Marijuana board will revisit onsite consumption at July meeting

  • This Jan. 18 photo shows marijuana for sale at Rainforest Farms, owned by James and Giono Barrett in Juneau. The Barrett brothers hope that some of the scores of cruise ship passengers who crowd the streets of the state capital each summer will one day use their shore excursions to kick back and light up a joint in a pot store’s lounge. That hope is on hold as the state regulatory board is going back to the drawing table with onsite consumption proposals at its July meeting. (Photo/Mark Thiessen/AP)

The Alaska Marijuana Control Board will discuss three options for onsite consumption proposed by board members at its next meeting July 11-14 in Fairbanks.

• Scenario 1: You walk into an establishment where it’s okay to smoke marijuana. There are no pool tables, no dart games, no televisions. Just couches or chairs and coffee tables for a social ambiance. “This space is to try marijuana or a marijuana product and then to leave,” according to board member Loren Jones’ proposal.

• Scenario 2: You walk into an establishment where it’s okay to eat cannabis products such as candy, cookies, brownies, etc. But it’s not okay to “inhale” or smoke marijuana on the premises under the proposal by Solodtna Police Chief and board Chair Peter Mlynarik.

• Scenario 3: You walk into an establishment where it’s okay to smoke and eat cannabis products. Similar to rules governing bars, employees watch for people who over imbibe. Consuming marijuana not purchased at the location is prohibited. To mitigate second-hand smoke and odor the facility must invest in a good ventilation system under the proposal by member Brandon Emmett.

Several businesses have filed applications for onsite consumption, indicating they are ready to go once licensing is in place, according to their applications: Pakalolo Supply Co., (Fairbanks) Alaska Fireweed (Anchorage), Remedy Shoppe (Skagway), Cannabis Corner (Ketchikan) and the Green Elephant (Juneau), Stoney Moose (Ketchikan) and the Rainforest Cannabis (Ketchikan).

But an onsite endorsement by the board isn’t likely until 2018, said Emmett, an industry representative from Fairbanks.

That’s because the matter won’t come up for vote until the August hearing at the earliest, following a 30-day public comment period.

“The language must be put out for public comment,” MCB Executive Director Erika McConnell wrote in an email. “The board then sees the language and the comments. If the board makes substantive amendments to the proposal, it must go out for public comment again.”

At the time when they make no substantive amendments, the board may adopt the regulation. Then it goes to the Department of Law for review.

“Assuming it is all ok with DOL, it goes to the Lt. Governor’s Office for signature. The regulation change becomes effective 30 days after being signed by the Lt. Governor,” McConnell wrote.

Emmett brought on-site consumption back to the drawing table in March, after it was tabled by a 3-2 vote at the February meeting. The March “aye” votes came from members Emmett, Mark Springer and Nick Miller.

Back in February, when dropping the onsite regulation was approved, the “ayes” were members Mlynarik, Jones and Mark Springer.

Jones, who suggested a two-year moratorium for onsite consumption in his proposal, cited what he called overwhelming public testimony opposed to such establishments. Springer spoke about “going slow” and staying out of the spotlight while seeing what happens on the federal level.

“We have a new administration in Washington and a new attorney general who has made it quite clear that is more friendly with the KKK than he is with marijuana,” Springer said, according to the meeting minutes, referring to a joke by Jeff Sessions in the 1980s when he said he thought the KKK was OK until he found out they smoked pot.

Members expressed concern that allowing onsite consumption would wave a red flag at federal officials who may be inclined to crack down on states that have legalized recreational use.

“We don’t want a million people getting off of cruise ships in Juneau saying it’s great that they went to half of the stores and were able to smoke marijuana,” Springer said.

Taking it off the table related to a technical error in the public notice process. After it was put back on, McConnell requested the board work from a single proposal after receiving three.

“When people voted yes on Ballot Measure 2, they voted to regulate it similarly to alcohol, and consumption venues are part of that,” Emmett argues.

