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Question: What happens to the tax revenue from the sale of marijuana in Alaska?
When Alaska residents voted to legalize marijuana sales in 2014, they also voted for taxation. And we get to where this money goes (spoiler: it’s being used in a couple of government agencies for a variety of programs), but first let’s look at a few underlying questions, such as: B. where all the money comes from and who pays it.
Alaska taxes marijuana growers who sell the raw product to stores such as retail stores and edible manufacturers.
And different strains of marijuana are taxed differently, said Lacy Wilcox, president of the Alaska Marijuana Industry Association.
That equates to a tax of $ 50 per ounce of bud per flower, which is the highest quality of the plant.
Immature or fancy buds that result from a poor harvest or that cannot be sold as a bud or flower and that can be used for another product are taxed at $ 25 per ounce.
There’s also a $ 15 an ounce tax on trim that goes into things like vape pens or edibles, Wilcox said.
Clones are also taxed at $ 1 per plant.
The “taxable moment,” Wilcox said, is when marijuana products leave the farmer. Let’s say Wilcox said a farmer grows a pound of grass and sells it to a pharmacy. If the farmer initiates the transfer to the store, the farmer owes the Treasury Department $ 800, or $ 50 an ounce.
That’s the state tax, but there are also local taxes, like one in Anchorage, which is 5% at the retail level. That money goes to the general council fund, said congregation member John Weddleton.
According to the Ministry of Finance, farmers have to pay the tax on a monthly basis. Most tax payments are made in Cash at a post box in Anchorage. It’s in a parking garage downtown and you’ll need a key to access it, according to the tax office.
Overall, Alaska collects millions of dollars in marijuana taxes each year. And that number has increased a lot since legalization.
In fiscal 2018, the state collected about $ 10.8 million in marijuana taxes (including fines and interest), while Alaska collected about $ 19.1 million the following year, and by fiscal 2020, the state reported about Raised $ 24.2 million the Treasury Annual report.
The state also participated in a Recent study about increasing marijuana sales along with Oregon, Washington and Colorado during the pandemic, said Eliza Muse, who works in the public health department.
“We saw really steep increases in all four states,” said Muse.
She said it’s not exactly clear what’s behind the surge, whether people are stocking up or stressed out, or because the state has eased access and allowed people to buy marijuana products on the roadside and online.
By and large, the state marijuana tax revenue is divided into several parts: 25% goes to state funding; 50% go to government relapse reduction programs; another 25% go to drug treatment and marijuana education programs.
The 25% that goes into the general fund can be used by the Alaska Legislature as it sees fit, said Kelly Cunningham, operating budget coordinator for the Legislative Finance Department.
The other blocks are dedicated to programs that cover the whole gamut to keep children away from heavy drug use to offenders who prevent re-incarceration.
But there is a catch: just because funds are intended for these purposes doesn’t mean they have to be allocated there too. Legislators could theoretically use the money for anything, said Cunningham.
In recent years, however, the funds have helped pay for programs run by the Ministry of Health and Welfare, the Department of Justice and the Ministry of Public Security.
For fiscal 2022, that meant roughly $ 11.5 million went to the Department of Justice, $ 18.2 million to the Department of Health and Welfare, and $ 2 million to the Department of Public Safety, Cunningham said.
One of the tax-funded programs includes case managers who work with probation officers approximately six months before release from a correctional facility. They’re developing a plan for when that person will leave, which could include help with things like eating, substance abuse treatment, and employment, said Crystal Smith, of the state’s Behavioral Health Department.
“Then when they get out, this case manager will help them connect to these different services,” she said.
The intent, Smith said, is to keep people from relapse and give people a path to a different lifestyle.
The state also set up the Marijuana and Education Treatment Fund, which goes into the other 25% of marijuana tax revenue, said Muse, who runs the fund along with the state’s public health department.
The goal of this work is to help Alaskan understand what legal marijuana means, which can take many forms, she said. The state worked with marijuana retailers to develop topics of conversation about responsible marijuana use, such as “start little, go slow” in relation to consuming edible products, Muse said.
“I think retailers want healthy, happy customers, and they don’t want bad experiences either,” Muse said. “And in the area of public health, too, we want to ensure that people are safe and healthy.”
A portion of the funding in the 25% for treatment and education also goes to after-school programs for middle school students, where staff are trained to speak honestly with students about marijuana and “life after legalization,” Muse said.
At the correctional facility, the funds will be used for a variety of projects, such as GED or English classes or anger management therapy while people are incarcerated, said Laura Brooks of the state’s Department of Health and Rehabilitation Services.
“The resources available really are the full spectrum,” said Brooks.
The money also covers certain aspects of health care for incarcerated persons, primarily related to medical problems related to drug use. About 80% of the state’s population with corrections has substance use disorder, Brooks said, so the funds can help with everything from dental care to medical detox.
The money from the tax revenue also went to a sex offender program, a domestic violence program, vocational training programs and community housing centers, according to Betsy Holley, spokeswoman for the correctional department.
After all, the State Department of Public Security receives $ 2 million annually from tax revenue that goes to the Domestic Violence and Sexual Assault Council, according to spokesman Austin McDaniel.