The Anchorage Ban on Pot Clubs

City regulators want more control of the state’s marijuana industry than afforded by the Marijuana Control Board regulations.

Dual licensing being drafted by the municipality's marijuana taxation and regulation committee would require Anchorage marijuana businesses to apply for a municipal license as well as a state license. Industry hopefuls say the process is redundant, while city officials say they want more control of an industry that’s still federally illegal. The ordinance could possibly outlaw marijuana clubs or cafes in the city, as well as impose additional testing requirements for retailers. 

Committee chairman Ernie Hall said the city is still waiting on the finalized state regulations before nailing down the city rules. The Marijuana Control Board finished these in December. Lt. Gov. Byron Mallot is expected to sign them into regulation Jan. 24 after the Department of Law finishes reviewing them.

“We’re still in a kind of never never land,” said Hall. “Until the state regulations come out and the lieutenant governor signs it, we’re still kind of in limbo.”

The Anchorage Assembly is expected to vote on the ordinance on Jan. 26.

“I want everybody to understand that this ordinance is being introduced. Don’t panic. There’s a process yet for this,” said Hall.

Municipal attorney Bill Falsey said the city’s intent is to focus on retail marijuana licenses to give Anchorage more control of the industry; much of the cultivation will likely be done elsewhere not subject to the city’s oversight.

The ordinance would allow city officials to inspect and levy fines for marijuana business violators – just as in state regulations, which fine violators up to $10,000 – but Falsey said they’ve engineered a staggered fine structure to keep fines light for lighter offenses.

“Ours will be tailored to different provisions,” said Falsey. “We’re going to have smaller violations with smaller fines, larger violations with larger fines.”

Bruce Schulte, the chair of the Marijuana Control Board and ex officio member of the committee, wondered why the city should have so much control beyond collecting revenue from fines.

 “Why wouldn’t we just defer to the state?” asked Schulte. “I’m not sure what value we gain other than money into the city coffers. Or is that the goal?”

Falsey said city enforcement should be able to enforce state regulations, as well as their own extra regulations, without having to go through the state board.

“As we have municipal code enforcement doing purely municipal things,” said Falsey, “they may stumble on infractions on the licensing and regulatory side. When we have someone in power to do enforcement, they should be fully in power to enforcement.”

The draft ordinance would ban both marijuana clubs and onsite consumption licenses, the latter of which the state specifically allows. Falsey said the language is conservative only because the Assembly wanted to discuss the matter. A ban is simply the vehicle to bring the issue up when the Assembly meets, a procedural necessity.

“The Assembly has asked that these issues be brought back to it,” Falsey said. “We know these questions are coming back to the assembly one way or the other.”

The city already has an indoor smoking ban, but it has workarounds including private smoking clubs, the structure for which existing marijuana clubs already resembles.

Falsey said the Assembly might want its own ordinances regarding clubs and cafes. Its take could differ from the state’s, whose allowance for an onsite marijuana consumption provision was not unanimous in the first place.

“The onsite consumption and smoking clubs were highly contentious in the state regulatory discussions,” said Falsey. “Alaska is now currently the only jurisdiction anticipating whether or not there are marijuana café. Certainly the more conservative way would be to fall back on the Colorado Washington Oregon approach.”

The city’s dual licensing requirement stems, in part, from a desire for local control. The city wants its own enforcement to have authority to penalize marijuana businesses for infractions. This means mirroring some of the state’s licensing requirements in municipal code, as well as adding others where the city feels the state regulations are too lax.

“In looking at this, there seemed to be a lot of synergies and efficiencies to be gained mirroring aspects of the state’s regulations already in municipal code,” said Falsey.

Under the draft ordinance, city compliance officers could penalize marijuana  business for state issues like security, but also for new infractions.

The ordinance proposes a ban on 59 different pesticides in marijuana cultivation. City compliance officers could spot check retailers’ producst to see if pesticides are present.

Hopeful marijuana retailers agreed with the sentiment, but not with method. The system makes retailers responsible – at $500 dollars a pop – for a cultivator’s use of forbidden pesticides, and burdens the unwitting retailer with a stock backlog.

“Cultivation sends samples, gets it tested,” said Kim Kole, a member of Coalition for Responsible Cannabis Legislation. “Retail has to sit on that product, and send out another sample for the testing facility again? It’s completely redundant and inefficient.”

Falsey admitted the final ordinance would have to account for industry advice and said, “We want to start the conversation going early.”

The state marijuana board already pays out a portion of its licensing fees to the locality where the license is held, so the municipal license will come at no charge.

“The state ballot language requires that half those license fees come to us. Because we are due to receive 50 percent,” said Falsey, “our proposal in this ordinance is to charge nothing.”

DJ Summers can be reached at [email protected]

12/06/2016 - 4:28pm