Should the Alaska cannabis tax, highest in the nation, be lowered?


In a move meant to bolster Alaska’s biggest agricultural sector, the marijuana industry, the Alaska House Labor and Commerce Committee is set to conduct a hearing this Thursday on House Bill 119, legislation aimed at providing tax relief to marijuana growers.

Since the legalization of recreational marijuana in 2014 through a citizen initiative, the industry has not only emerged as Alaska’s leading agricultural crop but has also become a minor revenue stream for the state and its localities.

Despite its robust start, the industry has hit a plateau, which some attribute to Alaska’s taxing framework. As the highest in the nation, the state’s current tax structure imposes an excise tax that inadvertently fuels black market competition, some analysts say.

House Bill 119 proposes an immediate cut in the tax rate for the marijuana industry. Gov. Mike Dunleavy’s convened Advisory Task Force on Recreational Marijuana underscored the need for this reform, placing tax structure adjustment at the top of their recommendations.

The Alaska Marijuana Control Board showed support for the bill, voting 4-1 in favor of slashing the tax from $50 to $12.50 per ounce of product, a levy imposed on cultivators. This reduction is seen as a short-term remedy to stabilize the industry, with AMCO unanimously agreeing on a long-term solution that shifts the taxable transaction to the retail level through a proposed 3% sales tax, gradually phasing out the cultivation tax.

Critics of the bill caution about the immediate impact on the state’s revenue. However, proponents argue that this tax restructuring is vital for preventing the industry’s decline, which would lead to a more significant drop in tax income. By stabilizing the sector and allowing room for growth, the state anticipates capturing revenue from value-added products, thereby broadening the tax base.

The hearing, set to take place at 2 pm in the Denali Room of the Anchorage Legislative Information Offices, located at the intersection of Minnesota and Benson Blvd., could be a watershed moment for the Alaskan marijuana industry. Stakeholders and citizens alike will be watching the decision that could chart a new course for the state’s marijuana taxation and regulation.

The bill was first offered in March and was referred to Labor and Commerce on March 17. The committee is chaired by Rep. Jesse Sumner of Wasilla District 28, and vice chaired by Rep. Justin Ruffridge of Soldotna District 7. Both are Republicans.

Meeting materials, links, and letters pro and con are at this link.


    • Wouldn’t lose any sleep if the Anchorage pot dealers were put out of business.
      I’m ok with decriminalizing the private use and/or cultivation for personal use – so our police can focus on more important tasks. Treat it like homebrew beer. Share it with your friends – but keep it a hobby.

      But the open sale and marketing of this crap has got to go. Before long, Meg Zelatel and the rest of our ‘lovely’ left wing Assembly will be outright subsidizing their dope dealing allies in the industry in exchange for donations, while the rest of us deal with the eyesore and social costs.

      • It has been legal in AK to privately use and cultivate your own MJ since the AK Supreme court decision in 1975 (Ravin v. State, 537 P.2d 494).

        • I assume you are in favor of legalizing heroin, crack cocaine and crystal meth, then? I mean, if you want to play make believe that all abusive substances the same and want to stay ‘consistent’?

          Since you seem slow, I don’t consider alcohol and pot to be remotely ‘the same’.

          And while on the topic of false equivalency, alcohol is actually more heavily regulated than marijuana in Alaska currently. Try sneaking hard liquor into the Bush and see how fast the feds lock you up. Alaskan communities are not allowed to locally ban the possession or import of weed as is currently done with alcohol currently. Why is the pot industry getting special protection against local regulation? Aren’t they ‘the same?’

    • The higher the tax, the more of this business you drive underground. And when you intentionally do that over time, good luck getting a conviction in a jury trial. One of the things that drove the repeal of prohibition was prosecutors unable to get convictions. Juries simply stopped convicting traffickers.

