Alaska Calls to Change Cannabis Taxes, Lawmakers Are Slow to Answer

ANCHORAGE – Alaska taxes legal Cannabis at one of the highest rates in the country. Since legalization in 2015, the state has collected an excise tax on every ounce cultivators sell to retailers – a fixed, weight-based levy that does not track with market prices. Growers pay $50 per ounce on mature, premium buds, $25 on immature buds, and $15 on trim, and the bill comes due regardless of what the product fetches.

Alaska is one of only five states that levy a Cannabis tax through a weight-based model.
Most states tax by sale price or potency.

The toll on the regulated industry has been accumulating. The number of licensed growers fell nearly a quarter between 2023 and 2025. At year-end 2025, 69 licensed cultivators had past-due taxes, collectively owing more than $5.5 million to the state Department of Revenue. While the amount of premium buds sold by Alaska growers to retailers declined by more than 70% from 2020 to 2025, the amount of trim more than doubled. This shift industry leaders attribute to growers reclassifying product to reduce their tax tier.

Tax receipts have followed the same direction. In 2022, the Cannabis industry brought in nearly $29.6 million in tax revenue for the state. In 2025, the state made a little more than $25.3 million off Cannabis taxes. That decline pulls down funding for corrections recidivism programs, a Cannabis education and treatment fund, and the general fund – all statutory recipients of Cannabis revenue.

Two reform proposals entered the 2026 session. Fairbanks Democratic Rep. Ashley Carrick’s House Bill 91 would cut the per-ounce excise to $12.50 and then phase in a 6% retail sales tax, following recommendations from a recreational Cannabis task force appointed by Gov. Mike Dunleavy, which convened in 2022. Anchorage Democratic Sen. Matt Claman’s Senate Bill 73 proposed standardizing the tax at a flat $12 per ounce, without a sales tax component. Both stalled. HB 91’s last recorded status was the House Rules Committee, as of April 8, 2026.

The Department of Revenue projected that HB 91 would result in a total revenue reduction of $4.04 million in FY2027, with losses continuing in subsequent years – a figure that gave legislators pause. Broader budget pressures absorbed the rest of the chamber’s attention. Rep. Andy Josephson described the last legislative session as “exhausting,” noting that education funding, the gas line, and rural health priorities crowded out the Cannabis debate. The industry itself remained divided. Operators in cities like Anchorage, where local Cannabis levies already apply, warned that stacking a state sales tax on top could push buyers further toward the unregulated market.

That concern has a concrete reference point. Legal Cannabis in Alaska typically retails for between $180 and $400 per ounce, while black market alternatives can cost between $100 and $150 per ounce. Rep. Carrick plans to reintroduce HB 91 in the next legislative session.

The core problem here is structural, not political. A flat per-ounce tax calibrated for a nascent market in 2014 is now pressing against a mature, price-competitive industry where wholesale prices have dropped and operating costs have not. The illicit market undercuts legal retail by as much as half. Tax reform alone will not close that gap entirely, but without it, licensed cultivators face a fixed obligation they cannot absorb indefinitely.