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. 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 legally grow up to six plants at home, up to 12 if multiple adults live in the same domicile, 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 is also the only legalization state 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 with retail cannabis stores. Most cannabis stores reside outside city limits in areas like Wasilla and Palmer. There are many smaller communities in Alaska, such as Valdez, Seward, Kodiak, Unalaska, Bethel, Dillingham, Nome, Kotzebue, Utqiagvik, and many in Southeast Alaska with a large influx of tourism, which have one to three cannabis stores. There is even one in Northway Junction and Denali!

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 (over $25 million per year) 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

Cannabis Bills Falter Amid Budget Pressures in 2025 Session

During the 2025 spring legislative session, four cannabis-related bills were introduced but ultimately failed to advance due to broader fiscal and political constraints.

HB 81, sponsored by Rep. David Nelson (R-Anchorage), sought to limit public access to certain low-level marijuana possession conviction records. Although the bill did not impact state revenue, it stalled after being heard in the House State Affairs Committee on March 6, with no further action taken.

HB 91, sponsored by Rep. Ashley Carrick (D-Fairbanks), proposed replacing the state’s weight-based marijuana excise tax with a 6% retail sales tax and allowing local governments to levy additional taxes. While it passed the House State Affairs Committee, the bill stalled in House Finance after a single hearing on April 30, where it was heard and held. Despite strong support from the cannabis industry, the proposal was viewed as a revenue reduction during a year defined by budget shortfalls, making it politically challenging to advance.

HB 94, introduced by Rep. Frank Tomaszewski (R-North Pole), was a companion to SB 73 and aimed to exempt small cultivators from the $50-per-ounce cultivation tax while implementing a 6% retail tax. It was heard and held in House Labor & Commerce on March 3 and never advanced to the Finance Committee.

Meanwhile, SB 73, sponsored by Sen. Matt Claman (D-Anchorage), mirrored HB 94 and made it out of Senate Labor & Commerce but stalled in Senate Finance after a March 6 hearing. Though there was interest in reforming the tax structure to ease burdens on cultivators, the Senate prioritized protecting existing revenue streams and maintaining reserves, ultimately sidelining the bill.

All four bills stalled amid a legislative session consumed by Alaska’s ongoing budget deficit and a sharp focus on passing an austere operating budget. Lawmakers prioritized education funding, energy needs, and retirement obligations, while agreeing on a historically low $1,000 Permanent Fund Dividend. With reduced oil revenues and reluctance to draw from state savings, the Legislature was unwilling to entertain proposals that could reduce revenue, including marijuana tax reform. The House Finance Committee, in particular, was overwhelmed with high-priority legislation and declined to move bills like HB 91 forward. While none of these cannabis-related bills passed, they remain alive for consideration in the second session of the 34th Legislature in 2026.

AMCO Rolls Out Cannabis Regulation Changes

On December 8, 2024, AMCO removed the requirement that edible-only on-site consumption areas in retail marijuana stores be physically separated from other areas of a retail store by walls and a secure door. This change allows dispensaries to permit edible consumption within their existing lounge or retail space.

On April 19, 2025, labelling requirements for cannabis test results were amended to require that wholesale marijuana shipping labels list all additional contaminants tested beyond those required by law. Instead, cultivation facilities must now provide that information upon request from the receiving establishment. Labels must still include cannabinoid potency ranges and required microbial and residual solvent results.

On April 20, 2025, regulations for marijuana handler permit education courses were updated to require faster course updates after legal changes and to allow optional employee-specific content for different license types if at least 20 tailored exam questions are included. Tracking requirements now apply when a plant begins flowering instead of exceeding 18 inches in height.

On April 25, 2025, the 50-plant batch limit was removed for cannabis clones and cuttings, allowing retail cultivators to group any number of genetically identical immature plants into a single batch for tracking purposes.

On May 29, 2025, licensing fees for cannabis facilities were lowered.

On December 8, 2024, AMCO amended regulations to clarify that exterior window pick-ups at marijuana retail stores must occur within the licensed premises, be in fixed structures (not trailers or separate drive-throughs), and be configured to ensure video surveillance captures both ID verification and the full transaction. AMCO also removed the requirement that edibles-only onsite consumption areas in retail marijuana stores be physically separated from other areas by walls and a secure door.
  

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 40 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.

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.

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