Marijuana tax reform bill passes the Alaska House of Representatives and heads to the Senate for consideration

The Alaska Legislature is poised to make a significant change to the state's recreational marijuana law, which voters legalized in 2014. The Alaska House of Representatives has voted to replace the current $50 per ounce marijuana tax with a 7% sales tax. If approved by the Senate and Gov. Mike Dunleavy, it would be Alaska's first statewide sales tax.

The change was recommended by the state's Recreational Marijuana Working Group, which Dunleavy convened in 2022 to review the industry and identify opportunities for improvement.

Alaska House of Representatives approves marijuana tax reform bill

The current tax structure has been criticized by the marijuana industry for being too high and making it difficult to compete with the black market. The task force originally recommended a 3% sales tax, but that was increased to 7% during the legislative process.

Although the industry would have liked a lower tax rate, they still support the bill, which includes other recommendations from the task force, such as asset tracking and licensing changes.

The passage of the bill in the House of Representatives is seen as a significant step forward for the industry, which has struggled to compete with the black market. The high tax rate has made it difficult for licensed businesses to operate profitably and many have been forced to close. The new tax structure is intended to help level the playing field and allow licensed businesses to thrive.

The bill will now move to the Senate for consideration, where further debate and discussion is expected to take place. If approved, the new tax structure would take effect in 2024 and would be a significant step forward for the state's recreational marijuana industry.

Anna Harden

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