At long last, Alaskans can buy legal marijuana

First retail sale made in Valdez
  • On Saturday, Oct. 29, Valdez’s Herbal Outfitters’ staff prepares to open Alaska’s first marijuana retail store. (Photo by DJ Summers / AJOC)
  • On Saturday, Oct. 29, Michael Holcombe makes the first purchase from Valdez’s Herbal Outfitters, the first marijuana retail store open in Alaska. (Photo by DJ Summers / AJOC)
  • Residents from across the state trekked through snow and ice to see the first marijuana sale in Valdez. (Photo by DJ Summers / AJOC)

On Oct. 29, nearly two years after Ballot Measure 2 legalized adult use cannabis in Alaska, the retail store Herbal Outfitters opened in Valdez, a small town a half day’s drive from Anchorage. This marks the first retail store opening.

Fairbanks’ Pakalolo Supply Co. made a ceremonial legal cannabis sale the day before.

Those who braved the chill and drizzle to cluster around the store's entrance said two years was worth the wait.

“I’ve been waiting 46 years,” said Michael Holcombe, a Valdez retiree who can still remember blowing pot smoke at cops while waiting in line for the Rolling Stones and Stevie Wonder. Holcombe was the first in the store to make a purchase.

Others caravanned through Alaska’s mountains and icy October roads to see history in the making.

“We wanted to be part of the crowd that bought the first legal weed in Alaska,” said Christopher Front, who traveled from Anchorage with his wife Hannah and dog, Daisy.

“She wanted to be the first dog,” he added.

For Alaska’s first sale to happen in Valdez, instead of population centers like Anchorage or Fairbanks, surprised even the owners.

“We never anticipated that we’d be the first legal sale,” said Derek Morris, Herbal Outfitters’ general manager. “That’s still a little bit of a shock to us.”

Valdez’s previously claim to fame, beyond its small town charm and scenic beauty, was as the site of the infamous Exxon Valdez oil spill. That spill funneled federal disaster relief funding into Alaska at a time when the state was undergoing an oil-driven economic recession worse than but similar to the one Alaska is in now.

Now, Valdez will mark the beginning of an industry that has raked in hundreds of millions of states taxes in Colorado, Washington and Oregon.

Bluntly speaking

The road to the first legal joint has been a stony one.

What is a blazing new industry in the Lower 48 has strained to grow in Alaska. Lack of capital and banking restrictions have given industry little financing with which to get rolling. Local authorities have not always been kind, with several ongoing municipal and borough wide bans causing chronic political battles. Budding entrepreneurs have taken a hit in their pocketbooks due to zoning restrictions and local regulations that demand fat up front investments before sales even spark up.

Like other Alaska businesses, Morris said the company had a sticky time getting onto its feet since first applying for a license in Feb. 2015, though he insists the local Valdez government and citizens were more welcoming than in other areas.

“It’s been a bumpy road,” said Morris. “There were a lot of zoning and ordinance laws, particularly with regulations in the store… but the local community’s been very supportive.”

Morris formerly worked in Colorado’s legal industry managing Maggie’s Farm, one of the state’s largest suppliers. He said he came to Alaska for a change of scenery and a change from what he saw as too much greed in the Colorado scene.

Even for someone as experienced as Morris, the first sale has an emotional impact. “Our nerves are a wreck,” he said. “Our anxiety is high. But our hearts are full.”

Herbal Outfitters carried two merchandise from two cultivators: Greatland Ganja from Kasilof and Green Rush from Sterling.

Arthur Able, one of Greatland Ganja’s owners, said the first sale is a milestone.

“I’m just ecstatic,” he said. “Super excited about the actual beginning of the industry. After this everything gets better. Every transaction will get smoother. The grows will get more streamlined and better quality.”

4/20 friendly, $420 not so friendly

Legal Alaska pot isn’t cheap — yet.

Patrons pay $420 per ounce or $22 per gram at Herbal Outfitters — a cute price considering the product, but also roughly $100 dollars more than what the black market charges for similar mid- to high-grade merchandise.

This high price reflects an incomplete supply chain, not a new status quo of expensive product feared by some medical marijuana activists before Colorado legalized in 2014.

With only one retail store open and only one Anchorage tester funneling cannabis into a limited number of ready-for-market stores, the price point starts off high.

Prices sink dramatically as cultivators and retailers become more established and the consumer demand funnels into stores away from the black market.

When Colorado opened legal adult use sales in 2014, Denver metro area prices averaged $323 per ounce or according to survey performed by Colorado Pot Guide. Outside the Denver area, the price rose to $367 per ounce. By October 2016, that price cut roughly in half.

A similar scenario played out in both Washington and Oregon. When Washington sales opened July 2014, the average statewide price per a gram was $25 to $30. That number fell to $10 per gram by 2016.

Able said he expects product to get cheaper over the next year. “Definitely in the first year,” he said. “The factor is going to be more related to the amount of grows coming online than the timeline.”

DJ Summers can be reached at [email protected]

11/06/2016 - 3:34pm