Washington State Lawmakers Propose Staggering 95% Kratom Tax, Threatening Industry Viability

Washington State Lawmakers Propose Staggering 95% Kratom Tax, Threatening Industry Viability

OLYMPIA, WA – The kratom industry in Washington State is bracing for a monumental challenge as lawmakers consider imposing an unprecedented 95% excise tax on kratom products. This proposed legislation, introduced in the state Senate via bills SB 6196 and SB 6287, signals a dramatic shift in how kratom is regulated and accessed, potentially reshaping the market for both merchants and consumers.

What Happened: A Sweeping Regulatory Overhaul

The core of the proposed legislation is a staggering 95% tax on kratom products, to be levied on distributors upon entry into Washington for sale. Revenue generated from this substantial tax is earmarked for programs aimed at preventing and reducing youth access to harmful substances.

Beyond the tax, the bills introduce a comprehensive regulatory framework. This includes mandatory statewide licensing for kratom distributors and retailers, requiring applicants to undergo criminal background checks. Furthermore, the legislation proposes a ban on kratom sales to individuals under 21 years of age and mandates clear product labeling that lists all ingredients. Violations of these proposed laws, including operating without a license, would be classified as a felony offense, with provisions for license revocation.

This comes at a time when kratom remains largely unregulated at both federal and state levels in Washington, currently available over the counter. Compounding the uncertainty, the Washington State Department of Health is also independently considering classifying kratom as a Schedule I controlled substance, a move that would effectively ban it entirely, in response to a petition citing concerns about abuse potential and public health risks.

Why It Matters: Impact on Merchants and Consumers

The implications of a 95% excise tax are profound. For consumers, the price of kratom products could nearly double, making them prohibitively expensive for many. This drastic price hike would likely force a significant portion of the market underground, where product quality and safety are entirely unmonitored.

For kratom merchants, the proposed tax, coupled with new licensing and operational requirements, could be an existential threat. The substantial increase in cost of goods would severely impact profitability and business viability, potentially leading to widespread closures of legitimate businesses. This would not only limit access for adult consumers but also eliminate businesses that currently operate transparently and contribute to the state's economy.

Compliance Implications for High-Risk Merchants

Should these bills pass, the compliance landscape for kratom merchants in Washington will transform overnight. Key implications include:

• Mandatory Licensing: Distributors and retailers will be required to obtain specific state licenses from the Liquor and Cannabis Board.
• Age Verification: Strict enforcement of a 21+ age restriction will necessitate robust age verification protocols.
• Enhanced Labeling: Products must display clear, comprehensive labels detailing all ingredients.
• Criminal Background Checks: A new hurdle for business owners and key personnel.
• Felony Penalties: Operating without proper licensure would carry severe legal consequences.

What High-Risk Merchants Need to Know About COAs, Lab Testing, and Regulatory Compliance

In this highly volatile environment, proactive compliance and transparency are more critical than ever for high-risk kratom merchants.

1. Prioritize Third-Party Lab Testing and COAs: Even in the absence of explicit state mandates (beyond general ingredient listing), rigorous third-party lab testing and readily available Certificates of Analysis (COAs) are paramount. These documents should verify product purity (testing for heavy metals, pesticides, microbial contaminants) and potency (accurate levels of mitragynine and 7-hydroxymitragynine). This demonstrates a commitment to consumer safety and product quality, directly addressing concerns often raised by opponents of kratom.
2. Ensure Accurate Labeling: The proposed legislation emphasizes ingredient disclosure. Merchants must ensure their current and future labeling accurately reflects all components, backed by lab testing.
3. Monitor Regulatory Developments Closely: The situation is fluid. Merchants must stay informed about the progress of SB 6196 and SB 6287, as well as the Washington State Department of Health's separate consideration of scheduling kratom as a Schedule I substance. The latter would render all other regulations moot by effectively banning the substance.
4. Support Advocacy Efforts: Organizations like the American Kratom Association (AKA) advocate for reasonable regulation, such as the Kratom Consumer Protection Act (KCPA), which includes age restrictions and labeling requirements, but opposes punitive taxes. Supporting such efforts can help shape more equitable legislation.
5. Prepare for Operational Changes: Anticipate the need for new licensing applications, updated age verification systems, and revised labeling practices to comply with potential new laws.

The proposed 95% tax and accompanying regulations represent a significant challenge to the kratom community in Washington. Vigilance, proactive compliance, and informed advocacy will be essential for navigating these turbulent waters.