distribution of the state-dedicated marijuana fund,” Martin said. “During the state fiscal years 2016 and 2017, the state will distribute $6 million to cities and counties that have licensed marijuana stores in their jurisdiction.”
Martin said the more relevant revenue portion of the legislation happens in 2018. He said that’s when the tax distribution is based on excise tax collected from the three retail stores within Port Orchard limits.
“The amount distributed to Port Orchard will depend upon the volume of sales from retailers within the city,” he said.
That volume of sales — and tax revenues back to Port Orchard and Kitsap County — remains to be seen.
Whatever the amount, Port Orchard Mayor Tim Matthes feels it doesn’t send a positive message to young people.
“It a principled thing for me,” Matthes said. “I was originally was very encouraged when we had a moratorium in place prior to the City Council voting to allow marijuana sales within city limits,” he said. “I don’t think it sends a good message to young people — or to anyone else, for that matter. The best message would’ve been not to have legalized it in Port Orchard.”
HB 2136 also revises guidelines that cities and counties can use in regulating where retail businesses can locate. The previously established minimum distance between a retailer and school, park, childcare facility or transportation center was 1,000 feet. Cities and counties now can reduce the minimum distance allowed to as few as 100 feet.
Nick Bond, Port Orchard Development director, said he doesn’t believe the city has plans to revise its current regulations. “No changes are imminent, although the (city) attorney is reviewing our regulations to determine if any changes are required.”
Matthes also said he hasn’t heard of any movement to make changes to the city law.
In April 2014 Port Orchard’s City Council voted 6-1 to pass an ordinance amending the city development regulations concerning recreational marijuana use. State voters approved a measure in November 2012 to allow and regulate recreational marijuana by licensing and taxing producers, processors and retailers of cannabis.
Ten retail outlets sell marijuana products in Kitsap County. Bainbridge Island and Bremerton join Port Orchard as communities in the county that allow the sale of recreational marijuana. Others, including Poulsbo, has banned recreational and medical marijuana retail stores. One of the reasons, according to Poulsbo City Council member Ed Stern, is because the state didn’t share tax revenue with local and county districts.
“(That is) certainly why I encouraged the city, from my viewpoint, to take the position it did,” Stern told the North Kitsap Herald.Poulsbo Mayor Beck Erickson told the newspaper that she believed revenue sharing wouldn’t be beneficial to her city should it overturn its ban on retail retailers.
“Our 10,000 people — in the whole State of Washington revenue, you’re talking — it’s not going to be a lot of money.”Within Port Orchard’s boundaries are three retail marijuana businesses: Crockpot at 1703 SE Sedgwick Rd., Suite 113; 420 Spot Shop, 1374 SE Lund Ave.; and Greenway Marijuana, 4851 Geiger Rd.
Delynn Ecklund, owner of 420 Spot Shop in Port Orchard, said she’s glad that the city is getting a slice of the tax revenue pie. ”They deserve getting some of the money that we send over to the state,” Ecklund said. “But what I pay in taxes is ridiculous. I hand over 37 percent of my sales to the state liquor control board in addition to the 8.7 percent the state, county and city gets.”
Ecklund’s store has been operating since October 2014. She said revenue at her shop ”is getting better,” but the tax burden makes operating a healthy business a challenge.
