Alaska marijuana taxes top $1 million

Last Wednesday, Ben Wilcox ended his workday late: He had to. With the rain having let up in Juneau for one brief day, he took the opportunity to repaint the Franklin Street facade of what will be Juneau’s fourth marijuana shop.

That shop, which has yet to be named and is scheduled to open this fall, is a sign of the marijuana industry’s continued growth in Alaska. On Friday, the Alaska Department of Revenue offered some other signs.

The state of Alaska has now collected more than $1 million in marijuana tax revenue, and the pace of sales appears to be picking up.

June 30 was the due date for cannabis growers to remit taxes collected in May. The state’s haul: $272,600. That’s the most tax revenue in a month since commercial sales began in October. Since that month, Alaska has collected $1.2 million in marijuana tax revenue.

The Department of Revenue predicted earlier this year that the state will collect $2 million in the fiscal year that ended July 1.

The nascent marijuana industry will miss that mark, though the gap will be much less than it seemed a few months ago. By email, Kelly Mazzei of the department’s tax division said preliminary figures for June are “ridiculously fantastic, and rough numbers indicate tax collections could exceed $500,000!”

Mazzei also indicated the state’s outdoor growing operations have not yet made their first harvest. When that happens, the state’s tax revenue may soar; outdoor operations in Alaska are seasonal but much larger than indoor farms.

Under Alaska’s rules, cultivators — not retailers — pay state taxes. Because marijuana remains federally illegal, it is not taxed by the U.S. government.

Eight states and the District of Columbia have legalized recreational marijuana, though only Oregon, Washington, Colorado and Alaska have fully fledged their industries. Nevada began allowing recreational sales July 1.

In Alaska, tax revenue has remained stubbornly below state projections for a variety of reasons including a slower-than-expected regulatory process, the time needed for cultivation and harvest, and the fact that out-of-state investment is not permitted.

Retailers and cultivators have been forced to bootstrap their own businesses, which requires them to gradually increase production as their monthly profits allow.

That slow process has forced the state to repeatedly lower its revenue estimate from $12 million in April 2016 to $5 million in December 2016 and $2 million in April 2017.

Fairbanks remains the marijuana farming capital of Alaska, according to Tax Division statistics. In May, nine cultivators paid taxes there. Anchorage had only two, the same number as Sitka and Juneau. Kenai had three cultivators.

Alaska’s retail stores collectively purchased 289 pounds of marijuana bud from state farms, a new high.

Editor’s note: A previous version of this story misspelled the name of Kelly Mazzei. It has been corrected.


• Contact reporter James Brooks at james.k.brooks@juneauempire.com or call 523-2258.


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