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West Virginia legalizes, taxes medical marijuana

  • Apr 25, 2017 | Gail Cole

 Medical marijuana will not be subject to sales tax in West Virginia.

West Virginia has become the 29th state to legalize the use of marijuana for medical purposes, but state residents won’t begin feeling the effect until July 1, 2019, when the first patient identification cards will be issued.

Senate Bill 386 authorizes, “under limited conditions, the use, possession, growing, processing and dispensing of cannabis for serious medical conditions,” such as the following:

  • A chronic or debilitating disease or medical condition that results in the patient receiving hospice or palliative care
  • A chronic or debilitating disease or medical condition, or the treatment of such, that produces the following:
    • Anorexia, cachexia, or wasting syndrome
    • Seizures
    • Severe or persistent muscle spasms
    • Severe nausea
    • Severe or chronic pain that isn’t relieved by standard pain medication

The act specifically identifies numerous conditions that could benefit from marijuana treatment, including AIDS, cancer, epilepsy, and Parkinson’s disease. A newly created Medical Cannabis Advisory Board is also authorized to approve treatment of additional conditions or symptoms that other medical treatments have failed if “the symptoms reasonably can be expected to be relieved by the medical use of cannabis.”

Tax on medical cannabis

Though not subject to West Virginia sales tax, medical cannabis will incur a tax of 10 percent on the gross receipts a grower/processor receives from the sale of medical marijuana to a dispensary. The grower/processor is liable for the tax, which “shall not be added as a separate charge or line item on any sales slip, invoice, receipt or other statement or memorandum of the price paid by a dispensary, patient, or caregiver.”

Tax payments must be remitted to the West Virginia Department of Revenue quarterly on the twentieth of January, April, July, and October. Medical cannabis fees and taxes will be placed in a Medical Cannabis Program Fund. A portion of the revenue generated will go toward a new Fight Substance Abuse Fund. See the text of SB 386 for additional information.

Although medical marijuana is now legal in more than half of the nation’s states, businesses that deal in it often face challenges because cannabis is a controlled substance under the federal Controlled Substances Act. Many banks will not do business with producers or sellers of marijuana, meaning that those businesses often deal in cash — even when paying taxes.

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.