Washington Legislature Weighs Heavy Kratom Taxes and Regulations, Signaling Major Industry Shift

Washington Legislature Weighs Heavy Kratom Taxes and Regulations, Signaling Major Industry Shift

Olympia, WA – The landscape for kratom merchants and consumers in Washington State is on the verge of a dramatic transformation, as the state Legislature actively considers a pair of bills that would introduce significant taxes and stringent regulations on kratom products. This legislative push, highlighted by a recent report from the Washington State Standard, could set a precedent for how other states approach the plant, with profound compliance implications for businesses nationwide.

What's Happening in Washington

Two key bills, Senate Bill 6196 (SB 6196) and Senate Bill 6287 (SB 6287), are currently making their way through the legislative process. SB 6196 proposes an astonishing 95% excise tax on kratom products, to be levied at the distributor level. This bill also mandates that both kratom distributors and retailers obtain licenses from the state Liquor and Cannabis Board and adhere to clear labeling requirements for products and ingredients. The revenue generated from this substantial tax would be allocated to programs aimed at preventing youth access to harmful substances.

Complementing this, SB 6287 seeks to prohibit the sale of kratom products to individuals under 21 years of age and establish comprehensive product labeling standards. Interestingly, the Spokane City Council has deferred its own proposed local ban on kratom, opting instead to monitor the state Legislature's progress. While the American Kratom Association (AKA) supports age restrictions and labeling, it has voiced strong opposition to the proposed 95% tax and certain punitive measures within SB 6196, including potential felony charges for minor compliance errors.

Why This Matters to Kratom Merchants and Consumers

The implications of these proposed changes are monumental. For kratom merchants, the 95% excise tax would lead to a near doubling of product prices, potentially making the market unsustainable and driving many businesses out of Washington State. The introduction of new licensing requirements, managed by the state's Liquor and Cannabis Board, represents a significant increase in operational complexity and cost. Furthermore, stringent labeling mandates and record-keeping requirements, including a five-year retention period, will demand extensive internal overhauls for businesses operating in the state.

Consumers, in turn, would face dramatically higher prices and restricted access due to the age-21 limit. While some regulations, like age verification and clear labeling, are often seen as positive steps towards consumer protection, the sheer magnitude of the proposed tax could effectively price many out of the market. This legislative direction in Washington could also inspire similar, heavily restrictive regulatory frameworks in other states, moving away from the more balanced Kratom Consumer Protection Act (KCPA) model favored by many in the industry.

Compliance Implications for High-Risk Merchants

For kratom businesses, particularly those operating in the high-risk payment processing sector, these developments underscore the urgent need for robust compliance strategies. The proposed regulations on labeling and ingredients directly amplify the existing necessity for thorough product testing.

High-risk merchants must proactively prioritize and invest in comprehensive third-party lab testing for all kratom products. This includes screening for heavy metals, contaminants, and ensuring accurate alkaloid content (mitragynine and 7-hydroxymitragynine) is clearly indicated. Certificates of Analysis (COAs) should not merely be internal documents but transparently available to consumers and regulators alike. This demonstrates a commitment to product safety and quality, which is paramount in a heavily scrutinized market.

Adherence to Good Manufacturing Practices (GMP) is also crucial, even in the absence of explicit state mandates. Strong GMP protocols provide a framework for consistent quality and safety, reinforcing a merchant's credibility. For payment compliance, demonstrating a proactive, stringent approach to product quality and regulatory adherence through readily available COAs and robust internal processes can be a critical factor in securing and maintaining stable payment processing relationships. Processors are wary of businesses lacking verifiable safety and quality controls, and states like Washington are only increasing that scrutiny.

In conclusion, the proposed legislation in Washington State serves as a stark reminder for all kratom merchants to fortify their compliance frameworks. Staying informed about legislative developments and proactively adopting the highest standards for product testing, labeling, and manufacturing are no longer optional but essential for survival and growth in an evolving regulatory landscape.