ANCHORAGE (KTUU) - While they're still allowed to remain open and operate during hunker down orders, Alaskan cannabis dispensaries are feeling the financial pinch of coronavirus. Now some are in a position where they could use relief, but are finding out quickly that they do not qualify.
President of the Alaska Marijuana Industry Association, Lacy Wilcox said many dispensary owners have been reaching out looking for help getting help.
She said the reason that they don't qualify is simply because marijuana is still federally illegal and therefore federal relief money can't go to dispensaries.
"That's our reality, that we don't expect any assistance to come," Wilcox said, "we are allowed to remain open and it makes it even more vital that we be able to continue to operate because there's no lifeline."
Co-owner of Dankorage, Craig Aglietti is feeling the strain of hunker-down orders. He said he also saw a large spike in sales before the orders were announced. He said there was a plummet shortly afterward and now there is a steady plateau of business.
Aglietti feels that now is the time for the federal government to rethink how they see the cannabis industry and offer aid to small businesses like his.
"It just feels like a real stab in the back. We're all United States citizens, we pay our taxes, we're working in a state legal industry," he said, "I understand that federal status is something that is difficult but in a situation like this, it seems unfair and discriminatory."
Wilcox and Aglietti said the frustration doesn't come from pot still being federally illegal. It comes from the fact that cannabis businesses pay a lot of money in taxes and now they can't get any of that money back for help.
"If I was running a normal retail establishment, I'd be paying around 32-36% of effective tax rates to the government," Aglietti said, "right now my effective tax rate is more like 85%."
The Department of Revenue Tax Division reported that the cannabis industry in Alaska has generated at least $15.5 million in tax revenue in FY 2020 so far.
He said that on top of high tax rates, dispensaries can't claim any business deductions on their returns aside from cost of goods sold. So all the money tied in the business shows up on his tax return as income.
Wilcox and Aglietti brought up the high start up costs of cannabis businesses for which they can't seek out traditional investors and loans. They said most of the money spent to start up comes from life savings and other avenues of capital.
Wilcox said she and her husband also run a cultivation and manufacturing plant. She said the two licenses they needed alone cost over a million dollars each.
"I don't know of a licensee who doesn't have an incredible payment plan set up with the IRS to make personal tax payments," she said.
For all these reasons, Wilcox said AMIA is trying to work with federal lawmakers to make an exception for cannabis businesses to be eligible for relief in states where it's legal.
She said there are other things that would work too, that wouldn't take away from the greater effort of fighting COVID-19 as much. Wilcox said they are also working with the state legislature to see if state funds can help.
"All that federal money should be used in response to covid for healthcare and small business relief, and since we don't qualify, maybe set aside a few state dollars for us," she said.
For those who may question why cannabis industry workers should get relief if their businesses are allowed to be open, Aglietti said he's grateful to be working. However, there's not much of a choice after sinking in so much money into the business and not being eligible for relief.
"It's dangerous to be open right now," he said, "I'm not saying I would close those doors, but I'd like to be given the choice."
Copyright 2020 KTUU. All rights reserved.