First Western Alaska marijuana licenses to be taken up in Nome

  • Retired fisherman Robin Thomas is the first applicant seeking to start a marijuana dispensary in Nome, with plans to soon open his retail store soon if approved for his license when the Marijuana Control Board meets in Nome Sept. 14-15. Thomas and James Fejes of Anchorage are both seeking retail licenses for Nome that would be the first in Western Alaska and have already received the blessing from the city council. (Photo/Davis Hovey/KNOM Radio)

Though illegal marijuana sales continue to show up as arrests in the police blotters of rural Alaska, not many applicants have stepped up with requests to open legal dispensaries in those towns.

Two Nome businessmen want to change that on Norton Sound. Robin Thomas’ application to the Marijuana Control Board to open Gudlief and James Fejes’ application for Tundra Fire LLC are up for review before the board at its meeting in Nome Sept. 14-15.

City Manager Tom Moran said the Nome City Council has debated and granted approval for the two applications, with certain conditions.

“I don’t think public participation in the discussions has been enough to knock your socks off in either direction,” Moran said. “We’ve heard testimony from people giving more pros than cons. Usually supporters have tried to sway the planning commission and the council and there hasn’t been a lot of opposition.”

The commercial marijuana industry is authorized under an ordinance passed by the Nome City Council, Moran said, but they didn’t set zoning rules or a separate tax for it yet.

“We’ve taken a wait-and-see approach about those issues,” he said.

Thomas, a retired commercial fisherman, wants to open the first licensed cultivation facility in Nome this winter, figuring it could be the first in western Alaska.

Kotzebue has seen no license applications move forward from that hub town, said Tom Adkinson, a city official who operates the town’s only legal liquor store. Dutch Harbor/Unalaska doesn’t have one and neither does Dillingham, said City Manager Shawn Gilman.

Cary Carrigan, executive director of the Alaska Marijuana Industry Association, said there aren’t any legal dispensaries in western Alaska yet, “but there are plans.”

“A number of people are working on this, how to create their own supply so they can develop the retail for the rural demands through a legal system,” he said. “And that’s something I try to tell people: ‘By supporting legal growing businesses, you’re fighting against the criminal element. You’re fighting crime.’”

Thomas began the process in February for a grow operation in a 600-square foot building next to his home, and changed course to now add a retail license to open a facility, he said. He plans on cultivating 10 plants per week.

“I have a retail space 8-by-10 (feet) in my foyer, and it will be simple,” Thomas said. “There will be a menu for the customer to look at, and from there they can purchase. Everyone’s been waiting for over a year for me to get up and running.”

Fejes, an Anchorage resident and owner of Jimmy Blaze Entertainment, is planning on opening a dispensary on the historic Front Street in Nome. The Nome City Council took up concerns about his license application at an August meeting to decide whether it complied with keeping the required distance from the Check Point Youth Center.

The council found that it did comply. Both are now approved to open, pending the Marijuana Control Board’s approval, Moran said.

“There’s a bunch of wait-and-see going on that makes it difficult for people in rural Alaska: how to test by a lab, how to bring it in; there isn’t a lot of expertise out there,” Thomas said. “But I think there’s probably room for 10 more legal businesses like mine in the Norton Sound area.”

The rest of the agenda

In addition to renewing or approving licenses, the Marijuana Control Board will be looking at key measures after items were put out for public comment from the July 13-15 meeting in Fairbanks. After that packed agenda, they sent out about a dozen measures, but don’t expect debate over onsite marijuana consumption to be among them.

The onsite consumption matter — whether to allow public space for smoking and eating marijuana products — won’t be back for the board’s vote until its November meeting in Anchorage. It was set for an extended 60-day public comment period to allow for hearing from municipal governments.

Direct or indirect financial interests: Should landlords be able to take a percent of sales in-lieu of rent? Public comments are in and the board should be able to vote on the measure in Nome. At the last meeting, by a 3-2 vote, the board settled on a proposal to prohibit future license applicants from lease arrangements that include a percentage of revenue in exchange for rent.

Alcohol and Marijuana Control Office Executive Director Erika McConnell estimates at least 25 percent of the nearly 200 marijuana businesses across the state have this sort of lease arrangement. Some landlords take 5 percent to 20 percent of revenue in the grow operation, dispensary or other cannabis businesses in exchange for decreased rent, which is said to help because banks cannot loan money to the new business owners and many tenants occupied space for months before they were able to open.

McConnell asked the board to make a decision based on two proposals. One asked to eliminate percentage lease or rent agreements from “direct or indirect financial interest.”

The other option would have allowed a financial interest limit of 5 percent or less, and the landlord would then be required to undergo the same licensing review as the business owner.

After lengthy debate, the board agreed to adopt the first version prohibiting any percentage of sales agreements and sent the measure out for 30-day public comment.

Now the board could amend it or adopt it as is. If the board amends the proposal it will have to go out for comment again.

Ad watch: A dispensary’s ability to promote its facility is being refined in regulations.

Currently, many of the violations are related to advertising, said Enforcement Supervisor James Hoelscher in his last report to the board.

One of the intents of all advertising regulation is to avoid advocating or encouraging youth consumption of marijuana products, rural board member Loren Jones said.

But not being able to sponsor public events as a marijuana business “demonizes the industry so that they can’t participate in community-building events,” industry board member Brandon Emmett said in July.

The new regulations will specify that all promotions must take place inside the licensed business, not in a park or at a public event. New regulations also would separate business advertisement rules from product advertisement rules, if approved by the board.

Local control: Questions about local government jurisdiction also will be considered.

Currently, cities must be notified each time a license is granted to an operation in that jurisdiction. But the land-use authority may be a borough government and in rural Alaska, the local government in authority might be a Tribal entity.

A new regulation would require notification to go to all relevant local entities that have separate duties over authorizing land use and taxes.

The board will vote on whether to approve the new notifications.

Timing: The board looked at extending the amount of time for public comment on new or renewing marijuana license matters. They will vote at the Nome meeting on whether to remove the 30-day period and give no deadline to the objection or comment time period allowed.

The agenda for the Sept. 14-15 meeting is not posted yet, but check for its status at:  https://www.commerce.alaska.gov/web/amco/MCBMeetingDocuments

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

Updated: 
09/06/2017 - 1:12pm

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