Marijuana tax revenues projected to hit $10M for 2018 fiscal year
As the marijuana industry continues to grow, so does the expected income to the state.
Out of Alaska’s 72 current licensed cultivation facilities, 46 produced taxable product for the month of July, bringing in $577,901.
Great Northern Cannabis has been harvesting marijuana since May.
“Right now, I'm trimming the excess leaves on the buds to clean it up for sale,” said grow hand Edward Petersen.
He’s one of 40 workers the company employs between the growing and retail sides of the business. Petersen said his job with Great Northern Cannabis is paying his way through college.
“I'm a UAA Student and I’m on my last three semesters and without this place I wouldn't be able to go. This has given me a lot, a lot to think about for my future,” he said.
The grow hands process thousands of plants every month. In addition to the hands-on work, the legal marijuana industry comes with stacks of paperwork.
“Every plant has their own ID number, almost like a social security number if you will,” executive vice president Jordan Huss explained. “Those numbers are tracked to when it's itty bitty to when it's grown and harvested. That's a lot of information and a lot of plants to track. We are definitely on our toes every day keeping that up to date.”
The industry is creating jobs and becoming a big money maker for the state. Each ounce of bud and flower is taxed $50; that’s $800 per pound. The rest of the plant—the trim—is taxed $15 an ounce.
With Alaska’s budget shortfall advocates said marijuana is becoming a way to diversify our economy.
“I don't think the cannabis industry is going to solve our state's financial problems but every little bit helps,” Huss said. “This is a market that has unlimited growth potential. It’s going to be something that's sustainable for the long term.”
Tax revenue has increased exponentially since growers’ first crops were harvested. There were only four taxable days in October 2016, which brought in about $10,000.
As more supply came on the market, the revenue skyrocketed. June had 40 cultivators paying $512,500. That’s nearly five-times higher than January’s $107,500 from 17 growers.
Altogether taxes have totaled $2.3 million.
Tax excise supervisor Kelly Mazzei said taxes are projected to hit more than $700,000 in August. If those numbers continue to increase, the state could reach more than $10 million for the first full fiscal year marijuana is legal.
“At this point, if we make just under a million a month, we'll hit the $10.6 million and I don't think it's that far out of reach,” Mazzei said.
The Municipality of Anchorage is also making money off marijuana.
Great Northern Cannabis supplies its own shop in downtown. There’s a five-percent tax on all the products sold on the retail side.
“We're willing to pay the taxes to have it in the public eye and able to have consumers get a variety,” said manager Anita Bradbury.
She said the store has been busy since it opened August 4.
“We do get a lot of tourists and many have never been into a shop like this. And they're thrilled to be able to walk into a store,” Bradbury said.
Between the months it takes for plant maturity and the tracking and taxing, operating a legal facility is costly and time consuming.
Huss said it’s worth it because many people have worked for years to get the industry off the ground in Alaska.
“We take tremendous pride in following the rules, doing this right because we want to set an example of the rest of the country that this is a viable industry that can be done right, it can be done legally and it can be done safely,” Huss said.