Sen. Ann Rivers, a Republican from La Center who sponsored Senate Bill 5887, said Thursday that the bill was doomed by "immovable positions" on that issue.
"I'm disappointed, but I think that this gives us the opportunity for people to come together and say we must do something," she said. "Failure to act is not an option."
Lawmakers were seeking to establish regulation of the medical market as the state's new voter-approved recreational market is about to take hold this summer.
Last week, the Senate passed a measure that moved to merge the medical with the still-developing legal recreational market.
That bill would have reduced the amount of marijuana and the number of plants patients could possess, would have eliminated dispensaries by the fall of next year unless they received a license through the state, and would have established a patient registry.
At the end of 2012, Washington and Colorado became the first states to legalize possession of recreational marijuana by adults 21 and older. The voters also called for the establishment of systems of state-licensed pot growers, processors and retail stores.
Sales have already begun in Colorado, but licensed stores in Washington state aren't expected to open until this summer.
Washington has allowed the medical use of marijuana since 1998. The hundreds of dispensaries that currently exist are not regulated by the state, but loosely operate under current state law on "collective gardens" that allows qualifying patients to pool their resources to grow, produce and deliver medical cannabis. Language under the bill put forth by Rivers, including an amended one put forth by the House this week, would do away with collective gardens by Sept. 1, 2015.
Lawmakers have worried that the largely unregulated medical system would undercut the taxed recreational industry established by Initiative 502. U.S. Justice Department officials have warned that the state's medical pot status quo is untenable.
Rep. Cary Condotta, R-East Wenatchee, said that it was only fair for local governments to get a share of the proceeds, since they'll be facing potential impacts from the new market. However, he said he had concerns about the underlying regulation of the medical market because the recreational system is not yet up and running, adding that the impact on medical marijuana patients should be looked at more closely.
"We can't integrate into a system that doesn't exist," he said.
Medical marijuana patients have flocked to public hearings on the issue in both the Senate and House in recent weeks, decrying the potential changes, though there are varying opinions within that community on whether regulation is needed.
Ezra Eickmeyer of the Washington Cannabis Association, a group that represents some medical marijuana patients, expressed concern about what the federal government may do if the Legislature doesn't act.
"There is no easy safe route here," he said. "Without a bill, we have to worry about the feds taking action this year. That was something we were hoping to avoid."