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Alaska’s Recreational Marijuana Market, Slow to Roll Out, Now Running Short on Product

Many of Alaska’s marijuana retail stores are unable to keep enough supply to meet demand.

Alaska has been slow to get its marijuana market up and running since legalizing adult use cannabis in 2014, but many of the retail stores are now running short of product, according to a new report from Marijuana Business Daily.

Alaska’s Department of Health and Social Services has issued a total of 61 cannabis business licenses as of November 29, but just 29 are open and operational. Many businesses, including marijuana growers, are expected to open soon, indicating that the state’s supply chain will be improved in a few months.

“A lot of these places are going to open before Christmas,” Cynthia Franklin, executive director of Alaska’s Alcohol and Marijuana Control Office, told Marijuana Business Daily. “Everybody’s going to be shooting for the holidays.”

The number of fully operating cannabis businesses – retailers, product manufacturers, testing labs, and growers — could double in December, according to Franklin. The first retail marijuana store opened in Anchorage today and two additional labs are expected to be operational sometime this month.

For now, however, the state only has one testing lab, and supply is not keeping up with demand.

Marijuana retail co-owner Nick Neade told Marijuana Business Daily that his store has had constant supply problems since opening on October 31. His store, Frozen Budz, even had to stay closed for nearly two weeks in November because of a lack of inventory.

“We’ve been open kind of off and on. The demand is way higher than the supply right now. That’s the problem we’ve been having,” Neade said. “It looks like there won’t be any flower available until the middle of December, after we sell out, and I’m assuming we’re going to sell out in a couple days,” he added.

U.S. Marijuana Laws

When Frozen Buds is open, Neade estimates that it gets at least 150 customers per day. He and Derek Morris, the general manager of the state’s very first marijuana retail store, Herbal Outfitters, told Marijuana Business Daily that they see customers coming from out of state and out of the country visit their stores, but most are from Alaska. Morris estimates that his store gets about 1,000 customers per week.

“There’s all ages, all types of customers and tourists,” Neade said. “A lot of Asians come here in winter because they want to see the northern lights. So we’re seeing a little bit of everybody.”

Alaska’s Alcohol and Marijuana Control Office has 343 businesses waiting to receive licenses, including 203 that haven’t yet filed paperwork or paid fees. Franklin told Marijuana Business Daily that her office is understaffed and there are long delays between when a business finishes its paperwork and actually receives its license.

Franklin also expressed concern with the upcoming federal government administration and what it could mean for state marijuana policies and interactions with the Federal Aviation Administration and Coast Guard.

“They really want licensed, regulated marijuana in those communities, but the only way you can get things in or out is by plane or boat,” Franklin said. “My concern about the transportation is dovetailing with my concern over the new administration in Washington, and particularly the disconnect.”

Read the entire report by Marijuana Business Daily here. You can learn more about the cannabis laws in Alaska by visiting our education page.