As Alaska’s legal cannabis market continues to grow, a new report from the state Department of Revenue and Excise Tax detailed the tax revenues collected from the final months of 2019. And the numbers are promising, with more than $2 million dollars flowing from the legal weed industry to state coffers in October alone.
According to Anchorage NBC affiliate KTUU, $2 million was the highest legal weed windfall in a single month since Alaska began adult-use sales in late 2016. The state has come close to the multi-million mark in past months, but did not reach the goal until October.
“Last year we basically skirted that $2 million mark,” Alaska Department of Revenue Excise Tax Manager Kelly Mazzei said. “In fact we got to 1.9, 1.9, 1.8, but never hit that $2 million.”
Currently, the majority of Alaska’s legal weed industry tax burden is placed on cannabis cultivators, who then pass on parts of those fees to wholesalers, retailers, and customers by way of higher prices. But as the cannabis market continues to grow, Alaska Marijuana Industry Association Executive Director Cary Carrigan said that regulators are now looking into structural changes that would tax the industry more evenly.
“The cultivators are still bearing the weight of this whole structure of taxation,” Carrigan told KTUU. “But we’re really trying to move that forward and change that.”
Once the tax cash is collected, Alaska uses 50% of the cannabis revenue towards the state’s Recidivism Reduction Fund, while the other half is split equally between the Alaska Department of Health and Human Services’ Marijuana Education and Treatment Fund and the state’s general tax coffer.
And with a vast product selection in local dispensaries, impending social consumption sites, and more companies coming online every month, experts are already predicting that the cannabis tax flush will continue into 2020 and beyond.
“I think it’s just a drop in the bucket,” Carrigan told KTUU. “I think the $2 million that we’re getting now, since we’ve jumped the barrier, I think will just keep growing.”
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