Adult use marijuana businesses could contribute more than $5 million annually to Alaska’s Kenai Peninsula.
Operational marijuana businesses in Alaska’s Kenai Peninsula are expected to contribute over $5 million annually to the local economy, The Peninsula Clarion reports. Since last summer, eight cannabis businesses have opened and are operational in the 9,000-square mile borough, and nine more have been approved and are still to come.
Fifteen of the peninsula’s 17 current and upcoming businesses are marijuana cultivators, while the remaining two are already-opened retail stores. The pair of marijuana shops is likely to generate about $218,000 in sales tax revenue every year.
“Every single penny generated from this sales tax in the borough goes directly to the borough school district,” Dollynda Phelps, co-owner of a Kenai marijuana cultivating business and member of Kenai’s Marijuana Task Force, told The Peninsula Clarion. “So I think this is a wonderful number, and of course this will rise as well as we see more growth in the industry.”
According to the results of a survey presented to the Kenai Chamber of Commerce, the peninsula’s marijuana market could contribute up to $5.3 million annually in taxes and spending on infrastructure and compliance. Phelps and marijuana retail store owner Patricia Patterson surveyed the current licensees, and found that cannabis businesses have so far hired 46 employees, with another 30 potential jobs becoming available throughout the year. The businesses have so far spent an estimated $1.9 million on outfitting and building out operations, and spend over $300,000 every month for transportation, utilities, gardening supplies and other operating expenses.
Alaskan voters legalized recreational marijuana in November 2014, but it took the Alaska Marijuana Control Board over a year and a half to establish the industry’s rules and get the program off the ground. The law allows adults aged 21 and older to possess up to 1 ounce of cannabis for recreational purposes. The state’s first marijuana retail store didn’t open until the end of October, but now many of the shops are unable to keep enough supply to meet demand.
For the Kenai Peninsula, population 57,000, the greatest impact of the law is the opportunity for commercial cultivation. The licensed cultivators that are operational in the borough sell their products to stores throughout Alaska. Retailers are only legally allowed to sell marijuana products that they’ve obtained from licensed marijuana cultivators and that are packaged, labeled and tested under Alaska law.
The adult use market on the peninsula could face future challenges, as a ballot measure that will ban commercial marijuana operations in the borough outside the cities will be presented to voters in October. If approved, the measure would eliminate 16 or the 17 marijuana business licensees’ operations, including the two largest cultivators.
“We will lose 46 jobs and all the finances I’ve described… it is very important that we take a look at this in a factual way and evaluate our situation,” Phelps said.
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