Alaska was the third state that legalized marijuana for recreational use after a successful 2014 ballot initiative. It looks like it is paying rewards as the Alaska Department of Revenue has reported that in the fiscal year 2018, the tax revenue from marijuana cultivators stands at more than $11 million. Though the department was expecting a boost, this figure is much more than their expectations. In 2017, the total revenue from marijuana taxes was only $1.7 million.
Kelly Mazzei, the excise tax supervisor with DOR said, “We absolutely are exceeding our predictions and additionally we are seeing a very steady increase in tax revenue collection each month.” She further added, “I don’t believe the market has saturated and we haven’t seen exactly what capacity the state is going to operate in as far as cultivation and retail stores and the other facilities. So, we could continue to collect an unknown amount of money in taxes.”
The revenue generated this fiscal is more by nearly $2 million than the expectations with the highest collections happening in the month of June, which amounts to more than $1.2 million. The Department of Revenue is of the opinion that July will mar the collections of June and emerge as the record-breaking month.
The revenue collected is being used for different causes as half of it is allocated to “Recidivism Reduction Fund”. This fund helps in paying for different programs that are aimed at lowering the recidivism rates in the state. This includes the Department of Public Safety’s council on domestic violence and sexual assault and the Department of Correction’s substance abuse treatment program and community residential centers.
From next year, another 25% will be allocated towards the education and awareness about marijuana under Senate Bill 104. This bill turned into a law this week itself when Governor Walker signed it. After deducting all these allocations, the remaining amount from marijuana revenue will be utilized for other state services.
There are also proposals to add a third tax rate to the marijuana cultivation tax system. So far, the marijuana plant is taxed at $15 an ounce except for buds and flowers, which are taxed at $50 an ounce. The current proposals are aimed at taxing the immature or abnormal buds at $25 an ounce. Till August 10, the proposal is out for public comment.
