PROGRESS: Marijuana tax revenue expected to reach $400,000 in 2018

PALMER — The Mat-Su Borough collected $57,530 of tax revenue from Marijuana sales last fiscal year and $224,530 so far in 2018, according to Cheyenne Heindel, the borough’s finance director. She expects to see about $400,000 by the end of this fiscal year.

“It’s got potential,” Heindel said.

MSB collects a 5% tax from Marijuana sales. The tax revenue goes into the general fund much like a bed tax or cigarette and tobacco tax. It supports community development efforts like improving the ice rinks and pools across the Mat-Su Valley. The funds will likely become a steady source of income, increasing slowly over time. Green Jar dispensary co-owner said he fully supports the tax.

“It’s nice to have a chance to support community,” Saunders said.

Saunders owns Green Jar with his wife, Bailey Stewart and partner, Chris Farris. Green Jar sponsors the Valley’s non-profit derby team, the Boom Town Derby Dames. Stewart is on the team. Saunders said that Stewart and the tram actively volunteer in the community throughout the year, raising money for events like the Mat-Su Polar Plunge. He said the team is also a great source of strength and camaraderie for those women. In addition to that, Saunders said they the staff at Green Jar, Green Degree and Bad Gramm3r have all periodically picked up trash around town.

“We all agreed. At the very least, we should be cleaning up the community, picking up the trash,” Saunders said.

Heindel said they weren’t sure if the 2017 taxes would make it, so those funds are not reflected in the 2018 budget. For now, they plan to use it next year. She said this source of revenue may not be huge, but it does help, especially if it proves to be consistent source of income. The numbers won’t surge up but they will gradually pull in more, much like the bed tax.

“If bed tax is doing well that means tourism is doing well,” Heindel said.

Alaska’s cannabis industry is not like Colorado’s. People don’t come up here to buy it, but they may pick some up while they’re here. Heindel anticipates a modest increase during tourist season.

Like many other states, Alaska has collected a bed tax for many years. When anyone stays at a hotel, there’s an 8 percent tax for the room. The rising numbers of tourists have clearly helped bring the bed tax numbers up over the years. Heindel said back in 2011, it was collecting $950,000. Now, it collects 1.2 million dollars in a fiscal year. Seeing growth in any asset is a good sign she said.

“I think it’s a good measure of our economy. We are still seeing a growing economy in the borough,” Heindel said.

Most of the tax revenue on the borough comes from property taxes. These small but steady tax streams — like the marijuana tax and bed tax — can help for slightly reduced rates for property taxes, according to Heindel.

Another market is one step closer to opening up — industrial hemp. Sen. Shelley Hughes sponsored SB6, a bill to remove industrial hemp from the list of controlled substances. Saunders said this will help bring back CBD products.

“We were one of the stores that had CBD products taken away,” Saunders said.

He said that hemp can make anything that its petroleum counterpart can do — fibers, plastics, oils — and hemp its biodegradable.

The idea of selling hemp clothing isn’t off the table but Saunders said the focus will be bringing back CBD oils that meet the new regulations. The store can’t give any medical advice, but he said that he has heard countless customer testimonials about how the plant helped them. He’s heard a range of success stories from treating PTSD to seizures. He said that industrial hemp could end up bringing in additional revenue for the borough.

“Alaska could do with having another export the farmers could grow in the summer,” Saunders said.

Moving forward, he said this is the time where his company and the industry should be asking, ‘how we create a sustainable change?’