      There is an old saying about doing the same thing time after time expecting different results. Perhaps you ought to review it before your next recommendation. Cheers –

  1. Stoners whining. The problem for the retailers is neither too high tax nor the blackmarket – the problem is too many dispensaries chasing a market that is contracting due to high inflation. There appear to be more pot shops in Fairbanks than liquor stores outside grocers. The market will adjust without more destabilizing interference from the government, and likely some of the retailers will close due to low profits.
    Remember how the retailers begged to have their product taxed at the wholesale level so they wouldn’t have to report their sales or file tax reports? (Don’t mess with my high man…)
    The answer to low blackmarket prices is simple: CLOSE THE SOUTHERN BORDER!
    There is no need to make retailers rich at State expense while making it cheaper to get high.

    • Not whining. Just being realistic regarding capitalism. Go ahead and tax it high if you think it won’t help the underground, which can easily distribute it to minors with no worries about what it contains.

      • I really don’t think the underground growers will be helped or hurt by any of it. They’ll continue to do what they do regardless of tax laws. I originally voted for the legalization and I see it the same as alcohol. I say go ahead and tax alcohol more too. Maybe they need to tax the consumer when purchasing the items, instead of putting it all on the cultivator.

        Who knows, maybe people need to cut back on their bud use.

          • Those people are taking part in illegal buying. We shouldn’t make a change to appease those who would so easily go buy “underground” because they don’t like the legal market prices. Either buy legally or don’t use it. Of course, people will continue to do what they want. Maybe there needs to be a bigger consequence of illegal Marijuana purchases to make people more likely to choose the legal route.

  2. Levying tax on the cultivator is the core flaw in the current tax structure. The methods of consuming cannabinoids are becoming varied with complex oil extraction, distillation and nanoemulsification manufacturing processes. Tinctures, edibles and beverages will ultimately displace smoking as the primary method of consumption. When the tax cost is added to the cultivation cost before the manufacturing, distributing and retail costs, the consumer ends up paying far more for the end product. As in any industry, the state tax should be levied at the point of sale at the retail level. Unlicensed cultivators are the primary beneficiaries, the public are the primary losers, and the licensed businesses are collateral damage. The state is also losing revenue by driving demand to unlicensed and untaxed entities who in turn distribute untested products to the public.

  3. FYI, many politicians invested in pot and “legal” drug dealing pot shop owners who are for cutting or eliminating pot taxes are also talking about taxing you in other ways like fish box taxes, bed tax, more sales tax, income tax, etc… They don’t want their customers and financially struggling young people bothered with tax on their pot because they want to get them hooked so they have customers for life. Make pot more affordable when our communities are struggling so much with drugs? Don’t believe it’s a gateway drug? Ask anyone doing the harder stuff and they’ll tell you they did pot and were no longer satisfied with its high. Know someone that hasn’t moved on from it to other things? Yeah, that’s because they keep making it stronger. Notice politicians invested in pot are for changing laws so that pot shops can employ easily influenced young people and are involved with children in the community (schools and boys and girls club), while advocating for getting rid of stigma associated with drugs like pot? No, pot isn’t like alcohol. Alcohol is Biblical in moderation, though it says drunkenness is unwise. That said, even a drunk can quickly sober up and go back to work the next morning. A joint or even a puff, however, can stay in your system for weeks, and make you fail a drug test. Most adults can drink a glass of wine with dinner without getting drunk, and without that aim, but every pot smoker gets a high and aims for it. Every mental case that snaps and hears voices has done pot. Look at the increase in violent crimes like murder and assault, look at the increase in people struggling with depression, suicide, addiction, mental health issues, and lack of ambition and employment since the pot measure was passed in 2014. We were sold it because they told us we could keep our PFD and not get taxed if we would only let them fund government with pot tax $. Now your kids and grand kids can’t get off it and they’re going nuts and won’t work and these politicians are still stealing our PFD and proposing new taxes on necessary things for life, and voting for pot didn’t do what they promised. I say tax it out of existence! Those pot shots give me a headache and make me sick with their stench and ugly and embarrassing stores in our neighborhoods that drive down our property values and attract the homeless and the criminals. Gotta be smokin’ something to think cutting taxes on the devil’s cabbage is a good idea!

