Marijuana industry criticizes city zoning

State cannabis regulations might be finalized, but Anchorage rules are just heating up.

The Anchorage Planning and Zoning Commission, which passes zoning recommendations to the Anchorage Assembly, wants to tone down a set of municipal land use rules that make state regulations look laidback in comparison.

The Alaska Marijuana Control Board finalized state regulations Dec. 1, but Ballot 2 specified local controls; cannabis businesses in the Anchorage municipality will have to go through a municipal licensing process as well, including an additional operator’s license and a conditional use permit.

Proposed zoning rules expand the buffer zones cannabis businesses must follow and assign several license types to scarce and expensive industrial zoning, as well as require community outreach plans for businesses.

The commission has a deadline recommend a finalized package to the Anchorage Assembly by Jan. 4, 2016. It plans to make several changes before that date, as commissioners largely agreed with various industry criticisms.

Fresh off the state package, Alaska Marijuana Control Board chairman Bruce Schulte told the commission the proposed plan treats marijuana businesses unfairly. 

“The proposed zoning regulations could best be defined as hostile to the industry,” Schulte told the commission. “If it is the intent of the municipality is to ban all things marijuana in Anchorage, fine, let’s do that. Let’s not use the zoning process as a backhanded way of doing that.”

Erika McConnell, the zoning and planning manager for the municipality, said the Assembly’s staff would rather err on the side of too restrictive than too relaxed.

“We have tried to take a conservative approach,” McConnell said. “We’ve taken a conservative approach to see how things go, and then relax the standards later when we see there’s no problem.”

Schulte was one of handful of industry stakeholders present who’d been heavily involved with state regulations, either as public commentators or as public officials, who showed up to argue similar points they’d brought up at Marijuana Control Board meetings. Overburdening the industry, some said, could bring in an industry-led lawsuit against Anchorage.

“Ballot Measure 2 delegated specific rights to local government but it also stipulated that rules, taxes, and fees could not be so burdensome as to make the lawful industry unfeasible,” said Kim Kole of the Coalition for Responsible Cannabis Legislation. “That could very well leave the municipality of Anchorage open to legal challenge.”


500 feet from parks

According to ordinance, business would not be welcome within 500 feet of Anchorage’s 223 parks, encompassing over 10,000 acres of municipal land in total. State rules only order marijuana businesses be kept 500 feet from child-centric establishments, halving the federal Drug Free Zone standard.  

 “You all know how many parks there are in town,” said Kole. “Once you put 500 feet around all of these additional municipal locations, businesses will essentially be zoned out of existence.”

Marijuana business attorney Jana Weltzin said Anchorage’s limited land doesn’t allow for such restrictions as it might in other states like expansive Arizona, where Weltzin formerly represented marijuana business interests.

“You should look at the state’s buffer zone list and just adopt those,” said Weltzin. “The topography of our land and the way we’re set up just doesn’t allow for us to sprawl out like other cities.”

Commissioners broadly agreed with industry’s complaints.

“I don’t feel that the separation from protected land use needs to be any more onerous than the state has them,” said commission vice-chair Anthony Cange. 


Industrial vs. commercial zoning

The proposal consigns cultivators, testing facilities, and manufacturers to industrial zones, which are both expensive and scarce in Anchorage’s limited land. Retail businesses would only be allowed in commercial zones.

Anchorage has a scarcity of industrial property. McConnell said the rationale behind disallowing commercial marijuana sales in industrial land was to save as much of it at possible.

Limited cultivators, who by state law are allowed up to 500 square feet of marijuana grow space, fumed at the proposal to stay in industrial zoning rather than commercial or residential. 

“You tell me where there’s a 500 square foot industrial space in Anchorage,” said Theresa Collins, owner of Anchorage marijuana club Pot Luck Events.

The Marijuana Control Board meant the limited cultivator license to allow for low-scale production; $1,000 for a garage-sized grow instead of the standard, unlimited $5,000 cultivator license.

Offering cheaper limited grow operations, the theory goes, will draw the estimated 5,000 Anchorage area small scale black market growers out of the darkness and into the regulated industry. Warehouse space is simply uneconomical for the small growers.

Schulte even advocated for a residential allowance for limited cultivators, though admitted the idea is “a tough sell.” The state board chair was uncomfortable with the concept of warehouse requirements for marijuana farmers entirely.

“There’s a finite amount of warehouse space suitable for cultivators,” said Schulte. “It almost guarantees a failure of this industry in Anchorage.”

Furthermore, the industrial zoning prevents a horizontally integrated business model.

Marijuana edibles manufacturers would also be relegated to industrial zones, which thwarts a hard-fought state regulation allowing bakeries to experiment with cannabis confectionary.

Retail marijuana businesses may only take place in commercial zones. A cannabis entrepreneur would not be able to open brewpub-style establishments that blend cultivation and retail, nor could they open confectionary establishments that blend retail and manufacturing.

Commissioners appeared to agree with industry, questioning the rationale behind zoning restrictions.

“I find it hard to wrap my head around separate locations,” said Cange. “I don’t see why retail and manufacturing can’t be co-located.”

“Admittedly, we have a problem with industrial land,” said commissioner Jon Spring. “I don’t think allowing commercial marijuana sale in I-1 (industrial zoning) is going to make a big difference.”


DJ Summers can be reached at [email protected] 

12/15/2015 - 6:12pm