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The Alaska Model

by Lyriel & Peter Bee

There are many reasons to love Alaska, breathtaking wild landscapes, beautiful ordinary people, stunning animals and now it is also the northern cannabis industry in America.

Alaska is one of the eight US states that have passed laws that legitimize marijuana for recreational purposes. Voters have approved the measure for adult use back in 2014 and, while supporters criticized the slow pace of the program, as soon as  the market starts operating, it is expected to provide significant economic boost to local and state economies.

Like a lot of goods and services in arid areas, choices are not always abundant. Residents tend to show particular gratitude for anything being offered, so quality is often of secondary importance. The challenges are enormous in Alaska, regarding the cannabis industry – high costs, small population and barriers in businesses supply , especially in smaller rural communities. Access to commercial cannabis is unevenly distributed to the state. Visiting Anchorage, the largest city in Alaska, is very easy to have access to retail outlets, unlike other cities, popular tourist destinations, where access is either not easy or even if you can get products, there is a very limited space for legal consumption.

Alaska has always had a more open and tolerant attitude towards cannabis, than most states in America. Going back to a 1975 court case, the judges found that according to the Alaska Constitution residents in their private lives can hold up to four ounces of cannabis in their home. But this was only for personal use, while trafficking was illegal.

In November 2014, the residents of Alaska have approved the second measure, which legalized cannabis for entertainment purposes, while demanded that the state legislate it just like alcohol. Provided that there had never been licenses for medicinal cannabis until then, a whole new industry had to be created from scratch. The business start-up process has been long, complicated and costly, with some local governments taking steps to make it even more burdensome or forbidding local lease for everyone. It’s been almost two years since voters approved it, until the first store has opened in the small town of Valdez.

The marijuana law for Alaska adults, therefore, does not differ from that for alcohol, just as they asked for it. This means you must be over 21 and have a valid ID to obtain it.

It is allowed to own up to one ounce in the house, in the yard or in a vehicle, but you must buy it from a legal seller and you are not allowed to consume it on the street.

The difference of Alaska compared to other states where hemp is legal, is that no other legitimate state marijuana tax is based solely on sales.

The latest evidence of cannabis sales in Alaska, though, reveal that for the first time since they were legalized, Alaska raised more than $ 11 million, in tax revenue, from marijuana in the financial year 2018, surpassing forecasts for nearly $ 2 million.

Recently published by the Ministry of Finance for tax revenues, it is shown that marijuana cultivation industry in Alaska is constantly growing. Taxes are collected by growers on a wholesale basis, rather than on a retail basis. The state collects $ 50 in tax per ounce of blossom and $ 15 per ounce for the rest of the plant, including strains or leaves commonly used for edibles. It is paid by growers and is imposed when marijuana is sold or transported from a growing establishment to a retailer or to a manufacturing plant. The State Revenue Ministry has said last year that it didn’t have the power to set different tax rates for lower quality flowers.

Kalley Mazzei, Alaska’s excise tax supervisor, who is in charge of supervising marijuana tax collections, said:

“It’s nice to see a new tax that contributes to the state’s revenue, that’s exciting, we have exceeded our forecasts, and we see a steady increase in tax revenue every month.”

Half the income from marijuana taxes are deposited in the Rebate Reduction Fund, which supports programs aimed at reducing criminal behavior, including substance abuse treatment programs of the State Corrections Department and common residential centers.

“Right now we are still in the early stages of development,” said Jana Weltzin, a lawyer who runs the JDW Counsel, a law firm co-operating with cannabis businesses in Alaska and Arizona. Cultivation plants and growers made their first appearance, creating a product for the first cluster of retail outlets that sprang up like mushrooms. According to Weltzin, the industry is grown but not, yet, mature. “It’s almost like a pre-teen phase.”

And if you happen to be in Alaska, there is a list of where to find dispensaries:

The Green Greeks Magazine


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