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Alaska Marijuana News

Here's where half of the revenue from Alaska's legal pot will go

  • Author: Laurel Andrews
  • Updated: July 14, 2016
  • Published July 12, 2016

Alaska hasn't yet begun collecting taxes on commercial marijuana, but the state has already allocated half of the expected revenue from legal pot.

On Monday, Gov. Bill Walker signed Senate Bill 91, a comprehensive criminal reform bill meant to reduce the state's prison population and its associated costs. Included in the bill is a provision that diverts half of the state's cannabis excise taxes to programs aimed at reducing repeat criminal offenders, under a newly created recidivism reduction fund.

Marijuana will be taxed at $50 an ounce. Based on projected marijuana sales, the state hopes $3 million will go toward the recidivism reduction fund in fiscal year 2017, and $6 million in subsequent years.

The marijuana tax money will be used to fund the Department of Corrections' Substance Abuse Treatment Program, which will receive $700,000, and community residential centers, which will receive $300,000; the Department of Health and Social Services' Behavioral Health Treatment and Recovery Grants, which will receive $1 million; and the Department of Public Safety's Council on Domestic Violence and Sexual Assault, which will also receive $1 million.

Nobody knows for sure how much revenue the commercial cannabis industry will bring in to the state. Ken Alper, director of the Department of Revenue's tax division, said Tuesday that the state's annual estimate is $12 million, but noted that in Colorado, Oregon and Washington, tax revenues have far exceeded forecasts.

"It's a reasonable, mathematically sound estimate, but that doesn't mean it's going to be close to right," Alper said.

The amount collected in the current fiscal year, which runs July 1 through June 30, 2017, is expected to be millions less, Alper said, as retail marijuana stores won't open until mid-September, at the earliest.

If marijuana taxes don't cover the $3 million, money can be diverted from the state's alcohol and other drug abuse treatment and prevention fund, which is funded by alcohol taxes.

Meanwhile, the revenue department is constructing a room in downtown Anchorage solely for marijuana businesses dropping off their excise tax, as much of the money is expected to be paid in cash. The department is also creating mechanisms for people to ship excise tax cash through the mail.

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