Alaska Cannabis Legalization

Alaska is the first state to have a single cannabis industry, rather than separating out medical and recreational markets.

In 1998, Alaska legalized medical cannabis through majority vote of Ballot Measure 8 which allowed qualifying patients in the state to utilize medical cannabis as a form of medicine.

In November 2014, the production, sale and distribution of recreational cannabis was legalized through Ballot Measure 2 which took effect on February 24th 2015. The measure legalized the possession and use of recreational cannabis by adults aged 21 years and older and established the Marijuana Control Board (MCB) to regulate the recreational cannabis market. In 2015, the MCB adopted regulations in 3 AAC 306 and they became effective on February 21, 2016. The licensing framework outlined in 3 AAC 306 applies to both recreational and medical cannabis establishments; there is no distinction between them in Alaska’s cannabis business licensing framework.

In 2019, Alaska became the first state to allow on-site consumption and from April 11, 2019, cannabis dispensaries were able to apply for a “special on-site use endorsement”. A licensed retail marijuana store with an approved onsite consumption endorsement is authorized to sell, for consumption at the time of purchase and only in an area designated as the marijuana consumption area:

• marijuana bud or flower, in quantities not to exceed one gram to any one person per day;
• edible marijuana products in quantities not to exceed 25 mg of THC to any one person per day; and
• a vaping device that contains not more than 0.3 grams of marijuana concentrate to any one person per day; a person may not consume marijuana concentrate onsite by a means other than vaping.

Alaska Cannabis Licenses

Available license types

• Retail cannabis store license
• Cannabis cultivation facility license
• Cannabis product manufacturing facility license
• Cannabis testing facility license

Vertical integration is permitted. Only testing licensees are not allowed to hold other cannabis business licenses. Alaska cannabis licenses are tied directly to the physical location for the business. Moving to a new location requires a new license application. There is no cap on the number of licenses that can be issued, or the number of licenses for a single individual or company.

Cannabis Licensing in Alaska

State Residency Requirement

Each business partner in an Alaska cannabis business must be a state resident eligible for a Permanent Fund Dividend. That means having lived in Alaska for at least one calendar year.

Premises Restrictions

State regulations require that all marijuana businesses must be at least 500 feet away from schools and churches. Towns may add additional restrictions, such as zoning ordinance. Towns may also require a conditional use permit. Businesses are also required to advertise their intentions for three weeks.

Application Process

1. Submit the application through the website of Alcohol & Marijuana Control Office (AMCO).
2. Give notice of the application to the public as outlined in 3 AAC 306.025.
3. Complete all the additional forms specific to the chosen license type.
4. Submit fingerprint cards for each person listed on the application.
5. Pay the application fee of $1,000 and the relevant license fee.
6. The AMCO director will review the application. If the application is deemed complete, it will be sent to the applicant’s local government who will have up to 60 days to protest the application.
7. If there is not protest from the local government, the complete application packet will be posted on AMCO’s website for a 30-day objection period as described under 3 AAC 306.065.
8. Within 90 days after the application is deemed complete, it will be considered by the board at the next Marijuana Control Board meeting.
9. If the application is approved, the applicant’s cannabis establishment premises will be inspected by the AMCO. There are also post approval instructions that have to be followed by applicants for a cultivation license, retail license or cannabis product manufacturing license.
10. Once inspections are complete, the license will be issued to the applicant.

Cannabis License Application

According to the 3 AAC 306, an application for a new cannabis license must include:

• The name of the applicant and the business name that the applicant will use for their proposed cannabis establishment.
• The name, mailing address, telephone number and social security number of each licensee.
• Applicable documents if the applicant is a business and not an individual.
• Type of license for which the applicant is applying.
• The address of the proposed location where the applicant intends to operate their cannabis establishment including its GPS coordinates and a detailed diagram of the premises.
• Documents showing that the applicant owns rights to the proposed site for their cannabis establishment.
• An operating plan.

Renewal of Licenses

The renewal application must include:

• The license number, license type, establishment name and premises address.
• The forms listed on AMCO’s website.
• A fingerprint card.
• Adequate proof of right to possess the licensed premises, if requested.
• Other information as outlined in 3 AAC 306 regulations.
• $600 license renewal application fee and the relevant license renewal fee.

