By Yereth Rosen

ANCHORAGE (Reuters) - Voters in Alaska will decide on Tuesday whether to make their state the first in the country to legalize the sale, possession or use of marijuana by adults.

Alaska already allows legal possession of small amounts of marijuana by adults, the most liberal policy among the 50 U.S. states, thanks to a 1975 state Supreme Court ruling.

"Our territory and now state has traditionally been the home of people who prize their individuality and who have chosen to settle or to continue living here in order to achieve a measure of control over their own lifestyles which is now virtually unattainable in many of our sister states," the oft-quoted ruling said.

Supporters say further decriminalizing pot would allow local governments and the state to regulate and tax it and free up police to pursue serious crimes.

"This is a very broad initiative that says, instead of the prohibition model, let's try the regulation model," said David Finkelstein, a former state Democratic lawmaker helping to organize the initiative campaign for Tuesday's election.

Opponents of the measure argue full legalization would be a step backward for Alaska, a state of about 650,000 people, which has an extremely high rate of substance abuse, including the use of marijuana by youths.

Tuesday's initiative will be the third in six years asking Alaska voters about marijuana policy. In 1998, voters approved a ballot measure legalizing medical marijuana, but two years later they rejected one that would have legalized the drug and mandated financial restitution for people convicted in the past of marijuana offenses.

Alaska's initiative is one of three marijuana questions on ballots across the country. In Oregon, voters are being asked to expand allowable medical marijuana use, and voters in Montana will decide whether to become the 10th state to legalize its medical use.

Pro-initiative groups said no opinion polls had been taken on the measure. But if the initiative passes, Alaska's Legislature will be responsible for defining how to regulate marijuana, in the same way the state decides on alcohol restrictions. After the 1975 ruling, the Legislature defined a "small amount" of marijuana as 4 ounces (114 grams).

With financial backing from the Marijuana Policy Project, a group funded partly by billionaire philanthropist George Soros, the initiative group has used television advertisements and mailings to emphasize Alaskans' love for personal freedoms.

Initiative opponents fume at the idea marijuana use has anything to do with Alaskan individuality, although they admit the argument is powerful.

"In Alaska, fiction has always won out over fact," said Matt Fagnani, president of an Anchorage drug-testing company and chairman of a group called Alaskans Against the Legalization of Marijuana and Hemp.