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Wednesday, October 5, 2022

After half a decade of legal work in Alaska, what’s working and what needs to change?

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Five years ago in October, Alaska recorded First commercial sale of marijuanaAnd there was a new industry officially underway – with licenses, regulations, and taxes. Half a decade later, marijuana in Alaska looks like many emerging industries: some success stories, some rude awakenings, some growing pains for workers. It’s a good time for our state to take stock of what works well and what doesn’t when it comes to Alaskan marijuana laws.

First, the good: the horror scenarios imagined by opponents of rationing did not materialize – far from it. There have been no marijuana-related crimes, no significant impacts on underage Alaskans, and no pest to neighborhoods where commercial dispensaries and growth operations are located. This is partly because those concerns have been amplified during the hype around a controversial legalization campaign; Part of the credit also goes to lawmakers and the Alaska Marijuana Control Board for crafting rationale regulations related to the industry. Alaska now has a whole host of laws governing marijuana operations, regulating everything from advertising to store locations to potency testing and health standards. For the most part, these laws worked well, and policy adjustments were applied as needed – regarding on-site depreciation potential, for example.

Ironically, revenue from marijuana taxes gave the state one of the only new revenue streams in recent memory. Although marijuana was worth $24.2 million, Contribute to the state coffers The past year certainly won’t fix Alaska’s budget problems, nor does it hurt for a new industry to push its way. Perhaps the best indicator of how legalization will happen is what’s happening elsewhere: Since Alaska and Oregon joined Washington and Colorado in 2014 as the first four states to fully legalize recreational marijuana use, more than a dozen Other countries have followed our lead. The introduction of this new industry gave birth to a whole generation of new entrepreneurs, willing to risk time and capital to build their own business. Encouraging people to make something out of nothing is good for our economy in general and goes well with the ethos of life at the bottom.

However, this does not mean that it has been an entirely smooth path for entrepreneurs in the industry. Alaska is well aware of the gold rush mentality, and the influx of new companies into this space has led to stiff competition, lower profit margins, and exposed some issues with the way our state decided to regulate its marijuana business. In response, players in the industry are talking about the need to change some of our marijuana laws to help level the playing field — or, to a lesser extent, benevolent, to protect their own financial interests.

Some of the changes brought by commercial marijuana license holders they ask More logical than the others. Introducing a cap on licenses, for example, has no place here: as we have seen in the bar industry, introducing industrial restrictions on licenses stifles innovation, rewards existing players, and sets high barriers to entry that allow only the wealthy to participate in the industry. Our current licensing system can get messy, because it does not have a safety net for licensing as a valuable asset that a business owner can sell to recover revenue. But this is what the free market is supposed to do: reward those who fill needs and adapt better to changing conditions, and send an alarm bell to those who are ill-equipped as entrepreneurs.

When it comes to taxes, on the other hand, complaints from marijuana companies have some advantages. Alaska has a simple, even simplified tax structure for marijuana ($800 per pound for cannabis buds, $240 per pound for “chopping” — the leaves and other parts of the plant used for eating) that does not take into account potency. Since potency is the single most important factor in marijuana price and consumer demand, the flat tax structure gives growers a perverse incentive to waste medium potency buds by destroying them rather than paying the tax. It also creates an “arms race” where farmers are rewarded for growing strains with increased effectiveness, which in turn increases tolerance for marijuana users. It serves no one well – neither farmers, nor customers, nor the state.

When the legislature begins session next January, members will have their hands full on issues such as the budget and the long-term financial solution to Alaska’s revenue problems. But lawmakers should also take the time to make adjustments to our marijuana laws — by and large, the system works well, but five years’ experience with a legal market has shown we can make some improvements.



Grow guide for marijuana beginners.

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