Alaska Lawmakers Considering Changes to State’s Cannabis Tax System

Alaska lawmakers are considering a proposal to lower the state tax on cannabis from a per-ounce tax to a sales tax, the Anchorage Daily News reports. Under the state law, enacted in 2014, cannabis is taxed at $50 an ounce. 

In fiscal year 2021, the state collected more than $30 million from cannabis taxes, the report says. However, according to a 2022 report from the Tax Policy Center of the Brookings Institution, when local taxes are included, Alaska taxes cannabis more than other states. In fiscal year 2022, cannabis tax revenues in Alaska fell to less than $29 million – the first time cannabis tax revenues dropped year-over-year.   

Last year, Gov. Mike Dunleavy (R) convened a task force to analyze the adult-use cannabis industry’s progress, and one of the recommendations in the report by the group was a new tax system. 

As originally drafted, the measure would have moved from the $50 tax, which is collected by cultivators, to a 3% tax collected by retailers. The bill was amended to a 10% sales tax.  

Labor and Commerce Committee Chair Rep. Jesse Sumner (R) told the Daily News that the committee, which has so far not taken action on the proposal, may consider additional amendments at a meeting in October or November.