Several Alaska marijuana cultivators close shop according to tax data

(KTUU)
Published: Jan. 15, 2019 at 5:25 PM AKST
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Newly released marijuana tax data shows marijuana excise tax payments were lower in November than previous months, and several cultivators have closed shop.

The number of taxpaying cultivators in Alaska had been steadily growing over the past couple of years, a trend that began slipping in November 2018 when the number of cultivators fell by seven, at least partially a result of expired or surrendered licenses, according to the Dept. of Revenue Tax Division.

The percentage of marijuana excise tax payments made in cash fell from an average of 78 percent down to 71 percent in November — the lowest number paid in cash since May 2017.

Executive Director of the Alaska Marijuana Industry Association Cary Carrigan says some businesses in the industry are still working the kinks out, and facing challenges like relying strictly on cash to operate, as well as dealing with supply and demand curves as tourism lulls and booms in Alaska.

"I think this is just a part of normal growth of any industry. It doesn't need to be cannabis, it could be anything, and we're still going to see some fall off," Carrigan said. "We're still going to see some businesses fail, but still all in all, the industry is healthy and we're still contributing large amounts in taxes to the State of Alaska."

Kim Kole owns Raspberry Roots in Midtown, which both cultivates and retails marijuana — a dual business model that she says has worked for her business.

"That is the safest way to go into the industry is to have your cultivation, and your retail, and if you can, have all three licenses because that allows you the flexibility," Kole said. "Your cultivation may not make as much money one month, but your retail makes up for it, so you have that buffer. You also have better margins because you're not selling to somebody else, you're selling to yourself."