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State of marijuana: Where does state tax revenue from cannabis go?

According to the Alaska Department of Revenue, the state brought in $30 million in marijuana taxes in 2021. Here's a look at where that money goes.
Published: Mar. 10, 2022 at 5:20 PM AKST
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ANCHORAGE, Alaska (KTUU) - After school, while playing foosball, the story started to come out.

“How is your classmate who’s trying to be like your mortal enemy,” Matthew Chase, a counselor at the Boys & Girls Club of Alaska, asked the young boy in front of him.

It wasn’t going well.

“Oh, I’m so sorry,” Chase replied.

He then told his own story about growing up and being bullied and hating to go to school. It was a shared experience from an adult who wanted to make things better.

Experts say trusting adults and after-school programs are key to curbing marijuana use by teens, which is one reason marijuana tax revenue in Alaska is spent at places like the Alaska Boys & Girls Club.

Alaska brings in millions of dollars in marijuana taxes and the amount continues to go higher and higher.

According to the Alaska Department of Revenue, more than 3% percent of the taxes collected in Alaska came from marijuana in 2021. That’s more than $30 million for fiscal year 2021 alone.

When voters approved legalization it came with stipulations, like where those taxes should be spent: 25% goes to both the general fund, 25% to drug and marijuana education programs and 50% is for recidivism reduction programs.

Including penalties and interest, Alaska collected $10.8 million in marijuana tax revenue in FY 2018. Jump to FY 2020, and it was $24.2 million.

So, where does the money go?

For fiscal year 2022, $11.5 million was designated for the Alaska Department of Corrections, $18.2 million for the Alaska Department of Health and Social Services and $2 million to the Alaska Department of Public Safety, according to the Alcohol & Marijuana Control Office.

The Department of Public Safety receives $2 million each year from the Recidivism Reduction Fund, which is funded by tax revenue from commercial marijuana sales, according to Alaska State Troopers spokesperson Austin McDaniel.

“All of the funds that the Department of Public Safety receives are for the Council on Domestic Violence and Sexual Assault,” McDaniel wrote in an email. “CDVSA works with other Alaska organizations to leverage this designated funding for various efforts to reduce Alaska’s high rates of Domestic Violence.”

The Department of Corrections uses the money for a community residential center, physical health care, substance and sex abuse programs and education.

“These amounts are in millions of dollars, with the total of $11,546,000,” Betsy Holley, with the corrections department, wrote in an email.

The general fund as well as drug treatment and marijuana education programs are both supposed to get 25% and recidivism reduction programs are supposed to get 50%, but just because the money is designated for certain purposes doesn’t mean it has to be allocated there by the Alaska Legislature.

For instance, Eliza Muse, a public health specialist who works in the Division of Public Health, says her budget hasn’t changed since 2018. Her work is part of the Marijuana and Education Treatment Fund to educate users on responsible marijuana use. The money also goes toward treatment and after-school programs for teens.

“Our budget has remained flat,” Muse said.

Asked if more money was needed, Muse said she thinks there’s always work the division can be doing.

“We’re about three or four years into having this fund and I think we’re doing some really incredible work, but there’s always more work to do,” she said. “I would say especially with after-school programs.”

Programs like the Boys & Girls Club use the money for after-school programs.

“We want our kids to be best equipped to lead an amazing and healthy life, and one of the big things for us is being able to prepare them for better futures, and how can our impact provide that for them,” said Matthew Chase, the athletics coordinator at Boys & Girls Club.

Muse says that one in five Alaska youth have tried, or still use, cannabis products.

“We know 22% of youth across the board have used a cannabis product and are current users,” Muse said.

According to a Marijuana Prevention and Alaskan Youth Data Summary, put together by the state health department’s Office of Substance Misuse and Addiction Prevention, since legalization there have not been changes in the prevalence of marijuana use among youth in Alaska, and it’s similar to prevalence among youth nationwide.

Muse said she would have to show a “great need” to ask for more funding and she added that after-school care leads to less cannabis use.

Chase says his approach doesn’t focus on a “just say no” policy. Instead, it’s more about how marijuana impacts a developing brain.

“The kids are our future, and you know what, like, if I can spend my life being able to help them have an awesome life, and be able to have a lot of the resources that I didn’t have as a kid, which is so true already ... it’s perfect,” Chase said. “It’s a dream come true to be able to be there for them.”

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