A new tax rate will begin Jan.1, 2019 and will cut the rate for an ounce of malformed or seedy marijuana by half.
According to the Alaska Department of Revenue and the Alaska Alcohol and Marijuana Control Office, the taxes paid wholesale at the time of purchase from the grower or retailer will change depending on the condition of the marijuana bud. One ounce of malformed, seedy, or immature bud will be taxed at $25, while mature flowers will be $50 and other plant parts will remain taxed at $15.
The abnormal bud is not attractive to buyers who plan to smoke their bud, but the product is still viable for those who create concentrates or use the marijuana in edibles.
The tax rate may change again in the future, since the Alaska Marijuana Control Board already approved a resolution in 2018 to consider taxing on a percentage basis, rather than a flat ounce rate.
Current marijuana tax revenue rates have led to a $1.48 million collection in September 2018, according to figures released by the state Revenue Department on Nov. 1.
August had the highest collection rate for the year, as $1.54 million was accumulated. Meanwhile, one month of the year saw a collection of less than $1 million.
The current setup of cultivators paying the tax will remain in effect, although marijuana growers and advocates in the state hope to see that change in the future as well. However, the point in the process where taxation occurs will require legislative action to change from its current setup to a new process.
The tax rate change became an issue when the profit margins were so low that black market activity was on the rise, all because the tax rate led to a taxation of roughly $800 a pound for Alaska marijuana growers. The effort to reduce black market activity and retain revenue for the state led to the decrease. Further changes may be made as necessary.
Alaska legalized recreational marijuana use in 2014 with Measure 2; allowing adults age 21 and older to possess up to an ounce of marijuana without penalty. Alaska was the third state to legalize recreational use.
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