In nearly six months, the state of Alaska has collected over $4.5 million in marijuana tax collections, according to reports released by the Alaska Department of Revenue.
Taxes are incurred at $50 for every ounce of bud or flower, and $15 for every ounce of trim. From July to December of 2017, cultivators have paid hundreds of thousands of dollars in excise tax per month. The number almost reached one million in October with total tax revenue at $953,591.
This is only for the first half of fiscal year 2018, which will end this June. After the state began collecting marijuana tax in October of 2016, the total revenue for fiscal year 2017 came to $1.7 million.
Brandon Spanos, deputy director of the department, says that the numbers are not surprising.
“We actually projected a larger number for the first year and it was based on the available data, which there wasn’t very much,” Spanos said. “But we did project, I think, about [$]12 million in the first year.”
When the state first started tax collection for marijuana, there were only four taxpayers at the time. By the end of FY17, that number had grown to 44 and now, it has almost doubled.
“There’s definitely a high demand for getting [in the business]. I think it’s definitely pretty competitive,” Josh Morris, an employee at Cannabaska, said.
Cannabaska is a recreational marijuana dispensary that opened its doors last year in May. Morris has only been with the store for about three months and says that they often get customers that come in wanting to know about the industry.
“There’s someone that comes in asking about work, asking about how to get a job, asking about how to get into the business, stocks… ‘How do I go about opening a retail establishment?'” Morris said. “There’s all different types of questions people come in asking.”
Although he didn’t expect the tax collections to have already reached over $4 million, Morris sees “a lot of changes happening” in the industry.
Instead of Alaska only having a handful of cultivators for retailers to work with, there are now 82 of them. The supply and demand has shifted and Morris says that retailers are negotiating with cultivators, some even deciding to grow their own product.
“All in all, that brings the price down, which is good for consumers, but in the long run, it’s gonna be like any other business,” Morris said.
According to a document shared online by the state’s Alcohol and Marijuana Control Office, there are currently over 50 license applications that are pending review by the board. The license types range from retail stores to cultivation or manufacturing facilities. Applicants are located from all over Alaska, such as Anchorage, Fairbanks, Houston and Ketchikan.
But an increase in cultivators would not directly translate into a similar increase in volume and sales.
“They could be any size. So, just because there’s a hundred new licenses, doesn’t mean we would see, potentially, even a doubling of the volume if they were all really small cultivators,” Spanos said.
Marijuana tax revenue accounted for only 0.17 percent of the state’s total tax collections in FY17.
Spanos says that cultivators have until the end of February to make their payments, but initial data for January tax revenue is already approaching one million dollars, bringing the monthly trend back up.