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. The Ravin vs. State ruling allowed up to 4 ounces and 24 non-commercial plants in the privacy of the home. In November 2014, the production, sale and distribution of recreational cannabis was legalized which took effect on February 24th 2015.
- February 21, 2016: Cannabis industry regulations enter into effect.
- February 24, 2016: Cannabis business applications available.
- March 16, 2016: Earliest date an application initiated on February 24 could be deemed complete. Cultivation and testing facility licenses may begin to be forwarded to local governments.
- April 27, 2016: Marijuana Control Board will discuss date for deeming retail store and product manufacturing facility applications complete.
- May 23, 2016: Implementation of Marijuana Inventory Tracking System.
- June 9, 2016: Earliest approval for cultivation and testing licenses.
- September 2016: Earliest approval for retail store and product manufacturing facility 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 may not hold other cannabis business licenses.
Licenses will be 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.
State residency requirement
Each business partner in an Alaska marijuana business must be a state resident eligible for a Permanent Fund Dividend. That means having lived in Alaska for at least one calendar year.
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.
Information regarding each license is highlighted below:
Retail cannabis store license:
- Allows for a licensee to sell cannabis obtained from a licensed cannabis cultivation facility to qualified individuals (21 years and older)
- Allows for a licensee to sell cannabis products obtained from a licensed cannabis product manufacturing facility to qualified individuals (21 years and older)
- Permit consumption of cannabis or cannabis products in a designated area on the licensed premises, upon approval of the board
- $5,000 application fee
Cannabis cultivation facility license:
- Allows for a licensee to sell cannabis to a licensed retail cannabis store, to a licensed cannabis product manufacturing facility or to another licensed cannabis cultivation facility
- May also apply for a cannabis product manufacturing facility license and retail cannabis store license.
- A cannabis cultivation facility that obtains additional cannabis establishment license(s) are allowed for a vertically integrated model
- $5,000 application fee
Cannabis product manufacturing facility license: Two different types of licenses available.
Standard cannabis product manufacturing facility license
- Purchase cannabis from a licensed cannabis cultivation facility or from another licensed cannabis product manufacturing facility
- Manufacture, refine, process, cook cannabis products such as cannabis concentrate, edible products, ointments, tinctures and more
- Allows to sell cannabis extract and/or cannabis products to licensed retail cannabis stores or other licensed cannabis product manufacturing facilities
- $5,000 application fee
Cannabis concentrate manufacturing facility license
- Manufacture, refine, process and cook only cannabis concentrate
- Sell only cannabis concentrate to a licensed retail cannabis store or other licensed cannabis concentrate manufacturing facilities
- $1,000 application fee
Alaska Cannabis Industry Projections
As of April 2018, the state had issued 245 rec business licenses, and 201 of those companies were operational, according to the Alaska Alcohol and Marijuana Control Office (AMCO). Of the 201 operating businesses, there are 154 growers, 70 retail stores, 4 testing labs, 14 concentrates and product manufacturing producers.
Alaska could become home to around 1,000 licensed cannabis businesses, according to regulator Cynthia Franklin, AMCO’s executive director.
Tax collections began after the state’s first retail store opened on Oct. 29, 2016, and tax revenue has increased from $10,400 in the first month to over $500,000 in June 2017.
Alaska’s rec market is expected to hit between $25 million and $50 million in sales in the first 12 months after rec stores open, according to estimates in the Marijuana Business Factbook 2016. From Oct. 29, when the first store opened, to Dec. 6, total cannabis retail sales were $750,581.
Cannabis Prices in Alaska
According to several business owners in the state, prices for a wholesale pound of cannabis flower in the Last Frontier range from $2,800 to $5,000 a pound. That’s down from a year ago, when some cultivators were asking as much as $6,000 a pound.
Wholesale, cannabis concentrates – $70 to $90 a gram.
Retail prices – up to $9,000 and $11,300 a pound.
For a consumer, 1 gram of bud or flower generally costs $20-$25. For an eighth of an ounce (3.5 grams), overall prices generally range from $60-$88.
Cannabis Taxes in Alaska
Ballot measure 2, the act to tax and regulate the production, sale, and use of cannabis, was passed on November 4, 2014. Pursuant to the ballot measure, Alaska will levy a tax on the cannabis sold in Alaska. The division will collect the cannabis tax from licensed cannabis cultivation facilities.
The cannabis tax is imposed when cannabis is sold or transferred from a cannabis cultivation facility to a retail cannabis store or cannabis product manufacturing facility. The tax is $50 per ounce of bud ($800 per pound) and other parts of the plant, like the stems and leaves, are taxed at $15 per ounce.