Alaska Estimates $5M-$19M Tax Haul From Recreational Cannabis

A report by the Alaska Department of Revenue estimates that the state will collect anywhere between $5 million and $19 million in taxes from recreational cannabis sales to locals, indicating the huge amount of uncertainty over the potential size of the market.

The state did not provide a revenue projection, though the report estimates annual consumption among residents will range from 102,000 ounces to 384,000 ounces, according to the Alaska Dispatch News.

Based on the state’s figures and average cannabis prices in other rec markets, sales could come in between $15 million and more than $75 million.

There are two big caveats, however: The estimates do not include sales to tourists – which could make up a big slice of the market – and the state calls its projections “highly uncertain.”

The 2015 Marijuana Business Factbook offers a more conservative estimate, predicting that sales will total between $20 million and $30 million (including revenue generated from tourists) in the first full year that stores are open.

The state will levy a $50 tax per ounce of recreational cannabis sold, and there will likely be local taxes assessed as well.

Regardless of the exact sales and tax figures, Alaska’s market will be much smaller than other states that have legalized recreational cannabis, in part due to its low population and geographic isolation.

Colorado, for instance, sold 2.4 million ounces of recreational and medical cannabis in 2014, with sales hitting $700 million.

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