Alaska is revising how it taxes cannabis to address concerns raised by local MJ industry executives, a move that will make distinctions between different types of bud.
The current excise tax per wholesale ounce of cannabis bud or flower is $50 in Alaska, according to the Marijuana Business Factbook 2018.
That rate – equivalent to $800 a pound – is decimating profit margins and boosting black-market activity, Alaska’s licensed cultivators have argued.
A second tax tier, $15 per wholesale ounce, is levied on what’s commonly called trim.
New rules, set to take effect Jan. 1, make distinctions between different types of cannabis.
So-called mature flower would be taxed at $50 an ounce, while immature or abnormal flower would be taxed at $25 an ounce. The tax rate for the rest of the plant would be unchanged.
Cultivators would continue paying the tax, imposed when marijuana is sold or transferred from a grow facility to a retail store or product manufacturing facility.
In June, the Alaska Tax Division considered changes to the tax structure. At the time, the division’s director, Ken Alper, emphasized the need for caution regarding language used to define parts of the plant that would fall into a new tier.
Some in the industry have sought a more extensive tax overhaul. That would require legislative action.
– Associated Press and Marijuana Business Daily