Marijuana board carries on with new member after federal shift

The Marijuana Control Board approved more than 22 new business licenses at its Jan. 24-26 meeting in Juneau, and continued to wade through public safety and new federal scrutiny on the state’s legal marijuana commerce.

The board also voted in a new chair after former chair and Soldotna Chief of Police Peter Mlynarik resigned Jan. 4.

Former Vice Chair Mark Springer of Bethel, who has the seat designated for rural Alaska, was voted unanimously as the new chairman, while Brandon Emmett, who holds one of two industry seats, was named vice chair.

North Slope Borough Police Chief Travis Welch, who replaced Mlynarik, participated in his first meeting after being appointed by Gov. Bill Walker on Jan. 19. He still has to be confirmed by the Alaska Legislature.

Solutions are still being sought to protect public health while the board gets a handle on inconsistent THC testing levels and the finding of hazardous aspergillus mold that showed up in some marijuana harvests.

A committee is at work setting new testing standards after holding its first meeting on Jan. 17. Its task is to find a standardized way to ensure safe, accurately labeled products are sold at stores.

One major change ahead is the introduction of new testing by the Department of Environmental Conservation Health Lab, Executive Director Erika McConnell told the board.

“Part of the (lab’s) job is to audit various private labs around the state (such as drinking water labs) so they have trained lab auditors on staff,” McConnell said.

CannTest and Steep Hill, both Anchorage marijuana testing labs, “have promptly provided information requested to the state lab,” McConnell said in her director’s report.

The audit will be finished in a couple of weeks.

The board on Jan. 2 issued a consumer alert that warned inconsistencies in testing meant the public needed to be aware that THC levels may not be what’s as labeled on products.

In another case, one testing facility found a potentially dangerous mold on a product but the other testing facility failed to detect it, the alert stated. Neither testing facility is named.

After that, the Alcohol and Marijuana Control Office, or AMCO, received a letter from Steep Hill’s attorney, Birch Horton Bittner &Cherot, telling the director they objected to wording in the PSA.

The letter states that Steep Hill — part of a national consortium of labs — was concerned the PSA is “overly broad, lacks specificity, and is not a proper scientific or legal conclusion” that maligns the testing lab’s reputation.

Steep Hill’s letter asks for AMCO to rescind its alert and issue a revised and clarified statement.

McConnell asked the board for direction on whether to rescind and revise the alert, but the board took no action. Because the alert came from the board, approval to rescind and revise it needs to come from the board, she said.

The board acknowledged the letter, but chose not to respond, Springer said.

The board also gave McConnell permission to allow marijuana that is found contaminated by the aspergillus mold to be made into concentrates. The process of distilling kills the fungus and allows the cannabis to be used rather than destroyed.

McConnell said the board’s action authorized her “to allow harvest batches that fail for aspergillus to be sent to a concentrate manufacturing facility to be used to make a concentrate, as long as the concentrate made from the moldy harvest is tested for microbials.”

This could save entire harvests from needing to be taken off the market at potential huge revenue losses for the cultivator.

This was the first board meeting to take place in the aftermath of U.S. Attorney General Jeff Session’s memo that rescinded previous federal policy toward legal marijuana operations in states.

Sessions rescinded the “Cole Memo” written in 2013 that established a federal policy of non-interference in marijuana operations legalized at the state level as long as federal priorities were followed such as keeping drugs out of the hands of minors and protecting against involvement by criminal elements.

In an early statement to the board Jan. 24, Alaska Deputy Attorney General Harriet Milks, who sits in on each meeting to provide legal advice, recapped the state’s intention to move forward. She quoted the Alaska U.S. Attorney Bryan Schroeder as saying current enforcement priorities will not change.

“The U.S. Attorney’s Office for the District of Alaska will continue to use the long-established principles of federal prosecution to determine what cases to charge,” Milks quoted from Schroeder’s statement. “One of the key principals is to follow federal law enforcement priorities, both at the national and local levels. The highest priorities of the U.S. Attorney’s Office in Alaska are consistent with those of the Justice Department.”

Milks also referenced a letter Alaska Attorney General Jahna Lindemuth and 18 other attorneys general from across the country sent to Congress Jan. 16 in the wake of Session’s memo. It seeks legislative action to expressly allow banks to provide services to marijuana businesses operating in compliance with state law.

“Allowing banks to work with these businesses is good policy,” the letter states. Federal legislation allowing transactions to occur through the banking system is an important step to enabling state regulators to do what voters have asked, Lindmuth’s letter stated.

The board then briefly discussed their support of such changes that would make the industry safer from black market and criminal elements.

Regulations passed

The board passed an amended regulation on revocation of handler permits in cases where the person committed a felony within the past five years or a Class A misdemeanor related to misconduct involving a controlled substance in the past two years. The handler’s permit can also be revoked if the applicant is currently indicted, on parole or probation.

Thefts by a number of those holding handler permits have involved stealing from their employers, but there was no mechanism in place to revoke their permits, McConnell noted in proposing the change.

Another problem that surfaced is people selling marijuana on the validity of their handler’s permit outside of a legal venue, McConnell said.

Springer said he could see that problem unfolding as “a guy approaches you and says, ‘hey want some? I have a legal marijuana handler’s permit.’”

Under the new regulation, the board could suspend or revoke a handler’s permit, refuse to renew a permit, or impose a civil fine if the board finds that a permit holder has acted in violation of the regulations.

Affiliate definition The board unanimously approved adding in new requirements for those that will be required to be named on business application and removed the word “affiliate.”

This is an attempt by the board to get a better handle on those who exercise influence and decision-making in a business. Alaska residents are the only ones allowed to be licensed, McConnell noted. Yet, the office has no way except through licensing to enforce that requirement.

Now each business application has to include names of each general partner, manager, officer and director. This means each will be undergoing background checks.

Inspections If businesses aren’t ready for their inspection at that stage in their application process when an appointment is made, they will be charged $500.

“In our large state and with a limited enforcement staff, visiting a facility for a second or third time can be costly and time-consuming,” McConnell said. “This regulations project adds a repeat inspection fee for those licensees who request an inspection but, due to not having completed all items on the pre-inspection checklist (e.g., not having plants tagged, not having premises set up consistent with board-approved diagram)” end up needing to reschedule.

The director could waive the fee for good cause, however.

Marijuana trade shows will be now be allowed after a unanimous board vote. The new regulation allows one plant, one ounce and sample products to be transported to trade show events and exhibited. Each product has to be tracked through METRC, the Marijuana Enforcement Tracking Reporting and Compliance Inventory Tracking System, and those handling the products must have a handler’s permit.

The measure was brought forth by board member Emmett, who represents the marijuana industry.

“We can now have tradeshows,” Springer said at the end of the vote.

Smells Of all complaints, the most persistent from the public involves detecting odors emitted from marijuana cultivations, Enforcement Chief James Hoelscher told the board. Enforcement receives “a lot of passionate complaints about it and they submit to us logs of when they are smelling the strong odor of marijuana.”

The board amended language to say the licensee “does not emit an odor that is detectable by the public from outside the cultivation facility except as specifically allowed by a local government approval through the approval of a conditional use permit or CUP, or other zoning permits.


Naomi Klouda can be reached at [email protected].

01/31/2018 - 11:09am