It was a packed house at assembly chambers on Tuesday for an informational session and public forum on marijuana and the regulations coming down the pipe. Haines and Skagway have not decided how they will handle the sale of marijuana and its products, but the conversation is starting.
The legalization of pot in Alaska has a long and fuzzy past. It’s been sort of legal for decades. But, last fall, voters passed Ballot Measure 2, a bill that made marijuana legal for those 21 or older, and would tax and regulate the production, sale, and use of marijuana in the state.
Cynthia Franklin, the director of the Alcoholic Beverage Control Board and the Marijuana Control Board, spoke to locals in Haines and Skagway last week. The goal of the session was to clear up misconceptions around regulations on selling marijuana and related products.
The marijuana board is tasked with creating regulations around licensed marijuana establishments. Currently, a draft of the rules around pot businesses are up for public comment on the state’s website.
The fact that weed is still illegal on the federal level is confusing, and makes it more difficult for companies to get off the ground.
“What we know is that the federal government has the power to declare our regulations to not be robust enough to protect in these areas and that they can, and in the case of Montana have, come in and busted out our licensees,” she told the crowd, that spilled out into the hallway. “(They) come into a place that is trying to comply with state regulations and believe they are operating in a perfectly legal manner and charge them with a federal crime. We don’t want that.”
Obtaining a marijuana business license similar to getting a liquor license ‑ with one big difference. There are a finite number of liquor licenses available regionally within the state of Alaska and so they can be bought and sold privately at an inflated price. The number of marijuana business licenses, which will cost $5,000, and will not limited.
“Ultimately the free market will determine how many marijuana licenses are supported in this state,” she said. “And if we attach the secondary market value to these licenses, then we invite speculation in the licenses. We invite people who come not because they intend to actually operate a retail marijuana store but people who want to come in and get a license because they want something to sell to someone else.”
Franklin also touched on local option. A community can vote to ban marijuana establishments completely. A town can also decide how much to tax products, where businesses can be situated, as well as how many can be set up. She said the state won’t issue a license if it is violation of local laws.
Last week, the Matanuska-Susitna Valley community of Palmer voted to ban establishments .The proposition prohibits commercial cultivation, manufacturing, testing and retail stores. In Fairbanks and Bethel, however, communities acknowledged the potential for revenue and voted of in favor of taxing marijuana sales 5 and 15 percent, respectively.
It’s still up in the air what Haines and Skagway will do. If all goes well with the regulatory process, the state will start accepting applications for pot-related businesses on Feb. 24, 2016. The state will then dole out licenses on May 24.
“If you make the mistake of reading articles and reading the comments … you would become convinced that we were late or that we are dragging our feet or we were never going to make this happen, but in fact we have miraculously stayed on an incredibly tight and, what some people would say is a nearly impossible schedule.”
There is Haines borough assembly public meeting slated for Oct. 28 to discuss the potential for businesses in Haines. There are four types of establishments laid out in the ballot measure: retail stores, cultivation operations, product manufacturing facilities and testing services.
Future marijuana-related businesses in Southeast will have to overcome a myriad of challenges to even open their doors. One of the biggest is transportation. Licensees have to track where they get their pot, if it comes from outside their home community. Border crossings, airlines and ferries all have hefty restrictions. But the pot has to be tested for potency before it is sold. That means that pot would have to be tested – with equipment that runs over $100,000- in Haines and Skagway.
“It’s a problem, I’m not saying it’s not a problem,” Franklin offered. “I’m just saying that it remains to be seen what will be done and how creative people will get. It is the hope and was part of the discussion of the board that testing equipment could be transported into communities that needed testing.”
Kevin Higgins is a criminal defense attorney from Juneau. He said there are serious challenges to regulating pot. And transportation is just one of them. Getting support from banks, because most are federal, for a marijuana business is all but impossible. And writing off business expenses on a federal tax return will also present a barrier.
“When you’re a bank and you can face seizure of assets, that’s another thing,” he said. “There are suspicious activity reports that need to be filled out quarterly by the banks, that they have to fill out.”
Kristine Harder owns Buckshot and Bobbypins in Skagway. She ran her store in Haines for several years before relocating. She was vocal at last week’s forum along with others who are interested in starting marijuana enterprises. Last month in Skagway, Harder said the potential for local regulations might just make things more complicated than they need to be.
“I see it as just more burdensome, extra taxes,” Harder said. “Sometimes when I listen to candidates talking about wanting to bring this in and how it’s good for the community, I feel like they’re just playing to those who they think would not support it in any other way unless they were getting local taxes and I’m not always sure that more tax is a good thing.”
She said that over the summer in Skagway, she had lots of tourists asking about where to buy marijuana edibles but she had to tell them, yes, pot is legal, but the details on selling it haven’t been worked out yet. She said, when the application process begins in February, she’ll be ready.
“I sure have the space for it and I am off Broadway, but it would be like me and everybody else in town applying for the license,” she said. “Have I saved the $5,000? Yes.”
Written comments will be accepted until Nov. 11 on the first regulatory draft on the state’s website. Oral comments will be taken on Oct. 15 and 16 in person and via phone. To submit a comment click Here.