Marijuana bill stalls in conference over rural opt-out

A bill standing in the way of marijuana license applications is still deadlocked in Conference Committee, as legislators argue over a bill provision that would opt rural Alaska villages out of commercial marijuana.

House Bill 75, introduced by Rep. Cathy Tilton, R-Wasilla, and its Senate companion, a committee substitute Senate Bill 14, remain under consideration after an April 13 hearing that underlined disagreements but brought no conclusion. The committee broke to compile more information regarding unorganized villages that have opted out of alcohol sales.

The bill would change statutory language to allow the Department of Public Safety to request federal background checks for commercial marijuana license applicants. A similar provision is included in SB 165, scheduled for a April 14 hearing in the House Judiciary Comittee at 1 pm, which could bypass HB 75 gridlock.

Marijuana Control Board director Cynthia Franklin says the bill is necessary to process applications, as she isn’t comfortable completing licenses without a federal felony check. As per Alaska statute, felony convictions bar applicants from obtaining a commercial marijuana license.

Both legislators and Marijuana Control Board chairman Bruce Schulte say they’ve received mixed input about whether they actually need the federal background check provision to be changed in statute and whether the specific background checks are needed at all.

Marijuana industry attorney Jana Weltzin has threatened to bring a lawsuit against the state if it continues holding licenses if the bill doesn’t pass, calling federal background checks a “red herring.”

“There are dueling legal opinions right now,” said Sen. Lesil McGuire, R-Anchorage, one of the three senators on the conference committee.

“One theory is that we actually have to put into statute a requirement to authorize the Department of Public Safety to authorize federal background checks.

“There’s another theory that says you don’t need that specific authority, it’s implied,” she said.

Regardless, legislators said the bill’s background check provision is a must-pass. McGuire said, the Marijuana Control Board “itself has decided they don’t feel comfortable relying on the legal opinion,” and marijuana license applications are being held until HB 75 background check provision is implemented.

Rep. Charisse Millett, R-Anchorage, said she hopes the Senate would consider dropping the most contentious bill provision if the chambers can’t agree, in order to remove the marijuana industry’s licensing roadblock.

The sticking point concerns rural Alaska villages.

The Senate bill would automatically opt unorganized borough villages out of commercial marijuana, as opposed to the rest of the state where statute makes commercial marijuana legal unless localities opt out. Village elders would have their own discussions about whether or not to allow marijuana businesses and decide whether or not to allow them.

“There are good parts of this bill,” said Millett. “I don’t feel like we should let good work go to waste because we can’t agree on that.”

Sen. Lyman Hoffman, D-Bethel, swayed the Senate in favor of the automatic opt out.

Lyman said rural Alaska’s experiences with alcohol regulations that opted villages in leave a bitter taste in village mouths, producing violence and social problems. He said they want to make sure they don’t repeat the problems with cannabis.

“Title 4 (alcohol regulations) was flawed,” Hoffman told the conference committee. “It started out with those communities wet, and they had to go through all that pain and suffering.”

Hoffman prefers that villages start on the automatic opt out side so they can more carefully control the industry, if that is the elders’ and communities’ wish. Hoffman points to the number of unorganized borough villages that have opted out of alcohol as evidence that an automatic opt out would be safer.

“They would have never had to go through that suffering and pain if Title 4 was flipped,” he said.

House representatives felt that Hoffman’s concerns are legitimate, but that the realities of the marijuana industry make rural Alaska fears a moot point.

Rep. Harriet Drummond, D-Anchorage, said that the expense of starting a marijuana business in general makes her question whether any cannabis operation will appear in rural Alaska anyway, and that village elders should instead focus on the black market.

Retail businesses and grow operations demand capital and consumers. Moving the product either to an urban retail outlet or the required testing facilities, for which there are few license applications concentrated in Southcentral Alaska, would preclude the likelihood that marijuana businesses will crop up in rural areas.

“Consider what it would take for a marijuana business to establish itself,” said Drummond. “I doubt that anyone is going to start a growing operation in a village of 200. I don’t think that opting out will be an issue because of the difficulty of establishing a marijuana business anywhere. It’s difficult to do in Spenard.”

Hoffman agreed, but insisted the elders and village councils have the opportunity to discuss those issues amongst themselves before marijuana businesses are approved.

“Those are the exact issues and dialogues that need to take place at the local level,” Hoffman said. “Why can’t we have those discussions in our communities? Just give us the opportunities to have that debate.”

Drummond said the village elders would be in the mix anyway. Marijuana businesses in her home district of Spenard, which has both the highest concentration of alcohol licenses and marijuana license applications in the state, regularly confer with local community councils at the beginning of the licensing process.

The conference committee adjourned to compile a list of villages that have opted out of alcohol and will reconvene at a later date.


DJ Summers can be reached at [email protected].


04/14/2016 - 10:34am