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Bill

SB 5404

Increasing cannabis revenue distributions to local governments.

2023-2024 Regular Session Introduced by Keith Wagoner and 1 co-sponsor

SB 5404 redirects a larger share of Washington's cannabis excise tax revenue from the state to local governments hosting cannabis businesses and regulatory costs.

Referred to Ways & Means.
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WeVote Research Nonpartisan
Bill Summary · SB 5404

Legislative bill overview

SB 5404 proposes to increase the share of cannabis tax revenue distributed to local governments in Washington State. The bill would alter the current revenue-sharing formula established under Washington's legal cannabis framework, directing a larger portion of excise tax proceeds to cities and counties that host cannabis retail operations or are affected by the industry.

Why is this important

Local governments argue that cannabis businesses generate significant regulatory costs (enforcement, licensing, public health monitoring) while the state retains most tax revenue. Increased local distributions could fund community programs, infrastructure, and enforcement—or conversely, it reduces state funding available for statewide priorities like education and health services. This reflects an ongoing tension over how sin-tax revenues should be allocated between state and local interests.

Potential points of contention

  • State vs. local revenue priorities: Increasing local shares reduces state general fund resources at a time when many states face budget pressures
  • Fairness across jurisdictions: Some communities host more cannabis businesses than others; distribution formulas determine which areas benefit most
  • Precedent for other industries: Decisions here may create expectations for similar revenue-sharing changes with alcohol, tobacco, or other regulated industries

Compiled from official sources — confirm details with the bill’s official record.

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