Tax Break for Medical Marijuana Patients Begins on Tax Day

This Tax Day, April 15, brings more than just the usual stress of filing taxes for medical marijuana users in Washington, DC. A new law passed by the Council of the District of Columbia is extending a tax break for those who purchase medical cannabis from dispensaries in the city.

The Medical Cannabis Patient Card Extension and 4/20 Medical Cannabis Sales Tax Holiday Week Emergency Amendment Act of 2024, passed on April 2, 2024, has brought welcome relief. The act extends the validity of patient and caregiver registration identification cards from two years to six.

Additionally, it extends the medical cannabis tax holiday, which began in 2023, by four more days. During this period, sales taxes are waived for medical cannabis purchases at registered dispensaries. This year, the tax exemption lasts for a full two weeks, through April 28.

Dispensary owners and cannabis professionals in the area are pleased with the news. Bethany Frick, CEO of District Cannabis, a cultivator opening a new store in Union Market on April 17, sees this tax-free holiday as a positive move.

“We believe cannabis should always be tax-free,” says Frick. “Many patients rely on cannabis for help with pain, anxiety, sleep, among other ailments. In other states, such as Maryland, medical patients do not pay a sales tax.”

According to the Marijuana Policy Project, states like Maryland, New Jersey, Delaware, Massachusetts, and Connecticut do not apply sales tax to medical cannabis sales. In comparison, DC’s 6 percent medical cannabis sales tax is lower than some other states. For instance, California imposes a 15 percent retail excise tax on medical cannabis sales.

Jared Powell, the chief of staff for the Alcoholic Beverage and Cannabis Administration, notes that sales at licensed DC retailers typically increase during April due to the tax holiday.

“The sales tax holiday attracts DC residents and non-residents alike to licensed retailers,” Powell explains. “Non-residents can purchase medical cannabis products by registering for a non-resident patient registration with a validity period of up to 365 days or through our state reciprocity program.”

Despite the tax break, the U.S. Cannabis Spot Index has seen an increase in prices from $1,005 a pound in April 7, 2023, to $1,020 a pound by April 5, 2024, showing that cannabis prices are not immune to inflation.

Adding to the excitement, some local dispensaries may also offer specials on April 20, an unofficial holiday for cannabis enthusiasts.

“4/20 is a great time to visit your local cannabis dispensary,” says Hannah Clarke, executive director of the I-71 Committee, a nonprofit focused on cannabis legislation. “Each dispensary has its own unique way of celebrating the holiday, and the tax break is a fantastic way for consumers to save at the register.”

Take Away

DC’s new cannabis rules are great for medical users and the local market. The extended tax break until April 28 helps patients save money, and longer ID card validity is convenient. Dispensary owners are happy about the positive market impact, and the 4/20 celebrations offer both savings and fun. Even though cannabis prices are up, DC’s 6% tax rate is lower than other places. These changes show a growing cannabis scene in DC, with benefits for everyone involved.