Downtown cannabis shop gets green light; moratorium debated

  • Jana Weltzin, owner of JDW Counsel and a specialist in cannabis law, told the Anchorage Assembly that the structure of state laws would make a moratorium on Downtown cannabis land use permits unnecessary because Alaska’s strict regulations already ensure a thorough vetting process. (Photo/Naomi Klouda/AJOC)
  • Nick Miller, an industry member of the Alaska Marijuana Control Board, answered several questions for Anchorage Assembly members about the process the body has undertaken to review Great Northern Cannabis and other applicants for retail shops. “The process is rigorous and thorough,” he told them. (Photo/Naomi Klouda/AJOC)

Cannabis shops located in Downtown Anchorage were the subject of more than three hours of debate June 27 at the Anchorage Assembly meeting, this time the pros and cons of permitting what is considered the largest operation in Alaska.

At the end of testimony from about 30 people, the assembly unanimously approved a marijuana license and special land use permit for Great Northern Cannabis Inc., in a vote of 9-0, with Assembly members Suzanne LaFrance and Fred Dyson excused due to illness.

Great Northern Cannabis, or GNC, will open in mid-July at 541 W. 4th Ave., a 3,200-square foot historic building between Once in a Blue Moose and Kumagoro Restaurant.

Bob Neuman, former owner of Rumrunners Old Towne Bar on E Street, brought the assembly a letter requesting to put a moratorium on downtown cannabis establishments. Members of the Downtown Partnership had signed it, including former Gov. Tony Knowles.

“There are no regulations saying how many or where they can be located,” Neuman told the assembly. “Why can’t we put this on pause and plan?”

Another downtown business owner, Wally Brooks, said he owns a building by the courthouse on West 4th Avenue, near the cannabis store Alaska Fireweed. For the past three years, he’s had a problem renting out office space largely because attorney tenants moved out due to “exorbitant parking fees.”

He also blamed prospective tenant loss on the “pot shop” Alaska Fireweed nearby, which opened a few months ago in February.

“When I show the space, they say ‘well I like your space but I don’t like your neighbors,’” Brooks said. “The last thing I need is another one.”

Though testimony made it sound as if there are a lot of cannabis operations in Downtown, Jordan Huss, one of the 23 GNC investors and the company vice president, noted there’s only one cannabis business operating and it will be the second cannabis store granted a license in the area.

Those opposing approval of the municipal permit to GNC were outnumbered by testimony favorable to the industry.

Hillary Fischer, the granddaughter of May Jefford, who established a Downtown gift shop during World War II that is still in operation, said she helps out at Once in a Blue Moose during summer’s busy tourist season.

“A lot of our tourists are happy to see (cannabis businesses) are open. Our elderly customers are curious, and they are more hip,” Fischer told assembly members. “They have their aches and pains, and ask ‘where can I get (cannabis) edibles?’ It might be illegal back home and they want to see a shop.”

Steve Brashear, the CEO of GNC, detailed plans for the new store.

“We don’t fit a stereotype. Our investors come from all professions, all walks of life,” he said. “We’ve already invested $3 million — $1.3 million to rebuild our facility.”

The other $1.7 million is invested in a cultivation operation that will supply all of the retail shop’s cannabis products. They plan to employ more than 25 people in addition to the 10 employees working on cultivation. The 23 investors include two physicians, former Anchorage Assemblyman Patrick Flynn and former legislator and gubernatorial candidate Andrew Halcro.

Well-established community members get involved in the industry for a variety of reasons. They bring different expertise, Brashear said. He is retired from the oil and gas industry where he was a longtime regulation compliance officer. He declined to say what company he previously worked for.

“I’m not a cannabis consumer. I became interested in the business side. I’m comfortable with the regulations and compliance in this new industry because I’ve had a lot of experience following complicated regulations,” he said.

“There’s still a stigma to this industry. A lot of companies may have a conservative view. I wouldn’t want to associate a previous employer with something they don’t advocate for and so I would rather leave them out of it.”

Because the federal government has not legalized marijuana, banks cannot loan investment funds to cannabis businesses. The $3 million for GNC was raised through private investors. And those investors had to feel it was a good risk, Brashear said.

Because it’s a new industry, all Alaska investors are essentially starting on the ground floor. No large companies have established a dominant hold on the market, Brashear said.

“It’s a rare opportunity for people to start out on an equal footing. It’s an exciting time to be involved in a new industry,” he said.

GNC is a vertically integrated business and therefore controls its own pricing from the point of cannabis cultivation to manufacturing its products such as oils and edibles, to cashier sales.

“It’s a good business model. You have control over quality, quantity and pricing and you can pass good pricing on to the consumer,” he said.

Assemblyman Christopher Constant, who represents Downtown, objected to testimony that erroneously stated multiple cannabis operators were open in the area. He asked numerous questions from his assembly seat of people who testified.

“If you stretch the boundaries a bit, there are two Downtown, counting another business down by the Lucky Wishbone,” he said. “One person said (in an email to the assembly) there were three on one block. Another one said 17, and that simply is not true.”

Some members of Downtown Partnership who signed the letter referenced by Bob Neuman withdrew their names from it after finding out the numbers it was based on were false, Constant said two days after the meeting.

He also challenged the request for a “pause” or further vetting cannabis openings in Downtown before the assembly issues more land use permits. The Downtown Community Council has actively taken a part in hearing proposals, making suggestions and keeping communication open with future operations, he said.

Each one must be licensed by the Alaska Marijuana Control Board in addition to other steps involved in meeting regulations. Tight state laws are already in place to monitor them, including the ability to shut one down in the annual license renewal requirement, Constant said.

The assembly left issues such as limiting numbers of businesses in any given area of town to “market forces to sort themselves out,” he noted.

One of the more conservative members of the assembly, Amy Demboski, also questioned those testifying.

“If there is a negative impact, there won’t be a license renewal,” she assured those objecting to GNC’s permit.

Jordan Huss, one of the investors whose expertise is in cannabis cultivation, worked through issues with the Anchorage Community and Economic Development Committee, of which Demboski is a member, to explain GNC’s plans. He credits the background work of these discussions to help bring even conservative members around.

“Twice now we appeared before them. We had good discussions,” Huss said. “We listen, we’re available and we’re actively involved in the community. She (Demboski) saw through the moratorium request because we’ve made two appearances before the committee, and she knows what we intend to do, that we are going to be good operators and contribute to the community.”

Assembly Chair Dick Traini, who represents Midtown, noted that most of the Anchorage cannabis businesses are in his area.

“There is no reason to treat Downtown differently,” he said.

Once renovations are complete on the building, GNC plans to have a “soft opening.” It’s taking longer and more money than expected to fix the former Alaska souvenir shop.

“It was built in 1945, and went through the (1964) earthquake. When we took possession of the building, there was more damage then we realized,” Brashear said.

When they lifted the building, they found the footings consisted of concrete poured into coffee cans.

“How it stood all these years is a mystery,” he said.

Architects and construction crews worked together to jack up the building and place a new foundation underneath. The building was gutted and rebuilt.

When it’s opened, the design calls for a front retail area for accessories, t-shirts and glassware related to cannabis. The back half will be the cannabis retail area, separated by a glass wall, with security posted at the entrance to each of the two sections.

“We’re on an aggressive schedule to capture some of the tourist season,” Brashear said. “We’re not done engaging with the community. That is part of being a good neighbor and we enjoy it.”

^

Naomi Klouda naomi.klouda@alaskajournal.com.

Updated: 
07/03/2017 - 1:55pm

Comments