    • Just because cannabis is fat soluble and remains in your system for longer doesn’t make it any more harmful than alcohol. Nobody has withdrawals from pot but people can die detoxing from alcohol. The fact that its in the bible isn’t a form of argument either. Cannabis has been used for thousands of years too, but that doesn’t mean anything in terms of it legitimacy. It’s never going to go away, but you seem to prefer it be underground rather than regulated, which is a bizarre way of thinking about it. Enough with the reefer madness. People should be allowed to put any substance they want into their bodies as long as they realize they’ll have to deal with any consequences of doing so. All things being equal, booze is far more harmful.

      • Cman, breathing pot smoke into your lungs is just as stupid and dangerous as breathing in smoke from other tobacco products. The result is cancer, heart disease, stroke and all the other lung/cardio pulmonary aliments.

        All of us are now paying more for car insurance due to the increased number of pot smokers on our roads- causing the predictable increase in car accidents/deaths/injuries.

        • Actually, you are very wrong. You are either lying on purpose or you are ignorant.

          You can’t claim any argument against cannabis when research was barred along with use.

          There are other countries which have researched (Isreal and Spain) which a reasonable person would research before bloviating false statements.

  4. Remove the tax .
    It interferes with the ability for alaskans to compete on a national and global scale.
    Alaskan energy and shipping costs are already a handicap.
    Taxes just increase incentives for blackmarkets.

    My personal opinion is no one except those in heavy pain should touch weed products.
    They stink and damage your brain over the long term.

    • I agree with you, American, although I am no particular fan of marijuana, and have not touched it since the early 1980s (and never much even then).

      And one thing I would like to know about today’s pot, why does it so God-awfully stink?!
      It was NOT like that 40 years ago! If they can breed it to be so much more potent in THC, why can they not breed out the stink? The stench of today’s pot is clearly some sulfur-containing compound or compounds, which THC is not.

      For all those who smoke pot, do you realize that you REEK? I am sick of walking past you while out in public! You all smell like you have been sprayed by a skunk, quite literally. It is nauseating and totally disgusting.

  5. I’d like to see a % rate of tax on alcohol, tobacco, and pot. Why should pot get a break and not my cigars and crown royal? I know I pay about the same $ on a 750 mil. In my area as I do in Costco, Anch. Due to high sin tax in the MOA. Why would you buy pot with a tax when the black market makes it cheeper. Pay your high sin tax like the rest of us because Ak has one of the highest in the nation. You couldn’t see this comming way back when THIS PROP passed

  6. As an employer of 50 or more, we struggle with keeping the workplace “ weed free”. I had one of my employees come up to me the other day and tell me he was limiting his weed use to weekends. I told him thank you and gave him a raise. I say leave the tax alone. Please

    • Somewhere along the line, employers in this town are gonna have to have a discussion over what they actually want following legalization of pot, which depending on who you listen to goes back decades.

      Do you want non-inebriated employees? How do you test that?
      Do you want to treat pot like alcohol? How do you measure that?
      As drug testing will detect usage back weeks, how much of a hit on a test is too big and grounds for termination?

      Whatever you end up with as private employers, somewhere along the line you are going to have to get both the State and the feds onboard. Cheers –

      • A piss test can instantly confirm use of at least 8 common drugs. What it can’t show is level of intoxication. At least back when I worked jobs requiring regular testing.

        For good or ill, the next step in this is determining standards for what constitutes over the limit.

        There’s also a potential civil rights argument (probably unsuccessful) regarding testing workers whose jobs are not public safety critical and not obviously under the influence.

        Another potential issue is what this does with employer safety insurance liability. I can see the opportunity/potential for companies to use this for rate increases. Increases passed on to the staff, or funded by staff reductions. Same with healthcare coverage.

        Welcome to the world of unintended consequences.

