Legal Marijuana & Alaska's Economy Are Entering Into One Hell Of A Mutually Beneficial Relationship
Have you heard the big news? On Tuesday, Feb. 24, yet another state-level marijuana prohibition went by the wayside, no doubt leaving some very happy tokers in its wake: Alaska officially legalized recreational marijuana, months after the 2014 election in which voters backed the drug. But, of course, these new legalization measures aren't sold just as a way for stressed out citizens to mellow — they're also touted for their economic benefits, as well. So, how will marijuana affect the Alaska economy, you ask?
The best way (and, thanks to the thin number of states that have actually embraced legalization, likely the only way) to judge how marijuana could change things for the Alaskan state economy is to examine what's happened the other places where it's been fully legal for a while. Why not take a look at the place where American legalization first took hold, the great state of Colorado?
When you glance over how it's gone for the Centennial State, one thing becomes very clear: while marijuana will likely never have enough impact to make everyone happy, it's having a noticeable effect, and could ultimately provide Alaska a tidy chunk of state tax revenue.
Given a wealth of information since legal sales began back in Jan. 2014, Colorado stands out as a hopeful barometer. The numbers, after a full year of legal marijuana sales, as detailed by the Washington Post's Christopher Ingraham:
- Colorado's legal marijuana sales topped out at nearly $700 million total in 2014.
- Medical marijuana was still the more dominant earner, with $386 million in sales compared to just $313 million for purely recreational use. Medical marijuana recommendations are notoriously easy to get, however, so it's possible that they're still the beneficiaries of some recreational users who prefer the products (or the ambiance of a medicinal clinic) for one reason or another.
- The entire marijuana enterprise writ large hauled in $63 million in straight taxes, along with nearly $13 million in licensing fees and attendant costs.
All in all, the marijuana market in Colorado is chugging along, and it's helping out with funding in some areas. As USA Today notes, about $17 million of the marijuana tax revenue is being used to improve conditions in some of the state's public schools. That is, however, less than half of the revenues that had initially been promised — Colorado's Amendment 64 called for $40 million. That figure should improve as time goes on, however, with the state's marijuana sales expected to rise to nearly $1 billion in 2015.
Of course, no two states are perfect parallels. Colorado has over 5 million residents, according to the U.S. Census, compared to just over 700,000 in Alaska's sprawling, sparsely populated confines. As such, it's worth bearing in mind how a scaled-down population could impact marijuana's benefits to the state economy — on the one hand, you've got less people to spend that state's money on, but also less people who'll want to get high.
If we were being generous and predicting Alaska's marijuana market to do, say, one-fifth as well as Colorado's in its first full year (despite having less than one-fifth its population) you'd be looking at considerably more modest numbers: about $140 million in total sales. I admit, that might not sound like much, and how the taxes and fees shake out is yet to be seen.
But legalizing marijuana isn't just about filling the state's coffers, after all. It's about fairness and justice, too. And if you're still all about the money, bear this in mind: stoners were gonna stone anyways, but now the state reaps a reward. Like Colorado governor John Hickenlooper said in a statement, "The people who were smoking marijuana before legalization still are. Now, they're paying taxes." Hopefully the people of Alaska will be able to reap a similar reward real soon.
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