The Alaska Beacon
A legislative committee is considering a proposal that would revamp Alaska’s marijuana tax system
In an unusual offseason hearing, a committee of the Alaska Legislature considered a proposal on Friday that could lower the state tax on marijuana sold in the state.
House Bill 119, considered Friday by the House Labor and Commerce Committee, would shift the state’s marijuana tax system from a tax per ounce to a sales tax.
The state’s marijuana industry says the change is desperately needed to help marijuana businesses compete with the state’s black market.
“This is a very desperate situation that we’re in,” said Lacy Wilcox, legislative liaison for the Alaska Marijuana Industry Association, a trade group.
Since the state legalized the recreational sale of marijuana in 2014, it’s been taxed at $50 per ounce, a figure established by the ballot measure that made Alaska the third state to legalize marijuana use recreationally.
Other states have since legalized recreational sales, but at lower tax rates. When local taxes are added to the mix, Alaska taxes marijuana more heavily than any other state, the Tax Policy Center of the Brookings Institution concluded in 2022.
That’s created a financial windfall for the state: In fiscal year 2021, the state collected more than $30 million in marijuana tax revenue.
But industry experts say not all is green with the state’s marijuana industry. In fiscal year 2022, tax revenue fell to less than $29 million, the first time since legalization that marijuana tax revenue fell on a year-over-year basis.
Preliminary figures suggest that tax revenue rebounded slightly in the just-completed fiscal year 2023, but in the fiscal year that began July 1, projections indicate that it will be sharply down, legislative aide Cody Rice told the committee on Friday.
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Alaska marijuana businesses, citing black market, plead for tax relief
