Unresolved legal issues, bans still loom for cannabis industry

Courts, cops, lawyers and the Legislature are each holding one piece of the Alaska cannabis puzzle that doesn’t yet fit together.

The industry is partially divided over how to deal with a rash of unlicensed pot shops, which touches on high-profile drug distribution cases the state has pursued since 2015.

Meanwhile, the Mat-Su Borough found itself on the receiving end of a lawsuit regarding the petition to ban commercial cannabis in unincorporated areas of the borough, and the Kenai Peninsula only barely gathered enough signatures for its own such ban, which has yet to be scheduled.

Open cases

Enforcement staff from the Alcohol and Marijuana Control Office, or AMCO, asked the Marijuana Control Board to look for ways to prosecute a half-dozen unlicensed retail shops selling product in Fairbanks, Anchorage and the Kenai Peninsula.

Cannabis business attorney Jana Weltzin penned a letter to the board asking it to do everything possible to protect the industry players who have spent time and money to go through the licensing process.

The quickest fix would be for the Legislature to take marijuana off the state’s controlled substances list, allowing AMCO to bring charges of selling a regulated substance without a license as in alcohol regulations.

“The promptness of the resolution of these problems is 100 percent dependent on the industry itself,” wrote AMCO and board director Cynthia Franklin in an email. “The industry needs to protect themselves from illegal competition by working to get a legislative solution.”

Peter Mlynarik, the Marijuana Control Board chair and Chief of Soldotna Police Department, said law enforcement agencies may not have either the resources or the will to investigate and enforce the many complaints against unlicensed sellers. 

“Let’s say local enforcement said it’s not a priority,” he said. “You would have to quadruple the staff at AMCO to have all those complaints investigated. All those things take time. If it’s non-commercial, you’re talking search warrants and all these other things, reasonable suspicion, to get in there and do something. It’s a lot more time consuming.”

Franklin said AMCO would need triple their current staff to properly take care of the unlicensed shops.

Given law enforcement’s lack of enthusiasm, others under state criminal charges cry foul over their own cases.

Charlo Greene, whose legal name is Charlene Egbe, voiced concerns about why law enforcement has chosen to prosecute her operation, Alaska Cannabis Club, but not the unlicensed sellers discussed during the Sept. 7 Marijuana Control Board meeting.

“It’s not a shortage (of law enforcement), they’re just picking and choosing who they feel like punishing,” she said.

Greene’s operation, Alaska Cannabis Club, was raided by police twice in 2015 following her well publicized on-screen and profane departure as a broadcast reporter for KTVA.

Greene insists her club never sold cannabis and is more akin to a marijuana social club — which were recently declared illegal in an opinion from Attorney General Jahna Lindemuth but no owners have yet been charged with any criminal wrongdoing — than either an unlicensed retail shop or two alleged marijuana delivery services charged around the same time in 2015.

“We never publically stated that we sell any marijuana,” she said. “Period, point blank. That’s the main difference. These other organizations have.”

Despite Greene’s distinction, the state is charging her with drug distribution along with the marijuana delivery companies. This brings up a matter of legal importance to her own case.

“What exactly has changed between now with these other clubs and mine, is what I’m having a hard time understanding,” said Greene. “Why am I the only one operating one of these groups that’s being prosecuted if they have all this documentation proving these other ones exist? My prosecution is political. I am undergoing a selective prosecution if that’s the case.”

Selective prosecution or an inconsistent application of the law could become a factor for Greene along with other cases.

The state charged Rocky Burns, Larry Stamper and Michael Crites with running their respective alleged marijuana delivery services, Discreet Deliveries and ACDC.

John Skidmore, the Anchorage Division director for the Department of Law, said the state’s prosecution of the previous criminal cases could factor in the new regulatory developments, if the Marijuana Control Board and the Legislature choose to move in that direction.

“When policy makers in society decide to change the laws, is that a consideration for prosecutors in cases that are already pending? The answer is yes,” he said. “Does that automatically mean that those prosecutions go away? That answer is no.”

Similar situations exist in other areas of law, Skidmore said, particularly after criminal reform bill Senate Bill 91 passed during the 2016 Legislative session. After that bill passed, criminal prosecutors for offenses like failure to appear in court or violation of jail release terms needed to reevaluate their cases, as the bill lessened penalties for those offenses.

Skidmore said he has no knowledge of any enforcement officials bringing the alleged unlicensed marijuana sellers before the Anchorage division.

“I would probably wait for the policy makers to finish their work,” he said. “Then we would want to analyze what were the rationales and reasons behind why they adopted that particular policy to help us evaluate what are the societal interests of pursuing or not pursuing the prosecutions of cases that are not resolved.”

Skidmore was careful to clarify both that the state hasn’t yet convicted Charlo Greene, Rocky Burns and Michael Crites, and that speculation on legal developments should be tempered.

Changing the pace of prosecution, he said, could all be part of the industry’s development process.

“Some of this is growing pains and transitions as the marijuana industry gets going,” Skidmore said. “That’s certainly going to factor into what we factor into prosecution as well, and the decision whether or not to prosecute, would be, ‘is this part of the transition?’”

Bans and licenses

In Southcentral areas outside the Anchorage municipality, marijuana business license applicants are vying to get more time to prove to their respective local governments that they can bring in enough money to make the industry valuable as a tax base.

Industry representatives in the Mat-Su Borough are suing over a proposed ballot initiative scheduled for an Oct. 4 vote that would outlaw commercial cannabis business in unincorporated areas.

Only Houston would be marijuana-friendly, as Wasilla and Palmer both passed commercial cannabis bans. In the meantime, a temporary moratorium on commercial marijuana passed in April, squashing production in what is largely regarded as the state’s largest cannabis-producing area.

The two people representing themselves in the lawsuit, Ronda Marcy and Thomas Hannam, claim the ballot violates both the public process and the Alaska constitution.

“The Matanuska-Susitna Borough Clerk, Lonnie R. McKechnie, was ‘objectively unreasonable’ to permit the proposed zoning initiative to be placed on the Ballot, when the Supreme Court of Alaska provided written notice, in a case under her name, that ‘zoning by initiative is invalid,’” according to the lawsuit.

Borough cannabis licensees have a tight timeline. Darcy and Hannam, both of whom had hoped to enter the industry, are asking for an expedited consideration of the lawsuit.

Another agricultural hub for the cannabis industry, the Kenai Peninsula, is also waiting for word on a proposed ban.

Petitioners on the Kenai Peninsula Borough, whose ranks included board chairman Mlynarik, failed to gather enough signatures to get a commercial cannabis ban onto the October ballot. On Aug. 15, the petitioners got enough signatures to put the initiative onto the ballot either at the borough assembly’s discretion or on the October 2017 ballot. 

In order to get the initiative onto the 2016 ballot, the borough assembly would have to hold a special election, estimated by borough staff to cost as much as $60,000.

DJ Summers can be reached at [email protected].


09/15/2016 - 11:53am