Alaska Marijuana Business

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What is the Demand for Marijuana in Alaska?

The Alaska Department of Revenue publishes monthly reports of marijuana sales and taxes for the entire state. Its latest marijuana sales reports show that the state sold 89,789 marijuana plant products, including buds, flower, seeds, and seeds, contributing to a total marijuana tax of $2,361,475 for January 2023. In contrast, the January 2022 report shows that 86,962 plant products were sold to generate a tax bill of $2,490,656. Therefore, marijuana sales and taxes largely remained the same across both years.

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 Agency Taxing Marijuana Businesses in Alaska?

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