The northern territory has enjoyed several million-plus months this year from marijuana sales
Alaska was one of the first states to acknowledge the virtues of marijuana. Since it began legislating the industry, it has been able to make a substantial profit off sales, pulling in around $15.8 million in tax revenue in the past year. Alaska approved recreational marijuana use in 2014, paving the way for other states to understand the economic value of its legalization.
Alaska earned $1.5 million in tax revenue from marijuana in August – a record for the state. This continues a trend that has seen the state pick up at least $1 million each month this year, except for February. Year on year, the state has seen its market grow from around 1330 pounds (trim and flower) to more than 2,580.
The tax is paid by cultivators when they sell or transfer marijuana from their facilities to a retail store or manufacturing center. About half of the tax revenue goes for programs that provide educations for repeat criminal offenders and around 25% is destined to other treatment and education programs per legislation that was introduced earlier this year.
The market is still a little up and down, with the summer months typically performing better. The executive director of the Alaska Marijuana Industry Association, Cary Carrigan, explains, “The cyclical nature of the retail industry here creates a boom-and-bust system for Alaska. It’s super good – really hot in the summertime – but it slows down quite a bit in the wintertime when the tourists aren’t here.”
There are now more cannabis businesses in Alaska than ever before. There are 121% more retailers and 109% more cultivators. However, the market isn’t saturated. Says Carrigan, “It’s taken cultivators and retailers some time to get to the point where they’re operating in a place where they understand they have to slow it down and pull it back a little bit in the fall and winter, then ramp it back up in the spring.”
Historically, cannabis prices in Alaska have been some of the highest among all states that have legalized marijuana. This is changing, though, as an increase in production is giving way to a larger supply, which is helping to influence costs. This trend should continue as the market matures.