Last month, Borough Assembly member Caroline Roberts, with cosponsor Jeffrey Woods, proposed a 3% areawide retail sales tax on cannabis and cannabis products in the Kodiak Island Borough. Roberts said on July 16 that the tax will bring in money to promote “health, education and economic development.”
“We've discussed this proposal several times at work sessions, and just simply put, it would create an additional source of funding for program services, projects, and grants that support community, the community as a whole, and take some pressure off of the general fund," she said.
Local business owner Janiese Stevens is opposed to the tax. Stevens is one of only two retail cannabis store owners in the Kodiak Island Borough. The other is Jack Schactler, who owns High Rise in downtown Kodiak.
Stevens told the assembly on July 16 that the way the proposed tax is written is flawed, and her two cannabis shops, Wildflower Kodiak on Near Island and Wildflower Smoky Hallow near Bells Flats, are already overtaxed and overregulated by the state.
“Based on sales tax reports, you're not able to take into account non-THC items sold, such as nicotine, apparel, and other substances," Stevens told the Borough Assembly.
As written, the proposed 3% retail sales tax would be paid by the customers when they buy any marijuana product, as defined by state law to include any part of the cannabis plant, from Schactler’s and Stevens’ stores. That includes concentrates, edibles and other cannabis products. But it does not mention products that do not contain THC. Both businesses, High Rise and Wildflower, also sell cannabis products online via their respective websites
According to City of Kodiak sales tax records, local cannabis stores brought in more than $4.5 million in gross sales every year for the last five years since 2021. A 3% retail sales tax would generate more than $300,000 in additional annual revenue for the borough, according to city documents. A dozen other municipalities around Alaska, including Anchorage, have implemented their own retail sales taxes on cannabis ranging from 2% to 15%.
Stevens said the borough would raise significantly more revenue if it put a tax on other types of products, like alcohol or tobacco, instead of marijuana.
“If your goal is to raise revenue for some community fund, why not pick the poison with the highest revenue and the highest cost to our community? And it is not marijuana," she said. "Both alcohol and tobacco outsell marijuana and have a much higher price tag, draining our island's public safety and health resources.”
Assembly member Bo Whiteside agreed that the potential revenue from a cannabis sales tax is small, but he said the need to diversify the borough’s revenue outweighs the burden placed on these specific businesses.
“We can't just continue to rely on property taxes to generate revenue to provide services in the community. It's just not sustainable," Whiteside said. "We've had countless testimony about the pressures of affordability in our community and why people are leaving us-they can't afford to live here.”
This proposed tax is facing pushback in the assembly however, as assembly member Jeremiah Gardner already expressed his opposition to any new taxes.
“I see this as somewhat targeted at such a small business demographic that it's extraordinarily hard for me to get behind it," Gardner said.
Still Gardner said he would be willing to approve the tax at the borough assembly’s next meeting so that it can go on the ballot for borough voters to decide. During the July 16 meeting, Gardner was the only no vote to oppose moving the tax forward to a public hearing at the assembly’s next meeting on Aug. 6.
The proposed borough-wide cannabis retail sales tax is scheduled for a public hearing on August 6. If the Borough Assembly approves it at Thursday’s meeting, then it will be put to voters as a ballot proposition during the municipal election in October.
And for transparency, Borough Mayor Jared Griffin is also the general manager at KMXT. Per KMXT’s policy, he does not have any editorial influence over news stories and doesn’t review them before they air.
