Alaska Has Been a Trailblazer in Cannabis Policy

Alaska has been a groundbreaker in cannabis policy reform. Voters legalized medical cannabis in 1998, making their state the second (tied with Washington and Oregon) to legalize medical cannabis, though there was no way for patients to legally purchase it. In 2014, Alaska became the third state (tied with Oregon) to legalize cannabis for adults’ use.

On November 4, 2014, 53% of Alaska voters approved Ballot Measure 2, legalizing cannabis for adults’ use. Residents 21 and older can now legally grow up to six plants at home and purchase up to one ounce of flower or seven grams of concentrate. However, there is still work to be done. Alaska still has no way for patients under 21 to purchase medical cannabis, and medical patients over 21 are not exempt from cannabis taxes. Alaska also is one of only two legalization
states with no expungement process for past cannabis convictions. It also falls short on reparative justice and non-discrimination protections.

While some cities and towns have banned retail sales, Anchorage, Juneau, and Fairbanks are among the many jurisdictions that have retail cannabis stores.

Alaska considers revising cannabis tax

On September 21, 2022, Alaska Gov. Mike Dunleavy (R) issued an administrative order to create a Governor’s Advisory Task Force on Recreational Cannabis to review the state’s cannabis tax structure and regulations. While cannabis taxes generate millions in revenue for Alaska (nearly $30 million in 2022) there are concerns about the $50 per ounce excise tax on cultivators, which is an increasingly high percentage of the sales price.

The task force recommended a significant overhaul of the cannabis tax system. Their suggestions included:
- Short term: Reduce the current weight-based tax to 25% of its original rate.
- Long- term: Eliminate weight-based taxation and implement a standard sales tax. The task force initially proposed a 3% sales tax, but this was revised to a 10% sales tax effective January 1, 2025.

These proposed changes aim to simplify tax collections, encourage product innovation, and
potentially generate similar or even greater tax revenue for the state.

The task force also recommended allocating cannabis tax revenue as follows:
- 50% towards recidivism reduction programs
- 25% to the state’s general fund
- 25% to substance abuse treatment programs

The legislature has not acted on the recommendations.

On May 13, 2024, the Alaska House of Representatives passed House Bill 119, a cannabis tax reform bill, which would reduce the tax rate to 7% from $50 per ounce excise tax. This aimed to address the concerns surrounding the tax structure and encourage market competitiveness but unfortunately died in committee this past session.

Alaska led the nation on on-site cannabis consumption

In 2019, Alaska became the first state to license on-site cannabis consumption when the Marijuana Control Board approved the first businesses permitted to offer onsite use of cannabis products in the state. At least two cannabis retailers — Good Titrations in Fairbanks and Cannabis Corner in Ketchikan — now allow onsite consumption. 

Retail businesses interested in participating must apply for a special on-site use endorsement and devise plans that meet security, ventilation, and other standards required by the Marijuana Control Board. Local governments can object to onsite consumption endorsements and use a municipal ordinance or a vote of the people to prohibit onsite use or aspects of it, such as smoking.

Alaska’s cannabis policies lag behind some states

While Alaska’s cannabis laws have come a long way, in some ways other states have surpassed them. Several states — including California, New Jersey, and New York — provide employment protections for cannabis consumers. About half of the nation’s 37 medical cannabis states provide similar legal protections. But in Alaska, both medical cannabis and adult-use consumers can still be fired for using cannabis off-hours and for testing positive many hours, days, or even weeks later.

Unlike several other states, Alaska has also failed to expunge past convictions for individuals convicted of cannabis crimes before legalization.

On April 20, 2022, the Alaska House of Representatives passed HB246, which would have removed past records of simple cannabis charges from a public online database. It also would have changed the charge of possession for 18–20-year-olds from a jailable misdemeanor to a fine-only violation. Unfortunately, the Senate did not pass this bill and it died in committee. 

Anchorage Assembly Reforms Drug Testing Policy

On October 11, 2023, the Anchorage Assembly significantly reformed the municipality’s drug testing policy for city workers. This reform allows most employees to use marijuana legally according to state laws. 

The key points of the reform are: 

• Similar treatment to alcohol: Most employees can now use marijuana off- duty, similar to how alcohol use is handled. 

• No marijuana use within eight hours of work: Employees cannot work under the influence and a minimum eight hour buffer is mandated between use and work. 

• Focus on impairment, not private use: Testing aims to identify on the job toxification rather than simply detecting marijuana use. 

• Support over punishment: Failing a drug test no longer leads to automatic termination. Instead management could choose to require the employee to go through a “progressive discipline” process. That may include substance misuse education, an assessment and a referral to treatment.

Make sure you’re signed up for MPP’s email alerts so we can keep you posted about efforts to fix shortcomings in Alaska’s cannabis laws — including adding employment protections, expunging (or at least shielding) past cannabis convictions, and reducing the penalty for those under 21 to a civil fine instead of a jailable offense.

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