On September 14, the House Commerce Committee will take invited testimony on House Bill 119, which proposes to change the tax structure on marijuana. Currently, Alaska has an $800 per pound excise tax levied by the state — the highest in the country — but proponents of HB 119 say it should be changed to a sales tax collected by retailers.

The excise tax on weight was set after 2014 when the legalization of commercial cannabis production and sales was approved by voters. Commercial pot sales and cultivation started after 2016. But since then, the price of marijuana has dropped significantly in Alaska due to increased competition, making the $800 excise tax a heavy burden in an industry that is having a hard time due to intense competition.

Some in the cannabis business were formerly in the black market, and some who have left the legal cannabis business due to competition driving down prices have probably returned to the black market, where they may find it more profitable without all the regulation and taxes of running a legal business.

In Anchorage alone, the competition among retailers is so intense some are severely behind on their state tax payments. Because Alaska has no cap on the number of licenses it grants to grow or retail cannabis operations, the excise tax eats into already slim margins.

Read more at mustreadalaska.com