Alabama Marijuana Business

What is the Demand for Marijuana in Alabama?

Medical marijuana became legal in Alabama in 2021, but sales are yet to begin. Also, there are no registered patients and caregivers to buy legal weed at the moment. After legalization, the Alabama Medical Cannabis Commission (AMCC) began receiving applications from prospective marijuana establishments in September 2022. The AMCC will announce licensed medical cannabis businesses on June 12, 2023. Therefore, registered patients may begin purchasing marijuana products legally later in 2023. Recreational marijuana remains illegal in Alabama.

How is Marijuana Taxed in Alabama?

According to Alabama Code § 20-2A-80, marijuana dispensaries will pay a 9% excise tax on every sale of medical marijuana. The state’s medical marijuana program also includes a 9% sales tax for registered Alabama patients purchasing medical marijuana. Licensed marijuana businesses will also pay the medical cannabis privilege tax, which will be set when legal sales begin. Revenues generated from the medical marijuana program in Alabama will be divided into two parts: 60% will go into the state’s General Fund and 30% into the Alabama Medical Cannabis Research Fund.

Although marijuana for recreational purposes is illegal, Alabama Code § 40-17A still imposes a Drugs and Controlled Substances Excise Tax. This law mandates dealers caught selling, transporting, distributing, or possessing marijuana to pay $3.50 per gram of marijuana as tax. Dealers must also purchase the labels and official stamps from the Alabama Department of Revenue (ALDOR).

What is the Agency Taxing Marijuana Business in Alabama?

Established in 1939, the Alabama Department of Revenue (ALDOR) is responsible for collecting tax revenue as required under Alabama Code § 40-23-1. The department can request, inspect and assess business records of licensed businesses, including marijuana establishments, in the state. Failure to submit requested records may lead to prosecution from the Department of Revenue.

As part of its enforcement responsibilities, the ALDOR may bring charges against marijuana establishments involved in tax fraud. Examples of tax fraud in Alabama include misrepresentation of taxable income and refusal to pay taxes when due. Marijuana businesses seeking to file and pay their taxes can find helpful guidelines on the official website of the department. Business owners can contact the ALDOR by scheduling appointments through any of the nearest Taxpayer Service Centers. The Alabama Department of Revenue headquarters is located at:

Department of Revenue

50 North Ripley Street

Montgomery, AL 36130

Phone: (334) 242 1175