ALASKA TRENDS

Adrug notorious for making its users lazy and idle has been busy, busy, busy building a new industry in Alaska. In less than a decade since voters legalized recreational use of marijuana, cannabis has grown into the state’s most valuable cash crop. Per capita, Alaska has the most retail shops of any state where the drug is legal. Pretty impressive for a market that was entirely the domain of illicit dealers before 2016.

Alaska’s libertarian streak gets the credit for passing the legalization initiative in a politically conservative electorate, and that same tendency could also explain the proliferation of marijuana businesses. Cutting red tape and streamlining government regulation works for other industries, so cannabis benefits from the same light touch.

Which is not to say that cannabis isn’t strictly regulated. This month’s article “Cannabis Cool” explains how the air quality regulations alone require the support of HVAC engineers and installers, extending the ripples of the blazing industry to other economic sectors. Anyone willing to play by the rules—and navigate the financial complications of dealing in a federally banned substance—can claim a share of the marijuana profits.

This edition of Alaska Trends is a snapshot of marijuana today. How might that compare in a few years, after the industry has matured?

SOURCES: Alaska Alcohol & Marijuana Control Office: commerce.alaska.gov/web/amco/OtherMarijuanaResources.aspx Alaska Department of Revenue: tax.alaska.gov/programs/programs/reports/AnnualData.aspx?60000

OUNCES OF MARIJUANA TAXED OVER TIME BY PRODUCT

Year Immature/ Bud/Flower Failed Trim

Number of Clones 2020 343,271 125,345 289,319 8,381 2019 291,035 42,146 239,463 6,746 2018 11,263 0 8,840 0 2017 1,857 0 1,099 0

2017 2018

$91,900 OF REVENUE

was collected by the State of Alaska for distribution to 26 local governments in FY2022

257 APPROVED PRODUCTS

are registered with Alcohol & Marijuana Control Office for retail sales.

114 CONCENTRATES 114 EDIBLES 19 INHALABLES 8 TOPICALS 3 OILS & BUTTERS 94 | February 2022 Alaska Business

2019 2020

WHOLESALE PRICES

are based on the THC percentage present in indoor testing.

Wholesale Price of Cannabis Flower per pound 30% THC: $4,000 25% THC: $3,500 20% THC: $3,000 > 20% THC: > $3,000

Types of licensees 149 RETAIL STORES 131 STANDARD CULTIVATORS 112 LIMITED CULTIVATORS 37 PRODUCT MANUFACTURERS 12 CONCENTRATE MANUFACTURERS 4 TESTING FACILITIES

are paid by the marijuana cultivation facility in cash.

$50/OZ. MATURE BUD/FLOWER $25/OZ. IMMATURE/ABNORMAL BUD $15/OZ. TRIM $1/EACH CLONES

2017

2017 2018

2018 2019

2019 2020

2020

STATE TAX REVENUE & PENALTIES OVER TIME

Tax

Penalties 2020 $23,864,759 $348,537 2019 $18,807,335 $275,207 2018 $10,763,728 $37,629 2017 $1,748,642 $855

41 CITIES

with ActiveOperating Licenses

Payers of license fees per location 96 ANCHORAGE 61 WASILLA 60 FAIRBANKS 25 PALMER 20 JUNEAU 18 SOLDOTNA 17 HOUSTON 16 KENAI 14 KETCHIKAN 13 NORTH POLE 10 HOMER, SITKA, TALKEETNA 8 NIKISKI 7 KASILOF, WILLOW 6 BIG LAKE, SEWARD 5 STERLING 4 KODIAK, NOME 3 HAINES, SUTTON, VALDEZ 2 BETHEL, DILLINGHAM, KOTZEBUE, NINILCHIK, PETERSBURG, SKAGWAY, WRANGELL 1 ANCHOR POINT, BIRD CREEK, COOPER LANDING, CRAIG, DENALI NATIONAL PARK, GIRDWOOD, HEALY, MEADOW LAKES, NAUKATI, UTQIAGVIK