Seattle Weed Revenue Projection for 2017

weed-dollar-Doug Shutter
Photo: Doug Shutter/ shutterstock

Seattle, Washington is the current home of the nation’s largest operational recreational market, generating over $1 billion in sales annually. With California, Massachusetts, Maine, Nevada, and Vermont poised to swell legal sales in the next few years, many people are wondering how much this will affect sales volume and revenue projections for weed revenue in Seattle or other, larger legal marijuana markets (such as Denver or Portland).

Where the Taxes Go

Washington state taxes marijuana at a rate of 37%. The taxes generated from marijuana sales go to a great number of things. Before we dive into how much weed revenue Seattle is projected to get this year, it is important to understand where the revenues are spent. In 2017, this would include:

  • $125,000 annually to the department of social and health services for the design and administration of the Washington state healthy youth survey – a survey conducted every two years regarding drug use and youth behavior – following up by analyzing the data and produce reports.
  • $50,000 annually to the department of social and health services to assess the public cost and benefit of recreational marijuana. This would include health, crime, economic, youth impacts, etc…
  • $5,000 annually to the University of Washington alcohol and drug abuse institute to aid in the creation, implementation, and persistent maintenance of web-based public education materials using accurate information about possible risks posed by marijuana use
  • No less than $1.25 million annually to the Washington Liquor and Cannabis Board

Seattle weed revenue projectionsAfter these requirements are met by tax collections, any tax revenue from weed from Seattle or elsewhere in Washington in excess is distributed in the following ways:

  • Up to 15% to the department of social and health services division of behavioral health and recovery to create, implement, and maintain programs which aim to reduce substance abuse and evaluate prevention and reduction practices for state residents.
  • Up to 15% to new programs or services through annual consultations with University of Washington’s social development research group and the University of Washington’s alcohol and drug abuse institute, which can be shown as proven and tested practices, emerging best practices, or promising practices.
  • $25,536,000 annually must be spent annually on the following:
    • Up to 10% to the department of health for the creation of a public health program, including a hotline, a grant program for local governments crafting their own public health strategies, and media-based education campaigns (such as radio, print, etc. . .) providing accurate information.
    • $9.75 million annually to programs specifically targeting youth populations
    • 50% of the remaining funds go to the state basic health plan trust account to be administered by the Washington basic health plan administrator
    • 5% for community health centers providing primary health, dental, migrant health, or maternity health services

As of 2017, any marijuana tax revenues collected in Washington in excess of these amounts will be distributed to the state’s general tax fund. In 2018, however, the excess revenues from weed in Washington will be distributed to the cities and counties across the state allowing marijuana sales, provided the total excess distribution amount does not exceed $15 million in 2018-19 and no more than $20 million any year thereafter.

Note: For a full explanation of WA marijuana tax distributions, see here.

Seattle Weed Revenue from 2015 to Present

Seattle and the greater King County have purchased a cumulative $310 million in retail sales since initiative 502 legalized recreational marijuana in 2012, increasing to $447 million if we factor in growers, processors, and producers. All told, the total haul of tax revenues from weed in the Seattle area has been projected at a value of $117 million since 2014.

Recreational sales started July 2014 for Washington residents. In King County, 2014 amassed only a total of $9 million in sales, collecting $3 million in taxes. In 2015, Seattle and the surrounding King County sold $117 million between retail, producer, and processor sales, generating $36 million in state tax revenues. In 2016, the Seattle-area’s weed revenue from sales would reach $267 million, generating $78 million in taxes in one year alone.

Over $30 million in monthly tax collections from the Seattle region has been collected between January and April 2017, implying somewhere north of $100 million in total sales before the summer hits. In 2016, sales greatly accelerated in summer, fall, and winter months, which is reflected in the 187% increase in total tax revenues collected across the state between 2015 and 2016.

In the Seattle area, weed revenues have grown at a rate of over 200% each year since 2014, yet steadying tax revenues are signaling sales are becoming less erratic. Presuming monthly sales remain at a volume where tax collections average $7.63 million, weed revenue projections in the Seattle area for 2017 can be estimated around $300 million in total sales and as much as $91 million in taxes collected.