The cannabis industry in the Matanuska-Susitna Borough has grown substantially since retail sales officially started in 2017. There’s now a spectrum of cultivators growing for eight dispensaries across the Valley and they contribute to Valley’s overall economy in a variety of ways, from job opportunities to tax revenue.
All legal cannabis sales must pay a five percent tax. The borough has collected a total of $1,034,050 since they started taxing cannabis sales, according to Cheyenne Heindel, the borough’s finance director. She said that all the marijuana sale taxes go directly into the general fund, which is used each year in a variety of ways.
“It’s part of the pot that funds the general government,” Heindel said. “It provides for all the services that we have municipal powers for.”
Heindel explained that the general fund goes towards area-wide services like education, emergency service, building maintenance, and general government operations. She said that the general fund helped pay for the new schools across the Valley amongst other things and the area wide funds also go towards the school district’s overall budget. She said that the borough provided $58 million to the district’s 2019 fiscal year.
The marijuana sales tax is one of forces that fuel the general fund, according to Heindel. She said the other three are: the bed tax, tobacco tax and property tax. She said that having a more diverse tax structure keeps the property taxes down.
“Otherwise, everything would be paid for by property taxes,” Heindel said.
Green Jar CFO Chris Farris said that he thinks the five percent tax is fair and the funds help support the community as a whole.
“I think that the local community is the best place for the tax revenue to go because it is more likely to directly benefit the community and the tax payers than say the state or federal level,” Farris stated via email.
Farris said that the overall economic impact of adding legal cannabis sales to the Valley is “huge.” He said that the $600,000 to $700,000 collected by the borough each year is sure to increase over time since the industry is still growing rapidly.
“Even more than that, all of the cannabis businesses in the borough are injecting money into the community. The money that is brought in from selling cannabis is going right back into our local economy. We are creating jobs, paying people livable wages and supporting other small businesses in the borough,” Farris stated.
Teri Zell and her husband Peter own Bad Gramm3r off Bogard Road. She said that she fully supports the marijuana sales tax and the notion of paying back into the community but she would like to see the Borough “cornhole” the tax revenue into a more specific area like just education instead of going straight to the general fund.
“I think it’s great but I would like to see it changed from the general fund,” Zell said.
Zell said that each month, she selects a local nonprofit to donate to. She said that she typically donates $1,000 to the designated nonprofit of the month but this last December was about six times that due to the holiday season. She supported organizations like the Mat-Su Special Santa program, saying they drove loads of gifts to their workshop, going through about three different Christmas Trees with requested items on their branches.
“It was my way of celebrating Christmas,” Zell said.
Zell said that she’s lived in the Valley since the early 1970s and she raised her son here. She said that she’s invested in here community and wants to do her part in supporting it.
“I think it’s important for people at any age to give back to their community,” Zell said.
Zell is worried that the Valley’s cannabis industry and that of the state has the potential to turn into “another Oregon” with too many cultivators and stores. She said having too many marijuana entities can oversaturate the market, drastically driving down the prices because there is too much product. She said places like Oregon and California have more cannabis than they know what to do with.
“They’re burning their weed in their fields,” Zell said.
Although she is wary of a future, oversaturated market, Zell said that the overall prices of cannabis products in the Valley and surrounding state are “stabilizing” and she doesn’t foresee prices dropping to the same degree as places Oregon because growing cannabis in Alaska is more expensive since most if not all legal cultivators grow indoors, racking up huge electricity bills.
Zell said that her store has changed a lot since they first opened. She pulled out the very first menu, which contained just 23 items. Now, the latest menu features 214 items, including items like CBD, concentrates and edibles, which were absent in the beginning.
“We’re busting out the seams now. The industry is growing so fast. It’s almost more than we can keep up with,” Zell said.
Zell said that in the early days, it was harder to find quality cultivators because it was just legalized everything was so new and people were just getting started.
“We were struggling to get products to sell but that’s all turned around. We are working with some great cultivators,” Zell said.
Farris said it’s difficult to foresee where exactly the industry will go. He said that over the next few years, the industry will see refinements on both the state and local level but he isn’t sure what that is actually going to look like until it happens.
“It is impossible to know what regulations are going to work and what regulations are not until we attempt to apply them to our operations so I think there will be some changes, hopefully for the better, to the regulations to cover some of the gaps that we currently have or things that were overlooked,” Farris said.