Auditors say marijuana tax debt grew to $5.5 million as board oversight fell

Alaska is in the middle of renewing its marijuana business licenses. Since 2024, renewal has been the only time the state's Marijuana Control Board reviews whether growers are behind on their taxes, according to state auditors.

That unpaid bill has been growing. Marijuana growers owed the state $5.5 million in overdue taxes as of December 2025, up $2.4 million since the previous audit in 2023, according to a sunset review of the board by the Legislature's auditors. The number of growers behind on their taxes rose from 59 in April 2023 to 69.

Growers pay a $50-an-ounce excise tax when they sell marijuana to stores or product makers, reporting their sales to the Department of Revenue each month. Of the 69 behind on payments, 14 were keeping up with payment plans. The rest held 16 active licenses and 39 inactive ones.

The board used to act on tax debts monthly. Starting in early 2023, the board's chair had the state's Alcohol and Marijuana Control Office file to revoke licenses of growers who owed $5,000 or more and was more than three months behind. In March 2024, the board switched to reviewing tax debts only when licenses come up for renewal.

Over the period they reviewed, "board oversight of delinquent taxpayers declined and the amount of delinquent taxes grew," the auditors wrote.

They also found nine active licenses with owners tied to inactive, tax-delinquent licenses that together owed about $1.5 million. In one case, a retail store license was approved after the same applicant's grow license was made inactive for unpaid taxes.

When those debts reached the board in February, members gave most of the growers time to pay. The board took up seven renewals from growers on the Revenue Department's delinquency list, according to the meeting minutes. It approved three, two after the growers showed they had paid. For the other four, it voted to deny the renewal but put the denial on hold for 60 days, giving the growers time to pay in full or get on a payment plan.

In December 2025, the board denied the renewal of Anchorage grower Alaskasense over $633,000 in unpaid taxes.

This year's renewal numbers look much like last year's. Of 472 licenses up for renewal, 408 had complete applications and 231 had been renewed as of Nov. 9, according to a licensing memo to the board. Another 169 were complete and waiting to be issued, and 37 needed corrections. In late November last year, 416 of 481 were complete and 39 needed corrections.

Twenty-seven licenses are going away, surrendered or not renewed. They include 16 grow licenses, eight retail store licenses and three concentrate licenses.

Bills in the Legislature to lower the excise tax have sat in committee since early 2025.

The board meets Nov. 18 and 19 in Anchorage. Under state law it is set to shut down June 30, 2027, unless lawmakers extend it. The auditors recommended four more years, half the maximum, citing the board's "inability to adequately address licensing delays."