Alaska Marijuana Businesses Struggle for Survival as Lawmakers Weigh Tax Reduction Bill

Hey there, folks! Grab your favorite strain and get comfy because we’re diving into a topic that’s making waves in the cannabis world – Marijuana . It’s not just about getting high; it’s about the survival of Alaska’s marijuana businesses.

Marijuana Tax Reduction: A Saving Grace for Alaska’s Cannabis Industry

If you’ve been keeping an eye on the world of cannabis, you’ve probably heard that Alaska’s marijuana businesses are in dire straits. We’re talking survival mode here, my friends. But hey, don’t take my word for it; let’s dive into the nitty-gritty of this situation.

The High Tax Conundrum

So, Alaska decided to jump into the wave and legalize recreational marijuana back in 2014. But there’s a catch: they slapped a hefty $50 tax per ounce on it. Ouch, right? That was all fine and dandy when they were the trailblazers, but times have changed.

Fast forward to today, and you’ll see that other states have joined the party, but with lower tax rates. When you add in local taxes, Alaska’s marijuana is taxed more heavily than anywhere else in the country. The Tax Policy Center of the Brookings Institution even gave it the dubious honor of being the top taxer in this category in 2022.

Although this may be true, the state raked in over $30 million in marijuana tax in fiscal year 2021. But here’s the kicker: fiscal year 2022 saw that number drop to less than $29 million. It’s the first time it dipped since legalization. And the projections for fiscal year ? Well, they’re looking about as promising as a soggy joint.

A High Stakes Gamble

The Alaska Marijuana Industry Association isn’t pulling any punches on this one. They’re predicting that dozens of marijuana businesses will be going up in smoke this year. To make matters worse, many of these businesses are behind on their taxes. Talk about a buzzkill, huh?

“We are all in survival mode, and we are coming together to share our pain with you,” says Lacy Wilcox, the legislative liaison for the Alaska Marijuana Industry Association. It’s a desperate plea from an industry trying to keep its head above water.

The Cry for Help

But there might be a glimmer of hope on the horizon. Governor Mike Dunleavy had the foresight to convene a recreational marijuana task force last year. They’ve been analyzing the industry’s progress, and one of their recommendations is a new tax system.

Enter House Bill 119

House Bill 119 is the new kid on the block, and it’s got the to change the game. Originally, it aimed to swap out the $50 per-ounce tax collected by cultivators for a 3 percent sales tax collected by retailers. Not too shabby, right? But hold on to your rolling papers; there’s a twist.

The bill got a makeover, and now it’s sporting a 10 percent sales tax. Industry insiders aren’t exactly doing the happy dance about this change. They see it as a sidestep rather than a solution to their problems.

The Great Tax Experiment

Cody Rice, a legislative aide, has been crunching the numbers for the Labor and Commerce . Lower taxes might just be the lifeline that the marijuana industry needs. As the market expands, it could lead to more state tax revenue. But, and it’s a big but, there’s a downside.

In the short term, tax revenue is going to take a hit. State anti-drug programs that rely on marijuana tax revenue will have to scale back or pause their operations. It’s a tough pill to swallow, but if tax revenue bounces back, there’s hope that these programs can get back on track.

What’s Next?

So, where do we go from here? The committee hasn’t made any snap decisions. But Rep. Jesse Sumner, the committee chair, hinted that they might consider amendments to the bill in the coming months. Stay tuned, my fellow cannabis enthusiasts; this could be a game-changer.

In conclusion, the Alaska marijuana industry is facing some seriously cloudy skies. The high taxes have them treading water, and survival is the name of the game. House Bill 119 might offer some , but it’s a double-edged sword. Lower taxes could mean a brighter future, but for now, it’s a gamble. Let’s hope that Alaska finds the right balance to keep the green rolling in without stubbing out the industry’s growth.

And lastly, a big shoutout to James Brooks from Alaska Beacon for shedding light on this smoky situation. Thanks, buddy!


Q1: What led to the dire situation of Alaska’s marijuana businesses?

A1: Alaska’s marijuana businesses are in a tough spot due to high taxes, making them less competitive against the black market.

Q2: How has the tax revenue from marijuana sales in Alaska changed recently?

A2: Tax revenue saw a drop in fiscal year 2022, marking the first decline since legalization, and fiscal year 2023 projections aren’t looking promising.

Q3: What is the proposed solution to alleviate the burden on Alaska’s marijuana industry?

A3: House Bill 119 aims to shift from a per-ounce tax to a sales tax system, but there’s about the proposed 10 percent sales tax.

Q4: How might lower taxes impact the marijuana industry in the long term?

A4: Lower taxes could lead to greater state tax revenue as the legal market grows, but it comes with the drawback of reduced revenue in the short term.

Q5: What’s the outlook for potential changes in Alaska’s marijuana tax system?

A5: The committee is considering amendments to House Bill 119, and the situation is fluid; we’ll have to wait and see how it unfolds.

Rosemary Puffman
I'm Rosemary, a staunch supporter of cannabis legalization and its potential benefits. My roles as a writer, cannabis entrepreneur, and informed investor allow me to contribute to the evolving narrative around cannabis. Through my writing, I aim to destigmatize and educate, while my business ventures and strategic investments align with my belief in the positive impact of responsible cannabis use.

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