Alaska Cannabis Market Stats and Projections

As of August 2024, the state had issued 702 recreational business licenses, and 459 of those companies were operational, according to the Alaska Alcohol and Marijuana Control Office (AMCO). Of the 459 operating businesses, there are 106 limited cultivators, 135 standard cultivators, 39 standard cannabis product manufacturing facilities, 18 cannabis concentrate manufacturing facilities, 159 cannabis retail stores and 2 cannabis testing facilities.

Alcohol & Marijuana Control Office’s data shows that total retail sales in Alaska hit $245 million in 2020, up nearly 40% from 2019 ($180 million), rising to $261 million in 2021 and $277 million in 2022, and around $265 million in 2023. The first half of 2024 brought in about $132 million and total retail sales from program inception to 06/30/24 are estimated at more than $1,480 million.

Alaska could become home to around 1,000 licensed cannabis businesses, according to regulator Cynthia Franklin, AMCO’s executive director.

Cannabis Delivery in Alaska

Delivering cannabis to consumers is not permitted under AS 17.38 or 3 AAC 306.

Cannabis Taxes in Alaska

Effective Jan. 1, 2019, sales and transfers of cannabis are subject to the following tax rates:

• mature bud/flower are taxed at $50 per ounce;
• immature or abnormal bud is taxed at $25 per ounce;
• trim is taxed at $15 per ounce; and
• clones are taxed at a flat rate of $1 per clone.

On September 21, 2022, Gov. Mike Dunleavy issued an administrative order which created a Governor’s Advisory Tax Force on Recreational Cannabis. They were tasked with review of the state’s cannabis tax regulations.

On May 10, 2024, the Alaska House of Representatives passed House Bill 119 which is a tax reform bill aiming to reduce the tax rate from $50 per ounce to a state-wide sales tax of 7%, as recommended by the Governor’s Advisory Tax Force on Recreational Cannabis. However, the bill died in committee.

Cannabis Advertising Regulation in Alaska

(A) Business cards and merchandise, including t-shirts, hats, and stickers, that are distributed by a licensed marijuana establishment and contain only the business name and logo, license name, and location and contact information, are not advertising or promotions.

(B) A licensed marijuana establishment may have not more than three signs that are visible to the general public from the public right-of-way. The size of each sign may not exceed 4,800 square inches.

(C) An advertisement for a licensed marijuana establishment and for a marijuana product must include the business name and license number.

(D) An advertisement for marijuana or any marijuana product must contain each of the following warnings, that must be plainly visible and at least half the font size of an advertisement on a sign, and no smaller than size nine font when the advertisement is in printed form; warnings in audio advertisements must be intelligible and played at the same speed as the advertisement: (1) “Marijuana has intoxicating effects and may be habit forming and addictive.”; (2) “Marijuana impairs concentration, coordination, and judgment. Do not operate a vehicle or machinery under its influence.”; (3) “There are health risks associated with consumption of marijuana.”’; (4) “For use only by adults twenty-one and older. Keep out of the reach of children.”; (5) “Marijuana should not be used by women who are pregnant or breast feeding.” An advertisement for a licensed marijuana establishment is exempt from providing the warning statement if (1) the advertisement contains only the business name, logo, business type, contact information, location, and hours of operation; and (2) the advertisement does not contain any written information about marijuana or a marijuana product or any photographic or illustrative depictions of marijuana or a marijuana product, other than depictions contained within the established business name font and logo.

(E) A licensed marijuana establishment that advertises by means of a web page must utilize appropriate measures to ensure that individuals visiting the web page are 21 years of age or older.

(F) As long as no more than 30 percent of the event’s participants and audience is reasonably expected to be under 21 years of age, a licensed marijuana establishment may sponsor an industry trade show, a charitable event, a sports event or competition, a concert or any other even approved in advance by the board.

(Source: 3 AAC 306.770. Signs, merchandise, advertisements, and promotions)

Alaska Cannabis Market Infographics

Alaska Hemp Industry