How the municipality is spending its marijuana money
Slowly but surely, more marijuana retail stores are sprouting up in Anchorage.
A map on the municipality of Anchorage's website shows nearly 30 shops open and operating across the municipality. The more cannabis sold, the more green the municipality sees from its 5% tax on marijuana retail sales.
Chris Schutte, the municipality's director of economic and community development, tracks the tax money.
“What we've seen over the past three years has been a steady increase in the revenue generated by marijuana retail sales and therefore an increase in the collection of retail sales tax," he said.
Annual revenue from the tax has grown significantly from approximately $600,000 in 2016 to a projected $4 million in revenue for 2019. As supply has grown, Schutte says prices for marijuana buds and flowers have dropped by nearly half.
“We’ve seen the average prices slowly decline for marijuana buds and flowers from close to $600 per ounce in 2017 to about $322 per ounce in 2019,” Schutte said. “Additionally, we’ve seen growth in the types of marijuana products sold: buds and flowers made up nearly all of the marijuana product sold in 2017, but now pre-rolls, edibles, and other products are making up approximately 45% of the total quantity of marijuana sold in the municipality.”
While finding an approved space for a pot shop can be challenging in Anchorage, more stores are preparing to open.
“There's no cap on it and deliberately so. You don't want to create a secondary market for the marijuana licenses themselves like you have in the liquor industry or the taxi cab industry so that's simply a byproduct of the market itself,” Schutte said.
Marijuana sales taxes goes into the municipality's general fund to help pay for government services like the police and fire departments. The more cannabis cash that's collected, the less property tax is needed.
“All of the marijuana tax revenue is an offset on the property tax side," Schutte said. "We estimate about $4 million in marijuana retail sales tax collected this year. That will result in a $4 million decrease in property tax collection."
While Schutte anticipates retail marijuana sales to plateau at some point, he says the money will keep rolling in.
The municipality's marijuana retail sales tax is different from the state's because the state gets its money from charging growers $50 per ounce of bud and $15 for all other parts of the plant.
In the first four months of this year, that tax has brought in more than $6.5 million to the state.
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