In its newest incarnation, three board members proposed drafts for onsite consumption regulations.

Jones, who holds a seat reserved for a member of the public on the board, wants clear delineation between retail and consumption. He also would disallow any TV, pool tables, darts, or the like in the consumption area.

Mlynarik’s draft allowed on-site consumption but applied certain restrictions, including prohibition against smoking. He said he wanted to address concerns from the public about both second-hand smoke protections for employees and the public municipal laws that outlaw smoking in public places.

Emmett’s proposed draft would allow on-site consumption separated from retail and carry myriad rules similar to bars. Local consent from authorities and annual renewal would be other conditions for monitoring the establishment.

“We’re trying as a board to create a new regulation after the first project went by the wayside,” Emmett said. “There was a lot of comment by the people that wanted a smoke-free work environment. We’re trying to look at how we can craft legislation for those concerns and others that were expressed. Our goal is to come up with something — or nothing. “

The current “project” is essentially starting over.

The public will not be able to comment on agenda items at the Fairbanks meeting in July. But they will be able to send in public comment between now and then, addressed to marijuana@alaska.gov

Lengthy agendas

According to the most recent tally, Alaska issued 198 marijuana licenses statewide between Oct. 5, 2016 and May 15.

McConnell said there isn’t a backlog in new businesses needing licenses to operate. But the board runs out of time to deal with regulations such as putting onsite consumption to a vote because there are many licenses to approve at each meeting.

To accommodate all the activity, the July meeting will be the longest since the board’s creation covering three days at the Fairbanks North Star Borough Assembly Chambers at 901 Airport Way.

“The board opened almost a dozen new regulations projects at their May 15 meeting, and consideration of existing open regulations projects had to be postponed twice (April and May),” McConnell wrote in an email.

The board’s addition of a third day to their July meeting is to make sure they are keeping up with both the applications and the regulations projects, McConnell said.

Other matters considered by the board at the May 15 meeting:

Handler permits and transportation regulations: Mlynarik sponsored a regulation meant to clarify cases where a handler permit cannot be issued: if a person had a felony conviction less than five years previous or if the person is on probation or parole for a felony.

A permit would also be denied in cases where the applicant had a misdemeanor conviction of distributing marijuana, or is currently under indictment, or fails to disclose previous relevant criminal history.

In the same regulation section, Mlynarik also seeks to simplify transportation transactions. Under current law, a licensee of one type cannot transport cannabis products to a licensee of another type.

“We are trying to clean them up to allow more versatility for transporting product. Right now it’s pretty restricted,” Mlynarik said. “Right now (regulations) allow a cultivator to take marijuana to a retailer, but a retailer can’t take it back to the cultivator. The changes will allow more free flow between license types.”

If it passes, all license types would be able to transfer to one another.

Lowered tax on “shake” products: The board approved a measure asking the Alaska Department of Revenue to lower the tax currently applied to the shake, or flower of the cannabis plant. That measure is now awaiting approval by the Department of Revenue.

If approved, a levied $15 tax per pound will drive down prices on concentrates, which also are often used for medical conditions and food items.

Emmett, an industry representative on the board who has a manufacturing license, proposed the reduction. Currently, under the $50 per pound tax, the shake portion of the plant is often worked into stems and leaves mixtures because it’s not advantageous to sell. Ten pounds of flower make one pound of concentrate. At $50 tax per ounce, it adds up to a hefty sum, he said.

“If you are already paying $8,000 for 10 pounds before you get any revenue, then it comes to a point that concentrate manufactures will destroy it (the flower) if its not up to the standard of the competing products on the market,” Emmett said. “A drop in the bucket is better than a dropout. If it’s not sold at all, it brings in no tax revenue.”

Between now and the July public members can write to the Marijuana Mailbox to make comments on any proposed regulation or other matter related to cannabis operations.

Naomi Klouda can be reached at naomi.klouda@alaskajournal.com.

Updated: 
05/24/2017 - 12:42pm

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