Residents packed the seats and floor of the Haines Borough Assembly chambers Tuesday night to hear about the state’s proposed marijuana regulations and barriers to building a pot business in Southeast.
Cynthia Franklin, director of Alaska’s Alcoholic Beverage Control Board, and Kevin Higgins, a Juneau-based criminal defense and family law attorney, presented on the new regulations and took questions at the Haines Chamber of Commerce-sponsored forum.
Higgins, after professing his passion for marijuana, warned the crowd that even though the commercialization of marijuana has been legalized in Alaska, it’s still illegal on the federal level. That contradiction will present a lot of hurdles for anyone hoping to break into the business, he said.
Issues include transportation (marijuana can’t be flown or shipped through federal airspace or waterways), financing (federally-regulated banks can’t loan money to or handle accounts of marijuana businesses) and business deductions (marijuana businesses can’t make the same kind of tax write-offs as other retailers).
“You’re not doing it in Southeast because you want to make a fast buck. You’re doing it because you love it and you’re doing it because you want to see it happen the right way,” Higgins said. “You’re going to have to create an identity. You’re going to have to find a way to skate by on razor-thin margins.”
Skagway boutique owner Kristine Harder remarked that Higgins made the venture seem “nearly impossible,” and resident Sue Libenson pointed out from a practical standpoint, an isolated town like Haines would basically need to have a licensed grower, licensed tester and licensed retailer all located in town to make an operation feasible.
“Given all these transportation dilemmas in Southeast and these communities, you really need to have all of those elements in the community to end up with a retailer who is going to sell legally to the consumer,” Libenson said.
Franklin said retailers, producers and growers can “stack” functions, but the testing – which is required – has to be done independently.
A very basic piece of equipment used in required, pre-sale tests of pot costs $115,000, she said.
While Higgins talked about barriers to business, Franklin gave an informative presentation on draft marijuana regulations put out by Alaska’s Marijuana Control Board last week.
The regulations consist of nine articles, covering topics like local option, licensing and operating requirements.
Franklin clarified that local option and local control are not the same. Local option refers to a community’s ability to opt out of marijuana commercialization entirely; local control refers to the town’s ability to regulate the industry, such as putting limits on the number of licenses, location of retailers and times they can operate.
She also outlined the similarities and differences between marijuana and alcohol regulations. One difference is there are a finite number of liquor licenses granted by the ABC, which promotes speculation and inflation of license prices when they are transferred between two business owners, Franklin said.
With marijuana, the board is going to let the free market determine how many licenses the state can bear, she said.
To view the regulations and comment, visit http://www.commerce.alaska.gov/web/abc/marijuanaregulations.aspx. Comments are due by 4:30 p.m. on Wednesday, Nov. 11.
Franklin said the Marijuana Control Board will review the public comments and vote on changes or adoption of the regulations by Nov. 20. The state is expected to begin accepting license applications by Feb. 24, 2016, and issuing licenses by May 24, 2016.