      • On May 2, 2023, the United States Department of Transportation (“DOT”) published a final rule that authorizes employers to use oral fluid drug testing as an alternative methodology to urine drug testing. This was a watershed moment because the trucking industry isn’t anywhere near the level it needs to be to supply goods and services nationwide. Why is this a watershed moment, because the oral swab has a two day window. If you aren’t currently under the influence of whatever drug you may have used you are now allowed by the United States Department of Transportation to drive a big rig vehicle. A urine test that looked back any number of days or weeks or months is no longer a precursor for employment, let alone driving a commercial vehicle. This rule will impact every employers drug testing regime, in some cases it will make sense to institute a drug testing regime, in others it will simply change the rules that employees take to protect their urine.

        • Not necessarily, Manda — from what I have seen (and smelled), the reek of today’s cannabis will stick to clothing for many days. Hell, I can smell a smoker from a mile away, and cigarette smoke is nowhere near as pungent and stenchful as marijuana smoke.

      • No, he does not come to work reeking but with the potency of the weed these days, it only takes a small amount. I was just happy to hear he was trying to cut back. On another note, a new hire the other day lasted 2 hours, got caught smoking fentanyl in the bathroom. Anybody want to buy a business 🙂

  7. I’m not a weed smoker. I did a bit as a teenager. I prefer a good whiskey. I am sick and tired though of the government punishing us with the sin taxes. I find it humorous that a corrupt government has the gall to punish hard working citizens with a sin tax. It’s laughable.

  8. Drug dealers are not our friends any more than Big tobacco is.

    Daily Mail:

    “Millions more Americans got hooked on marijuana last year and some 100,000 teenagers tried it for the first time, anti-pot activists say about the latest official data.

    Kevin Sabet, a former White House drugs tsar who now campaigns against breakneck legalization, said the government’s annual survey of substance abuse revealed ‘more users and more addiction.’

    The number of teens and adults suffering from cannabis use disorder jumped 14 percent to 19 million, he warned.”

    The group, Smart Approaches to Marijuana has compiled a massive data bank that documents how destructive pot is to our nation- and our kids.

    • Your argument is moot because cannabis is a just a plant that God made and said is good.

      It is not some hard drug and narcotics…or acohol… how many teenagers tried and got chemically addicted to alcohol and actual drugs? Where is your outrage for that?

      But since cannabis is just a plant like tea or coffee… it is as benign of a question as this,
      How many teenagers tried and are addicted to coffee? Where is your outrage?

      It is legal, it is safe and free from getting laced with hard drugs like the hard drug sellers would do.

      It has helped MILLIONS of people, including many vets. These folks are off multiple pharmaceuticals with terrible side affects.

      Where is the victims of the affects of cannabis on the user to commit crime?

      Where are the police and medical reports from the affects of cannabis?

      Less than %1 if any at all, compared to the MILLIONS of people who enjoy the gift from God because it is always healthy whether you consume it for health or recreation.

      You want to condemn a plant who is more like tea than anything else.

      And you want the government to bring anbiron fist on the people who use it?

      You sound like a facist or communist with that attiude…sure is not Christian or American.

  9. Is there a concern that not enough people are smoking dope? We don’t have enough pot shops? Not sure where the concern is coming from. Everywhere I go people are getting high in their cars while driving, walking downtown smoking a joint, and the pot shops seem to be doing so fine they want to open more of them. Let’s face it- the entire reason politicians pushed to allow legalization was because it was a cash cow. Let it continue to be so. The payment of the tax is purely voluntary- no one needs to smoke dope.

  10. A lot of people giving their opinions on this topic. So I might as well share mine. Marijuana is a powerful substance that opens the user to demonic spirits just like heroin, alcohol and opiates do. For the sake of money our state is encouraging addiction.. In spite of all the evidence on how harmful marijuana is our government agencies continue to look the other way. I pray every day that God would step in and deliver this state from evil and corrupt leaders. That people young and old alike would come to their senses and cry out to God to deliver them from this bondage. Revelation 22: 11. Whoever keeps acting wickedly,let him go on acting wickedly. Verse 14 talks about those involved with occult,drugs, those who practice falsehood. Why are people willing to destroy our youth? Remember we will all stand before the judgement seat of Yeshua and he will try us and ask us to give an account of our actions here on earth. It’s not too late to ask for forgiveness.

