Alaska Cannabis Business Licenses
WHAT IS ALASKA'S CURRENT CANNABIS MARKET STATUS
Content Below Last Updated by Point7 3/28/22
Alaska legalized recreational cannabis in 2014 when 53.2% of voters approved Measure 2 on the ballot. The initiative went into effect on February 24, 2015 allowing Alaskans to possess up to an ounce of cannabis and have a home grow of no more than 6 plants. Tax revenue indicates that the cannabis market in Alaska has consistently grown each year with a 30% increase from 2018 to 2019 in the amount of cannabis sold.
Alaska’s cannabis market has excelled despite facing geographical and taxation challenges. Wholesale prices were initially high due to products having to be transported by plane and the tax burden of $800 per pound of flower imposed on cultivators. As more companies broaden operations to include dispensaries, transportation costs are decreasing and cultivators are receiving a tax break by selling their cannabis through their own dispensary rather than directly to an unaffiliated organization. These changes have allowed a small drop in wholesale prices which currently range from $2,600 for outdoor grown products to $4,000 for indoor products with a 30% or higher THC percentage. Although these prices are still high compared to other mature cannabis markets like Colorado, the prices will continue to drop through 2022.
Following the approval of Measure 2 in December 2018, the Alaska Marijuana Control Board adopted a statewide rule authorizing and regulating on-site consumption. In 2019, indoor consumption sites were available to consumers until 2020 when the COVID-19 pandemic closed down all consumption lounges. Now in 2022, business owners are slowly reopening their spaces for Alaskans to consume cannabis indoors. To become an indoor consumption lounge, business owners must follow extra regulations regarding odor control along with specific consumption amounts and must also pay a $3,000.00 fee for the license and endorsement.
WHAT ARE ALASKA'S CANNABIS LAWS?
Similar to Colorado’s laws, Alaska allows adults 21 and older to purchase and possess up to one ounce or 28 grams of cannabis. Recreational adults users are also permitted to grow up 6 plants within the privacy of their home as long as only three are in the flowering stage at any given time. While no consumption lounges have yet to open in Alaska, on January 23 2020 the Alaska Marijuana Control Board approved the states two businesses that will hold permits to conduct one-site consumption. A full text of Alaska’s regulations set in place by the Marijuana Control Board can be found here.
Although it is illegal to use cannabis or cannabis products in public, recent legislation has legalized the use of consumption lounges. These indoor consumption spaces are a safe place for consumers to purchase and use cannabis products in a regulated space. To be a licensed consumption lounge, business owners must get a license and endorsement by the state, notifying the state that the cannabis business follows all the additional regulations and key provisions such as: purchaser limits; allowable consumption areas; odor control; and additional sales restrictions. Some important regulations to note is that cannabis may be purchased or consumed in these designated areas, but may only contain 10mg of THC for edible products and one gram of cannabis flower. Concentrates and beverages are not allowed to be consumed in these spaces.
WHAT IS ALASKA'S CANNABIS LICENSING TIMELINE & CANNABIS APPLICATION PROCESS?
Alaska accepts applications for a cannabis business on a rolling basis and has no limit on the amount licenses the state can award although local municipalities may enforce a limit on how many facilities it allows. To begin the application process create a login for an account with the state of Alaska here..
WHAT IS THE HISTORY OF CANNABIS IN ALASKA?
Alaska has had a complicated history with cannabis that has seesawed between decriminalization and reinstating criminalization for the past 50 years. Cannabis was first legalized in Alaska by the court ruling Ravin v. State in 1975, making Alaska the second state in the United States to decriminalize cannabis. In 1982 following the Ravin decision, the state legislature decriminalized possession of up to four ounces of cannabis in the home, or up to one ounce (28 grams) outside the home. However, decriminalization was short lived and came to an end in 1990 when cannabis was criminalized once again with strict penalties imposed of up to 90 days in jail and a $1000 fine for the possession of any amount.
In 1998, Cannabis was legalized for the use of medical purposes for patients who received a doctor's recommendation to utilize the plant. Patients could possess up to an ounce of cannabis and grow 6 plants in a secured space within their homes, but In 2006 cannabis was once again criminalized making possession under one ounce a misdemeanor punishable by up to 90 days in jail, possession charges for amounts between one and four ounces were punishable by up to one full year in jail, and the possession of amounts higher than four ounces were charged as a felony.
Finally in 2014, the recreational use of cannabis Measure 2 passed with 53.2% of the vote, making Alaska the third state to legalize the recreational use and sale of cannabis, preceded by Colorado and Washington in 2012. Effective on February 25, 2015, the passed Measure 2 allows the sale of cannabis at state-licensed dispensaries and once again currently allows adults 21 and over to possess up to an ounce of cannabis and cultivate six plants in their own home.
DOES ALASKA HAVE A HEMP PROGRAM?
Effective April 4, 2020 the Industrial Hemp Regulations (11 AAC Chapter 40) authorized the Alaska Department of Natural Resources (DNR) to create an Industrial Hemp Pilot Program to research the growth, cultivation, and marketing of industrial hemp. Currently, businesses may obtain an industrial hemp registration from the DNR to participate in the Alaska Industrial Hemp Pilot Program as either one or any combination of the following classes of registrations: industrial hemp grower; industrial hemp processor; and/or industrial hemp retailer.
PREPARING FOR THE ALASKA CANNABIS MARKET
We are ready to support your team as you prepare for cannabis licensure in Alaska. Contact Point7 to discuss the fully customizable products and service packages available that have proved successful for operators around the country.