Alaska’s marijuana industry is enjoying a summer boom

But state revenue falls short of projections in FY17

Alaska’s legal marijuana market is going through a summer boom, with a record 547 pounds of cannabis flower sold by growers in June, according to new figures from the tax division of the Alaska Department of Revenue.


That generated more than half a million dollars to the state, again setting a record.

“It’s nice to see a new tax bringing in state revenue. That is exciting,” said Kelly Mazzei, excise tax supervisor for the state.

Despite the haul, the state failed to hit its target in the just-ended fiscal year. From October through June, the state collected $1.75 million in marijuana tax revenue.

That’s $250,000 below projections, and those projections had already been reduced twice. The slow pace of regulations (sales started almost four months later than expected) and limits on capital investment (only Alaskans can invest in Alaska marijuana businesses) meant the industry got off to a crawling, not sprinting, start.

Only 13 pounds of marijuana flower were sold by legal growers in October. That increased to 167 pounds in December, slid to 111 pounds in January and has steadily increased every month of 2017.

Under state rules, growers — not retailers — remit taxes to the state. In addition to the $50 per ounce tax on marijuana flower, they pay $15 per ounce on other plant parts purchased by product manufacturers.

The psychoactive cannabinoids in stems, leaves and other plant parts can be extracted and concentrated into edible products. The market for those plant parts has also surged, to 313 pounds in June.

State tax reports run one month behind the due date, so figures for July will be available on the first day of September.

Mazzei said even though the state missed its mark in fiscal year 2017 (which ended June 31), surging sales are a sign that won’t remain the case. Later this year, outdoor marijuana farmers on the Kenai Peninsula and near Fairbanks will begin reporting sales. When that happens, it’s possible that the state could briefly collect more than $1 million per month in revenue.

The state currently estimates that during fiscal year 2018, it will collect $10.6 million in taxes. To do so, it will need to average about $883,000 per month.

Mazzei, in her monthly report on marijuana tax collection, called that figure “very doable.”

By phone, she said Alaskans should be excited.

“I don’t like being broke any more than any other Alaska resident,” she said. “It’s nice to see money coming in.”

• Contact reporter James Brooks at or call 523-2258.



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