Alaska Marijuana Business

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What is the Demand for Marijuana in Alaska?

In April 2021, the Department of Revenue recorded sales of 34,608 ounces of fully formed marijuana buds and flowers. Immature, seedy, and failed marijuana sold within the month was 19,256 ounces. Trims sold in the month were 31,625 ounces. This gave a total of 85,489 ounces of marijuana sold, aside from the 849 clones also sold in the month. These figures reflect a steady rise compared with the total weight and the number of clones of marijuana sold in April 2020 and April 2019. In April 2020, the total weight of marijuana sold was 68,767 ounces and 617 clones, while the total weight sold in April 2019 was 53,712 ounces of marijuana and 1,088 clones.

The Alaska Regulation of Marijuana prohibits public consumption of marijuana. Violation of this rule makes an erring person liable to a fine of up to $100. However, adults of the age of 21 years and above are permitted under the law to possess, use, display, and transport marijuana within the state provided it does exceed the weight of one ounce. Adults are also allowed to grow, process, or transport not more than six plants of marijuana, with at most three matured ones. They are allowed to possess the harvested products of the marijuana plant in the premises where they are planted. They are also allowed to assist other adults of 21 years and above in the ways described above. The limited personal cultivation and consumption of marijuana, as permitted by the law without requiring a license, also accounts for a large undocumented demand for marijuana in Alaska.

How is Marijuana Taxed in Alaska?

From January 1, 2019, the Alaska Department of Revenue commenced a new marijuana tax model. The tax model is re-established in Alaska State Legislature-Marijuana tax. The provisions require every marijuana cultivation facility to pay a cannabis excise tax at the rate of $50 per ounce of marijuana sold. This provision also applies to transfers of marijuana to either a marijuana product manufacturing facility or a marijuana retail store. Immature or abnormal buds/flowers of marijuana are taxed at $25 per ounce, and trims of marijuana at $15 per ounce. Clones of marijuana are taxed at a flat rate of $1 per unit. Clones are not taxed based on weight.

Alaska does not have a state-wide retail sales tax. However, local municipalities are allowed to charge sales tax on retail sales of marijuana in their local communities. Therefore, the tax rates on the retail sales of marijuana by different municipalities in the state vary. Medical uses marijuana products are not taxed in Alaska.

All revenues from the marijuana tax in the State of Alaska are deposited in the General Fund. A sub-fund of the general fund was created in 2016. The sub-fund is named the Recidivism Reduction Fund. The Alaska Department of Administration separately accounts for 50% of the revenue generated from marijuana tax and deposits this portion in the Recidivism Reduction Fund. The state legislature uses the funds deposited in the Recidivism Reduction Fund Account to fund programs on Public Safety, Health and Social Services, and recidivism programs for the Department of Corrections. Following the Senate Bill 104 passed by the Alaska State legislature on marijuana in 2018, the state also allocates 25% of the marijuana excise taxes to finance the Marijuana Education and Treatment Fund.

What is the Alaska Department of Revenue?

The Alaska Department of Revenue is the agency designated to collect revenues for the government in the state. The Department of Revenue offers a wide range of services, including debt management, property management, municipal bonds, tax revenues, etc. The Tax Division of the Alaska Department of Revenue is authorized to collect marijuana tax in the State of Alaska. The Division is also responsible for collecting other forms of taxes in the state, such as the Alcoholic Beverage tax, Mining License Tax, Oil and Gas Production Tax, Corporate Income Tax, etc. In addition, the division regulates charitable gaming and provides economic forecasting and revenue estimations. Taxes, permits and licenses, and other Alaska Department of Revenue Tax Division services may be accessed using online access. Tax returns to the Department of Revenue are payable through Revenue Online.

The Tax Division of the Alaska Department of Revenue is located at:

State Office Building

11th Floor, Side B

333 West, Willoughby Avenue.

Juneau, AK 99801.

The Tax Division also has offices in Anchorage and Juneau. The addresses of these offices are as follows:

Anchorage Office:

Tax Division

Alaska Department of Revenue

550 West, Seventh Avenue, Suite 500

Anchorage, AK 99501-3555

Phone: (907) 269-6620

Fax: (907) 269-6644

Juneau Office

Tax Division

Alaska Department of Revenue

P.O. Box 110420

Juneau, AK 99811-0420

Phone: (907) 465-2320

Fax: (907) 465-2375

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