Alaska a destination for cannabis tourists
Tourist dollars are coming, and it’s up to the Legislature and the Marijuana Control Board to maximize how many Outside greenbacks the Alaska “green rush” will rake in.
With nearly 2 million visitors per year dropping $941 per person per visit, Alaska’s $2.42 billion dollar tourism industry could be a vast revenue pool for the marijuana industry and its accompanying taxes, but draft regulations could create hurdles unless changed.
As of yet, the tourist industries have not marketed Alaska as a marijuana destination, or taken any kind of regulatory stance, until the industry has grown enough to establish marijuana as a selling point.
Alaska Travel Industry Association president and CEO Sarah Leonard said her organization has taken no position on marijuana until local regulations are sorted out. Others are waiting for convincing proof of big bucks to focus on marijuana tourism.
“Tourism marketing in Anchorage, and throughout Alaska, is focused on several key messages — mountains, glaciers, wildlife and authentic culture,” wrote Julie Saupe, president and CEO of Visit Anchorage, a tourism industry group. “For marijuana destination marketing to be efficient and effective, the tourism industry would need to see research that convinces us this activity is a key travel motivator for visitors to our state.
“Until then, legal marijuana will likely be enjoyed by some visitors with or without specific sales and marketing efforts.”
Alaska Marijuana Industry Association vice president Brandon Emmett, also a member of the Alaska Marijuana Control Board, says the industry will at very least hasten the trip for people who already wanted to come to Alaska.
“Alaska is almost every outdoorsman’s dream,” Emmett said. “It’ll probably be the push they need to finally book the trip up here, once they know they can come up here and buy and partake in a legal environment.”
Tourism professionals from the Lower 48 agree with Emmett, but are more hopeful that people will travel to distant Alaska on the lures of weed.
“If there’s anything Washington and Colorado have shown us as a company, it’s that people are willing to travel to a place where it’s legal,” said Chase Nobles, co-founder of Kush Tourism, a Seattle-based company specializing in cannabis tourism information and tour organization in Washington and Colorado. “How many people have always wanted to go to Alaska? Well now they have legalized weed, so it’s ‘let’s go on a fishing trip, let’s go see Denali.’ It’s a great move for a great state.”
The regulatory landscape has a few rough patches, however, that could make the tourism part of the industry more difficult.
At the top of the list is the contentious legal status of marijuana social clubs.
The Marijuana Control Board has prohibited marijuana clubs, which do not sell cannabis but allow on-premise consumption and sharing, in the first draft regulation package. According to Harriet Milks, assistant attorney general and the board’s legal counsel, clubs are outside the board’s authority until the Legislature creates a club license type. The board could potentially rescind the prohibition at its Nov. 20 meeting, or propose alternatives.
Like Colorado and Washington, Alaska’s hotels are typically smoke-free. Because public smoking is banned, consumption is effectively limited to private homes, which was already legal under the 1975 Alaska Supreme Court’s Ravin vs. State of Alaska ruling.
Social club advocates including Fairbanks North Star Borough worry tourists won’t drop as much money on pot if they have no place to smoke it.
Industry voices came out in droves during an Oct. 15-16 public commentary period to ask the board to repeal the prohibition in its next regulatory draft, due Nov. 20. Board chairman Bruce Schulte guessed that comments regarding marijuana social clubs outnumbered all other subjects by a 3-1 ratio.
Boroughs and local governments also spoke against the board’s proposed buffer zone, which prohibits any marijuana license from operating within 500 feet of any school, youth center, recreational center, or church where children congregate.
“Every municipality that testified said that the buffer zones will kill our industry,” said Emmett. “It was coming from borough attorney, directors of zoning, everyone from Southeast saying ‘We get 2 million tourists a year, we need to capitalize.’”
The 500-foot buffer is only half the federal Drug Free Zone standard of 1,000 feet, but Alaska’s small towns and villages, particularly Southeast Alaska communities with heavy tourism economies, will have difficulty finding child-free space in any of the areas zoned for business.
In narrow Ketchikan, churches and daycare centers dot the downtown area on street level and second floors. Representatives from Sitka and other Southeast communities, cruise-based tourist destinations, expressed similar concerns.
In Fairbanks, there are worries that the buffer zone will kill the tourism that comes through Fairbanks’ downtown area, which has cramped conditions similar to Southeast Alaska communities.
“That buffer could kill that tourism industry,” said Emmett, a Fairbanks resident. “Where are these tourists going to go? You’re going to have a lot of young tourists come and be excited about participating in our legitimate market only to find it’s been zoned out.”
Beyond finding places to smoke and places to sell, regulations theoretically don’t allow for 2016 tourist business at all due to tracking requirements.
Alaska marijuana businesses, including retailers, will be issued business licenses on May 24, 2016, roughly on par with the beginning of Alaska’s short summer tourist season.
Draft regulations, however, require a tracking number for every marijuana plant over eight inches in height to make sure they came from a legal, licensed source. Any sale-ready mature plants in May 24 will have come from illegitimate sources, as they’d been grown prior to the issuance of business licenses.
This means marijuana retailers and cultivators will have to populate their shelves with eight-inch plants beginning May 24, rather than open a fully stocked retail store. Retail stores won’t likely begin to fill shelves with legally grown product until September, at the tail end of the 2016 tourist season.
Marijuana tourism has grown in the Lower 48 states where recreational cannabis has been legalized, though the numbers are contested and the dollar figures hard to nail down.
In Colorado, tourists rival in state demand.
A 2014 Colorado Department of Revenue report estimated that out-of-state visitors made up 44 percent of retail sales in metro areas like Denver. In rural mountain counties where ski tourism is a main economic driver and local values are still fairly anti-marijuana, non-residents made up 90 percent of marijuana retail purchases.
“The retail demand is derived primarily from out-of-state visitors and from consumers who previously purchased from the Colorado black and gray markets,” the report reads.
The report doesn’t analyze how many tourists came to Colorado who wouldn’t have otherwise. Proving a direct causal link between marijuana legalization and tourism increases is difficult, but there’s plenty of evidence to prove a correlation.
Hotels.com has kept a running tally of travel searches in Colorado, Washington, and Oregon, and found significant increases in searches, if not travel.
After recreational sales became legal in 2014, Denver saw a 73 percent increase in hotel searches for check-ins during the April 20 weekend, the pot smoker’s holiday, compared to 2013. Denver became the 14th-most popular domestic destination for Americans, according to the Hotels.com Hotel Price Index. The entire state of Colorado saw a 51 percent increase in hotel searches from 2013 to 2014.
Similarly, Seattle saw a 61 percent jump in travel searches from the first half of 2014 to the second half when marijuana became legal.
From a cultural vantage point, marijuana tourism is plainly booming. Companies like Kush Tourism, My 420 Tours, and Colorado Pot Guide offer inside tours of marijuana grows and dispensaries, citywide cannabis-friendly limousine jaunts, recommendations for marijuana-compatible lodging, simple maps of reputable retailers, and even geolocation-based mobile apps that mark nearby cannabis businesses.
Spirit Air formed an entire “The Smoking Sign is Off” marketing campaign around Colorado legalization in 2014, advertising “fares so low they’re barely legal in some states.”
The trend extends beyond party buses, for the marijuana consumer of discriminating taste. Oregon dispensaries have begun marketing winery-style tours for cannabis farms, aiming for the existing Oregon wine connoisseur tourism market as a way to differentiate themselves from the state’s numerous retail businesses.