Alaska Sets Sales Record, Still Lags Behind Projections

Published on August 3, 2017 · Last updated July 28, 2020
"The city of Sitka, Alaska."

Summer tourism appears to be giving a big boost to Alaska’s newly legal cannabis market. As after starting out at a snail’s pace, adult-use sales are catching on with locals and tourists alike—and finally bringing in tax revenue for the state.

According to data from the state Department of Revenue’s tax division, June was a record-breaking month in Alaska, with sales of 547 lbs. of cannabis flower reported across the state. That generated hundreds of thousands of dollars in tax revenue, with cultivators paying $512,000 in taxes.

In Alaska, growers—not retailers—remit taxes to the state, and in addition to the $50 per ounce tax on marijuana flower, they pay $15 per ounce of other plant parts purchased by manufacturers.

“It’s nice to see a new tax bringing in state revenue. That is exciting,” Kelly Mazzei, the state’s excise tax supervisor, told the Juneau Empire.

Since the start of the 2017, Alaska has seen steady increases in the amount of flower—as well as trim and other cannabis products—moving through the market.

But while the state has set records month after month in terms of cannabis production and sales, the industry has fallen significantly behind its initial projections, which have already been reduced twice.

From October—the first month of legal cannabis sales—through June, Alaska collected roughly $1.75 million in cannabis tax revenue—over a quarter of a million dollars less than the state’s projected.

Alaska officials currently estimate that during fiscal year 2018, the state will collect $10.6 million in taxes. To do so, reports to the Juneau Empire, the state would need to average about $883,000 per month in tax revenue.

The slow pace of the industry rollout is the result of several factors, but the sluggish rollout and implementation of regulations is one of the main reasons. As a consequence, sales started four months late.

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Gage Peake
Gage Peake
Gage Peake is a former staff writer for Leafly, where he specialized in data journalism, sports, and breaking news coverage. He's a graduate of the University of Nebraska-Lincoln's College of Journalism and Mass Communications.
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