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The marijuana industry and taxes

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To the editor: I am troubled by the headlined story in the paper on April 1 concerning non-payment of marijuana excise taxes. The title of the article, “Lots of cannabis cultivators owe state millions in taxes,” is not only misleading, it is not true.

The article’s title implies that there are many cultivators withholding millions in revenue from the state. If fact on the Division of Revenue’s website reveals the amount owed by 43 cultivators together in back taxes is just over 2 million in total. In fact, Alaska has collected over $73 million dollars in taxes since cannabis has been legalized. Only 2.7% of taxes have not been paid. Of the $2 million owed, 35% of that is by just one business and that business does not owe “millions” as the article’s title implies.

This kind of sensationalism feeds a perception that our legitimate and legal industry is full of low-life criminals trying to skirt the system. In fact, this industry is filled with hard working people trying to make a living all the while providing new jobs and keeping money within their communities.

I am glad that the News-Miner included in the article the fact that the tax structure, imposed solely on cultivators, is problematic. Alaska is the only state that imposes a flat tax on weight rather than as a percentage of cost. As was pointed out in the article, this “flat tax [has] created an immobile price floor.” In the five years my business has been in operation, we have paid anywhere from 25% to 45% of gross profits on state excise taxes. This is not a complaint, but I point this out to illustrate that we and the vast majority of the other cannabis businesses in the state are not making “millions” while avoiding taxes and that the state is getting a fair share of revenues. I would venture that those unable to keep current on taxes are probably undergoing hardships that might also afflict many other small businesses during this pandemic.

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