JUNEAU, ALASKA — Alaska marijuana grower Leif Abel considers his business successful but still feels like he's living "paycheck to paycheck" much of the time.
A greenhouse expansion is behind schedule, and he said the company could have hired more crews to work on it if taxes and other expenses weren't so high.
"We don't have enough of a cushion where we could comfortably have a crop failure, and that's not a very safe place for a cultivation company to be," said Abel, an owner of Greatland Ganja in the Kenai Peninsula community of Kasilof.
Abel is among a number of Alaska pot growers who have struggled to pay the state's $50-per-ounce cannabis tax as marijuana prices have tumbled. He said he's paid his taxes on time, but it hasn't always been easy.
Forty-five growers in the state are delinquent, compared to six a year ago, according to figures provided by Alaska's Department of Revenue. For the June tax filing period, more than 160 growers had filed a tax return with the state.
The cannabis tax is imposed on cultivators when pot is sold or transferred from a grow facility to a retail shop or product manufacturer. There is a lesser tax rate for immature bud and trimmings.
Dane Wyrick said the future of his Anchorage cultivation and retail business Danish Gardens is hazy after feeling squeezed by state taxes and other expenses. He said the tax, combined with production expenses and other factors, is too burdensome.
Among states that have legalized recreational cannabis, Alaska is the only one whose tax structure is built solely on a fixed dollar amount paid by growers, according to information compiled by the Pew Charitable Trusts, a public policy organization. Alaska has no statewide sales tax, though some municipalities, like Anchorage, levy their own sales tax on weed.
By comparison, California has a fixed dollar amount cultivators must pay and has a 15% tax on retail sales. Local governments in that state can add a levy on top of the state tax on retail sales. Nevada has a percentage-based tax that also applies to growers.
In Alaska, the total amount of late taxes due, with accruing penalties and interest, is about $1 million, according to the department.
"When you get into a hole, it's really hard to get out when the holes keep getting deeper underneath you," said Jana Weltzin, an attorney who represents Alaska cannabis interests.
When the industry first started, prices were around $4,000 a pound, said Cary Carrigan, executive director of the Alaska Marijuana Industry Association, a trade group. They have settled around $2,300 a pound, he said.
While the price was expected to decline, "no one anticipated that the floor would drop that low, to the point where if you paid your taxes on time you would not have enough money to pay your employees or your electric bill or something else would suffer," he said. "That's why there are so many delinquencies and people that are working on tax payment programs."
The tax generated anticipated revenue of about $1.8 million for the state in June. Three-quarters of state pot revenue is intended to be used for recidivism programs and a marijuana education and treatment fund.