Marijuana board wants to deschedule marijuana in face of illegal pot shops

  • Marijuana Control Board hears testimony from Alcohol and Marijuana Control Office enforcement officers during a Sept. 7 meeting. (Photo/DJ Summers/AJOC)

Legislative inaction and Alaska Attorney General Jahna Lindemuth’s recent opinion on marijuana social clubs are making waves for an industry an optimistic two months away from the first legal sale.

At a Sept. 7 meeting of the Marijuana Control Board, Lindemuth’s opinion squashed a scheduled discussion about onsite consumption for marijuana retail stores. It also rolled into the discovery of a network of unlicensed cannabis shops around the state and an industry-led push to eradicate them with limited resources.

Meanwhile, the Legislature still has not addressed several marijuana-related issues and left them to fester, creating a situation where marijuana enforcement officers have a hard time confronting unlicensed businesses.

Unlicensed pot shops

Lindemuth’s opinion has produced a rare moment of solidarity between regulators and industry.

According to Alcohol and Marijuana Control Office enforcement officers, stores around the state in Fairbanks, Anchorage and the Kenai Peninsula have been cropping up that sell marijuana without a license.

One of the industry’s most high profile attorneys, Jana Weltzin, drafted a letter imploring the Marijuana Control Board and its enforcement arm to more vigorously prosecute unlicensed marijuana sales.

From the licensed industry’s angle, unlicensed pot shops might as well be black marketeers. Because Ballot Measure 2 explicitly aimed to destroy the black market, Weltzin said unlicensed shops will give the Legislature all motivation it needs to declare marijuana legalization a failure in 2017 and repeal Ballot Measure 2.

“The time is now to make the transition,” wrote Weltzin. “Those who refuse to transition unilaterally risk the massive investment of time, money, and stress the rest of us as a collective movement have made. It is not fair to allow the selfish wants of a few to tank the entire industry and ruin this opportunity for the state.”

In the board’s eyes, this usurps the two years of regulatory effort on the part of the industry players currently waiting for their first sale.

“This is going to be a gold mine,” said board member Mark Springer. “To use that metaphor, who wants their claim jumped?”

Enforcement officers and AMCO staff saw the situation coming, and that it damages the upcoming legal market by offering the public a false start.

“This is not a surprise to anybody. It’s become so blatant that people are operating in small businesses with green crosses on the front clipping buds out in the open,” said James Hoelscher, the enforcement supervisor for the Alcohol and Marijuana Control Board. “The difference we see with this store front, they’re giving the public the perception that they’re legal, that they’re licensed. It’s our opinion that something needs to be done about this until it becomes too late.”

Hoelscher said the businesses continue to exist because local law enforcement has no appetite to make any enforcement actions of their own. Because AMCO’s offices are stretched thin on resources, they can’t either.

“It’s kind of a hot potato,” he said. “Not to put anybody on the spot, but it seems like it’s not something they want to deal with at the time. The response we’re getting is pretty much, it’s being allowed to happen.”

Cynthia Franklin, the director of the board and of AMCO, said prosecutors themselves don’t have an appetite to prosecute the cases either. “The prosecutors just aren’t interested in these kind of cases,” she said. “What we want the board to be aware of is unless we get some laws protecting the industry, our industry is going to be very vulnerable to these unlicensed actors.”

The root of the problem is marijuana’s classification as a controlled substance in the State of Alaska. This means there is not a specific crime for selling marijuana without a license, as there is for the alcohol-related crimes such as bootlegging. Franklin had tried to change the substance designation during the legislative session, but like the marijuana social club issue, it did nothing.

As it stands now, the only marijuana-related crimes concern possession over the statutory limits and other dealing-related crimes.

“We don’t have a crime called 'selling marijuana without a license,'” Franklin said.

To do so, the Legislature would have to make a statutory decision during its next session to remove marijuana a controlled substance under state law, thus making it mirror alcohol regulations. In the meeting, the board took the position that it would like the Legislature to deschedule marijuana.

Onsite consumption delayed again

Lindemuth wrote an opinion on Aug. 31 that marijuana social clubs, which charge a membership fee to consume home-brought marijuana on their premises, are illegal. She said they qualify as businesses, and therefore are unlicensed. The people who visit them, she said, clearly violate the ban on public consumption of marijuana.

In the AG’s opinion, this means two popular marijuana social clubs, Anchorage’s Pot Luck Events and Kenai’s Green Rush Events, violate state laws. Both have continued operating, and law enforcement from the state, local government or Alcohol and Marijuana Control Office have not yet taken any enforcement action.

The opinion responded to widespread uncertainty about whether social clubs are illegal. The Marijuana Control Board asked the Legislature to either create a social club license type or to ban them in late 2015, but no such actions was taken.

The board did, however, make a carve-out for onsite consumption in licensed retail stores in 2015. It had planned to review the draft for onsite consumption over the summer, but has bumped back approval each time in the face of widespread opposition from anti-smoking advocates including the American Lung Association and Alaska Tobacco Control Alliance.

This time, the board voted to postpone onsite consumption discussions again, this time until October, saying the AG’s opinion leads to too many questions.

“The AG’s opinion talked about what is a public place,” said Loren Jones, the board’s public health designee. “They conclude that if we as a board give them a license to consume, that’s now exempt from the definition of public. I’m not sure I agree with that. I’m not sure it would tested very well in court.”

The board voted 3-2 in favor of postponing the onsite consumption draft. Jones, Springer, and chair Peter Mlynarik voted in favor, while Brandon Emmett and new member Nick Miller voted against. 

DJ Summers can be reached at [email protected]

09/11/2016 - 9:13am