Five years ago, when Alaska’s first legal cannabis shops started opening, there was a lot of money to be made.
“We had three fabulous, great years,” said Sue Nowland, whose Alaska Fireweed was among the first cannabis stores to open its doors in Anchorage.
Those days are over.
Cannabis businesses across the state are confronting a daunting set of issues that owners and advocates say are making it nearly impossible to survive. Some Alaskans who poured their life savings or retirement accounts into starting companies are scrambling to find someone to buy them out. Operations are failing, others are in the red and behind on taxes owed to the state.
One measure of the industry’s problems is tax delinquency: according to an August memo from the Department of Revenue, by the end of June, 56 businesses owed $1,785,751 in back taxes. Nine of the delinquent businesses have closed, though collectively they still owe hundreds of thousands of dollars in unpaid taxes.
The most salient problems, according to people within the industry, are the flat excise tax structure placed on cultivators, an over-saturation of retailers and the rigidity to which licenses are tied to real estate.
Some say the industry’s current woes are normal growing pains to be expected as a new sector of the economy finds equilibrium. But others, including many business owners and the industry’s chief trade group, are debating potential reforms that could stave off looming business defaults as more license applications work their way through the pipeline. [Read More @ Ancourage Daily News]