    • Actually God made Cannabis and it is good just like He said.

      So. If your opinion is in stark contradiction to God, who should reconsider their stance?

      Claiming a food has any spiritual powers is also in direct contradiction to what Jesus and Paul said about food.

      Cannabis is not manipulated with other man made chemicals which turn things into hard drugs… cannabis is not like those drugs in the slightest bit… alcohol is more processed than cannabis and has very little health benefits.

      Sorry, but you have been duped by big government and other misguided religious leaders.

  11. Because prohibition worked so well. Here’s the really funny part; currently cannabis retail sellers are federally taxed at a rate of around 70%. Seventy percent. They pay with bags of cash at the federal IRS building, are given a receipt and told to carry on even though cannabis is still schedule 1 on the Fed’s drug hit list. Pay off The Man to be left alone. I guess the feds are ok with drugs (read alcohol and opiates) as long as they get their $ cut. Buying protection sounds just like how organized crime operates.

  12. Seeing the results of this misadventure… Its time to shut them down.. Alaskan kids are proving to be dumb enough w/o the legalization of this gateway drug..

  13. Weed heads. Good grief. Yeah lets make mind altering recreational drugs a normal thing. Thats logical. Nothing good about it. A single tok needs the stigma of a drinking a 5th of whisky, your a problem drug user. There is no single glass of wine version, if there was nobody would buy the “rag weed” criminalize it, treat the users like the degenerates they are and let them migrate to CO or other. Im done being nice about it. Ak has been ruined by the influx of this kind of person, the mentality and world view. Quadruple the tax, ruin the industry. And yes, alcohol is a drug, its ills on society are well documented. That fact makes my point.

    • You could do that, but that wouldn’t stop it. It would just ALL be underground then, as it was for decades previously. And a single toke certainly doesn’t equate to a 5th of whiskey — lol!

  14. 1. GOD made cannabis, it is a plant and is nothing like man made hard drugs…fact.
    2. Cannabis affects are not ANYTHING like your conditioned brain thinks.
    3. The health benefits are %1000s better than alcohol and pharmaceuticals.
    4. It is a legal business, get over it. You don’t get to be a fascist with this industry while decrying over taxation for everyone else…hypocrisy.
    5. The tax needs to be moved to the retail and off the cultivation, just like EVERY other product.
    6. The tax must be fair and comparable to similar retails.

    You can’t claim you are Conservative and beleive in the Constitution and openly want the government to punish Citiezns engaging in legal commerce.

  15. It’s funny as worried about lowering the weed tax as an impact on state revenue ? Almost laughable as we are not producing the oil in the ground on the NorthSlope for too many reasons to list here and giving up billions of dollars annually . Any weed tax is absurd

  16. Creasoting brains seems like a bad, vulgar idea. Why evacuate reality and be taxed by the government? Seems like the conduct of a scam. No thanks.

  17. Instead of quadrupling the tax, the police need to start enforcing the law against public use with an iron fist. There are few stenches that are more offensive than pot smoke.

    • You may not like the smell, but a lot of people do. I have never seen grown adults act so petulant over their wierd and over zealous negatively to a plant. Haha

      What about us who despise the stench of roses…

      Name 1 instance where the affects of Cannabis has caused crime?… exactly!

      So if someone can’t actually point a finger at cannabis as dangerous, let’s go after the “smell” (eyeroll).

  18. Maybe some subsidies are needed from the Federal government . Kind of like the funds that still subsidize tobacco for the weed industry ? Or maybe just pay the weed growers not to grow weed , kinda like paying the fishermen to not commercially fish off Alaska’s coast ? None of it makes any sense to begin with , so let’s just create some more subsidies


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