Alaska has been pushing the growth of their recreational marijuana industry since 2014. The great northern state was one of the earliest to legalize cannabis on a retail level, but it has taken them quite a while to get its dispensaries and manufacturers open for business. The state passed AS 17.38 as their citizens demanded legalization back in 2014. AS 17.38, made Alaska’s weed dispensaries legal and created a regulatory body known as the Marijuana Control Board. Even though legalization passed roughly three years ago, it wasn’t until 2016 that Alaska’s weed dispensaries opened their doors. The combination of stringent licensing applications, changing laws and regulations, and local municipality reform slowed Alaska’s cannabis industry from taking off. Now that these kinks are being worked out, the state’s cannabis industry is taking the economy by storm.
Alaska’s Cannabis Industry
Alaska has been slowly and carefully building up its marijuana industry. The state’s ability to regulate the number of approved licenses keeps the industry from getting out of control. When Alaska initially rolled out legalization, there were only four existing legal retail dispensaries. Almost four years later and there are about 70 Alaska weed dispensaries listed as “active status“. While the state may have approved these licenses, many of these stores have not fully opened their bud rooms. Take a look at Anchorage, Alaska; the city has 28 retail pot shops listed as active. Out of the 28 shops, only 19 of these dispensaries are open to the public. Once a weed dispensary opens to the public, its status changes to “effective status“.
Approved Licenses in Alaska:
70 Retail Marijuana Licenses
94 Standard Marijuana Cultivation Facilities
54 Limited marijuana Cultivation facilities
11 Marijuana Product Manufacturing Facilities
4 Marijuana Testing Facilities
Alaska has taken its time building up its cannabis industry. It has assured that the state can control the growth of its market, and hopefully refrain from having the same growing pains as other legalized states. While many of Alaska’s regulations follow existing industries, the state is looking to carve a unique path. Unlike existing cannabis retail markets, Alaska’s weed dispensaries are still focused on the quality of their products. It will be interesting to see if Alaska runs into the similar issues with pricing, competition, and quality.
Alaska’s Marijuana Tax
As we all know, recreational marijuana is a cash cow for state governments. The cannabis industry helps to bring more cash flow to local markets, provides a drastic increase in employment, creates unique entrepreneurial opportunities, and collects millions of dollars in taxes. Alaska is beginning to realize just how beneficial marijuana taxes are for the state’s economy. While Alaska’s industry has not yet taken off, the state already sees what marijuana taxes can bring to local communities.
The state did not begin seeing marijuana tax until October 2016. Just in the first month of operating a legalized marijuana program, and with only four existing businesses, the state collected more than $10,000. Fast forward to January of 2018 and Alaska is collecting nearly $1 million in marijuana taxes each month. Since the first Alaskan weed dispensary opened, the state has collected $8.3 million. Keep in mind that is solely the states marijuana tax, every local municipality can charge a local sales tax on top of the state’s requirements.
State’s Tax Rate on Cultivators/Manufacturers:
- $50/Ounce of Cannabis Buds Sold
- $15/Ounce of Trim Sold
Alaska puts a heavy tax burden on its cultivators and manufacturers. Just from the back end of the industry (cultivators and manufacturers), Alaska has generated over $3 million in tax revenue. Tax rates this high are excellent for the state, but it does make it tough for manufacturers to make their margins. In turn, the prices of marijuana in Alaska are still pretty high. However, it does help to keep the industry honest and professional.
The Future of Alaska Weed Dispensaries
Alaska’s weed dispensaries will continue to see an increase in sales as the state’s cannabis industry grows. It will be interesting to watch this massive state develop its industry. If Alaska continues to control the number of licenses allowed, its market should stay consistent. A new, properly regulated marijuana industry like Alaska’s is beneficial to consumers and the state. The quality of the products is high without the prices breaking the consumer’s bank. At the moment, Alaska’s cannabis industry is a win-win-win for every party. Consumers have access to high-end, legal marijuana, manufacturers are making a killing doing something they love, and the state government is thriving economically. Alaska is a promising cannabis market!
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