Washington State Eyes Drastic 95% Kratom Excise Tax, Sparking Industry Alarm

Washington State Eyes Drastic 95% Kratom Excise Tax, Sparking Industry Alarm

Olympia, WA – The kratom industry in Washington State is at a critical juncture as state legislators consider a sweeping 95% excise tax on kratom products. The proposed tax, outlined in Senate Bill 6196, recently underwent a public hearing before the Senate Labor and Commerce Committee on January 26, 2026. This development signals a significant shift in the regulatory landscape for kratom, which is currently legal but largely unregulated across the state.

What Happened: A High-Stakes Proposal

Senate Bill 6196 proposes an unprecedented 95% excise tax on kratom products, with revenues earmarked for a youth harmful substance prevention account. If passed, the bill would also place the regulation of kratom distribution and retail licensing under the purview of the Washington State Liquor and Cannabis Board. This move follows Washington's recent implementation of a similar 95% tax on certain nicotine products, setting a concerning precedent for the kratom market.

During the public hearing, the American Kratom Association (AKA) voiced strong opposition to the bill's current form. While the AKA advocates for responsible regulation, including age-gating to 21 and clear labeling requirements, they criticized elements of SB 6196 that include felony criminal charges, extensive five-year records retention mandates, and the potential for product and vehicle seizures for minor paperwork errors.

It's important to note that other legislative efforts are also underway. Senate Bill 6287 aims to prohibit sales to individuals under 21 and establish labeling standards. Separately, House Bill 2291 proposes a more comprehensive Kratom Consumer Protection Act (KCPA) with an 11% excise tax, licensing for retailers and processors, age restrictions (21+), and mandatory independent lab testing. However, the immediate concern for the industry revolves around the extraordinarily high 95% tax being actively considered.

Why It Matters to Kratom Merchants and Consumers

The implications of a 95% excise tax are nothing short of catastrophic for Washington's kratom market. Such a steep tax would lead to an astronomical increase in product prices, effectively pricing out the vast majority of consumers and decimating legitimate businesses. Many kratom merchants would likely be forced to close their doors, leading to job losses and a significant reduction in consumer access to regulated products. This could inadvertently push consumers towards an unregulated, illicit market, where product quality and safety are entirely unverified.

For consumers, the impact would be immediate and severe, making kratom an unaffordable option. For merchants, navigating the complex licensing requirements under the Liquor and Cannabis Board, coupled with the immense tax burden and potential for severe penalties, would create an untenable operating environment.

Critical Compliance Implications

Should SB 6196 pass, merchants would face immediate and significant compliance challenges:

• Tax Collection and Remittance: Implementing systems to accurately collect and remit a 95% excise tax would be a monumental task, requiring substantial changes to pricing models and accounting practices.
• Licensing: Obtaining and maintaining licenses from the Washington State Liquor and Cannabis Board for both distribution and retail would become mandatory.
• Record Retention: The proposed five-year record retention requirement would necessitate robust data management systems.
• Age Verification: While supported by the industry, rigorous age-gating to 21 would become a strict legal requirement, as proposed in other bills.

What High-Risk Merchants Need to Know: COAs, Lab Testing, and Regulatory Preparedness

For high-risk kratom merchants, proactive adherence to robust compliance standards is more critical than ever. Even in the absence of a comprehensive KCPA, responsible businesses should already be implementing the following best practices:

1. Certificates of Analysis (COAs): Ensure all kratom products come with a verifiable COA from an independent, third-party laboratory. This document should clearly detail the alkaloid profile (especially mitragynine and 7-hydroxymitragynine content) and confirm the absence of contaminants such as heavy metals, pesticides, microbial pathogens, and other dangerous non-kratom substances.
2. Accredited Lab Testing: Mandate that all testing is performed by laboratories accredited under ISO/IEC 17025 standards. This accreditation is a globally recognized benchmark for testing and calibration laboratories, ensuring the reliability and accuracy of results.
3. Transparent and Accurate Labeling: Labels must be clear, honest, and comprehensive, including ingredients, net weight, suggested serving sizes, and appropriate warnings. This not only builds consumer trust but also prepares for potential future labeling mandates.
4. Age Verification: Implement stringent age verification protocols, particularly given the legislative push for a 21+ age restriction.
5. Stay Informed and Engaged: Closely monitor the progress of SB 6196, SB 6287, and HB 2291. Engage with industry advocacy groups like the AKA to support sensible regulation that prioritizes consumer safety without imposing prohibitive burdens that could dismantle the legal market.

Washington's proposed 95% kratom tax represents a significant threat to the state's kratom community. While the desire for consumer protection is understandable, such an extreme measure risks devastating the legitimate industry and driving consumers to less safe alternatives. Merchants must be acutely aware of these legislative movements and prepare to adapt to an evolving, and potentially highly restrictive, regulatory environment.