The Alaskan House of Representatives recently voted on May 10 in a 36-3 vote to approve a bill that implements much needed tax reform.
House Bill 119 would change its $50 per ounce tax on cannabis to just a 7% tax, which was a recommendation from an Advisory Task Force on Recreational Marijuana. If HB-119 passed in the Senate and was signed by Gov. Mike Dunleavy, it would take effect starting July 1, 2024.
Many cannabis business owners begged for relief from the current tax situation, according to a report from Alaska Beacon in September 2023. Alaska Marijuana Industry Association legislative liaison Lacy Wilcox described business owners’ situations as “desperate,” while she spoke with the House Labor and Commerce Committee last year.
The $50 per ounce tax has been in place since Alaska adult-use cannabis was legalized in 2014. According to a report written by the Tax Policy Center, which was released in September 2022, Alaska has one of the highest cannabis taxes. “Alaska’s $50-per-ounce tax exceeds all other weight-based tax rates and the remainder was a local percentage-of-price excise tax (Anchorage),” the report stated.
As a result, many cannabis businesses have been forced to close. “We are all in survival mode, and we are coming together to share our pain with you,” Wilcox added.
One of the task force members who attended the committee meeting in September added that the high taxes makes it hard for legal businesses to compete with the illegal industry. “I can tell you with a high degree of certainty that [marijuana] is still much cheaper on the black market. Alaska’s taxes and the burden on businesses from the Marijuana Control Board is causing prices to stay high and businesses to be uncompetitive,” said task force co-chair Brandom Emmett. They presented an estimate that 40%-50% of cannabis sold in Alaska is from the …
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Author: Nicole Potter / High Times
