Wenatchee World Business World
Author: Lindsey Weidenbach

When the first recreational cannabis business operations began in early 2014, cannabis business owners were optimistic and enthusiastic about the industry.

These entrepreneurs have had to wade through the changing regulations and requirements of the Washington State Liquor and Cannabis Board (the “WSLCB”), as well as various state and federal agencies that are a normal part of doing business in Washington, making their business operations anything but normal.

Never has there been an industry where staying up-to-date on the frequent changes to the laws been more important to staying in business. This article provides details on how taxes, shared labor, changing laws and local moratoriums affect doing business in the cannabis industry.

State and federal tax issues abound in this industry. By simply doing business in Washington, all businesses are subject to Washington State Business & Occupation tax (“B&O” tax) on their gross receipts. This tax is calculated by the business owner and paid to the Washington State Department of Revenue. There are various exceptions to B&O tax, none of which apply to cannabis. For tax purposes, cannabis is not an agricultural product and thus cannot take advantage of any of the tax credits or deductions provided to other agricultural operations.

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