For the second month in a row, revenue to the State from marijuana sales has slid.
Cannabis tax dropped 18 percent between October and December, according to the Department of Revenue.
December sales of raw cannabis brought in $784,176 in taxes, compared with $872,197 in November and $953,591 in October. September brought in $723,757 in to State coffers. January sales have not been reported yet.
Bruce Schulte, the former board chairman of the Marijuana Control Board, views this change as a maturing of the market. When commercialization began, he said, consumers were buying more buds, which are taxed at $50 per ounce at the cultivar level. The trim — leaves and stems — is taxed at $15 an ounce and is used in manufactured edibles.
Schulte said the consumer demand may be shifting toward those manufactured products as they become more available. The manufacturing of consumables is still in its infancy in Alaska.
October was the end of the first year of legal commercialized marijuana sales after voters approved legalizing commercialized marijuana in November of 2014.
In October, growers sold 1,004 pounds of bud and 626 pounds of trim, but in December those numbers were down to 824 pounds of bud and 519 pounds of trim.
In 2016, the Revenue Department predicted the State would receive $6 million in 2017 and $12 million in 2018 from marijuana sales.
In fiscal years 2017 and the first part of fiscal year 2018, the state has collected a combined $6.3 million in taxes. At the same time, the number of taxpaying growers has increased from 44 to 82 from 2017 to 2018.
Fairbanks remains the heartbeat of the pot cultivar industry in Alaska, with 15 taxpaying entities. Anchorage has 12.
The numbers may suggest the greatest risk to an expanded presence of marijuana in society: A loss of popularity. If marijuana is no longer “cool,” the marijuana industry and the advocates that support it may fade away.
We can only hope.
Walker administration officials have always been more bullish on dope tax revenue forecasts than many state and private economists have been. The optimists on the 3rd Floor and within the political appointee class have believed that cruise ship passengers would stock up while on their shore-side excursions, and that those sales would amount to the larger portion and a huge treasury windfall. However economists have believed that a greater part of Alaska sales would not be sales at all but Alaskans trading and bartering this now legal drug the way they do salmon, vegetables and home-brew. Alaskans have always preferred the cash economy when taxes are involved.
Not too hard to imagine that in a state shrouded in darkness during the winter months, months when the population wanes, during the throes of an economic downturn…that a plant largely grown indoors under expensive lights would not be grown in the abundance it was during better, warmer, lighter times.
Omg, it’s not rocket surgery, it was the holiday season. You don’t give cannabis to granny for Christmas traditionally. You don’t spend money on cannabis if you have to buy presents for kids, angel trees, and go white elephant parties. Gas was high and the weather was crappy. It’s normal. Sales were so high the previous months because of PFD checks. Sales will pick up after the holidays and there’s will be another spike as income tax returns roll in. Cannabis isn’t cheap. Medical patients don’t get their supplies covered under insurance. You have to pay as you can afford. The cannabis economy is not crashing…
There are several factors to be considered when discussing the amount of revenue exposed to the State of Alaska through the Marijuana industry and the shortfalls of its expectations.
The first of those being ridiculous and discriminatory regulation that is hampering the ability for this industry to grow and even sustain a moderate consistency.
In Anchorage, though the Anchorage assembly seems to support the industry, the unchecked and unmitigated powers of their subordinates, primarily the building department and land use department are making it nearly impossible to launch a successful business with the average application and approval time ignoring the state law mandate that requires the State to complete and application and its approvals to 90 days. The average time required to proceed past the city level is over 14 months of wait time. This issue causes businesses to expend hundreds of thousands of dollars in unmitigated waste wading through the power trips of employees who pretty much re-write the rules and regulations to suit their moods, leaving new businesses in a position where they are unable to produce a sustainable amount of product. Monies that could have been used to grow their businesses and in turn grow the tax coffers of the State of Alaska.
As well regulations that were written in a discriminatory fashion against the marijuana industry that among many factors regulate the smell of the produced product. Marijuana businesses are the only businesses whereas the smell of their products are not regulated and controlled by a scientific measure ( Parts per million ) of terpene exposure, but rather a much broader and seemingly restrictive accountability, that being the detection of its odor by a ” Normal Persons Smell” Violations of this ordinance are subject to large fines and wasted time to mitigate that are directed to the building department coffers as they are investigated and enforced by the very department that created the ordinance. This ordinance creates an inability of producers to invest into the growth of their discipline and create more product and thus more state tax revenue. Though this ordinance has been challenged by many, the Anchorage Assembly and the State of Alaska seems powerless and unconcerned in its ability to rein in our building department activities. This is a perceived discrimination towards marijuana businesses as it blatantly ignores the often disturbing odiferous effects of countless business and industries in our community and State, IE Coffee, Breweries, Power Producers, Airport fumes. Refuge facilities, as well as a whole host of others that are not regulated by this “Normal persons smell “Ordinance.
Further, the State of Alaska as well as the communities of which producers are operating are offering no protections from the criminal aspects of this industry. Businesses being robbed and burglarized at will while the police department seemingly ignores the activity, giving far more concern and precedents to baggage thieves at our international airport.
The state of Alaska will never prosper from an industry of any kind until they look at it as a serious industry and enact measure to help it grow instead of regulation to ensure its failure. The blame in this consideration falls directly on the State of Alaska who is stifling the very industry it has created and is expecting to capitalize from. State tax revenues could grow and sore if only allowed to through common since practices and working with verses against the businesses who provide such revenues.
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