YEAR IN REVIEW: Onsite consumption decision delayed; voters reject bans

  • This Jan. 18, 2017, photo shows marijuana including the store’s best-seller, Gorilla Glue, available for sale at Rainforest Farms, owned by James and Giono Barrett in Juneau. The Barrett brothers have a dream: that some of the scores of cruise ship passengers who crowd the streets of the state capital each summer will one day use their shore excursions to kick back and light up a joint in a pot store’s lounge. They’ll have to keep waiting as it will be more than a year since this photo was taken before the Marijuana Control Board takes up the issue again in April. (Photo/Mark Thiessen/AP)

The advocates of allowing onsite cannabis consumption gained some ground this year, but no final decision was made.

After running out of time in its two-day meeting in Anchorage Nov. 14-15, the Marijuana Control Board postponed action on the issue until next April.

In the closing minutes of the meeting at the Dena’ina Civic and Convention Center, board member Loren Jones made a motion to postpone the previously scheduled onsite consumption vote.

This third attempt to pass a measure, brought forth by industry representative Brandon Emmett, would allow businesses patterned on bars to open for the public to allow people to socialize and legally consume marijuana products. The board voted 3-2 in July to approve sending Emmett’s measure out for 60 days of public comment.

But Jones put the brakes on, recommending that a new subcommittee be appointed to take up regulations deciding how the public facilities would function.

“I don’t want to do this on the fly,” Jones said. “We received 550 pages of public comment that I haven’t even been able to read yet. There are fiscal implications with enforcement staff.”

Board member Mark Springer of Bethel, representing rural residents, agreed that it would be better to concentrate on what’s involved in passing the new regulations when there is more time to go through the finer details.

But Emmett expressed disappointment that was echoed by business owners.

“We’ve debated this for a couple of years. It’s been out for public comment, and motions have been approved,” Emmett protested. “We should no longer waste public resources on this issue. If this is something that’s not in the public interest then let’s vote on it. If the board’s not interested in approving it, then we need to vote it down. We need to settle it.”

After reviewing comments and further work on how the public facilities would be regulated, the board likely will take a vote again at its April meeting, Emmett said.

No. 2: Prohibition votes fail

Voters on Oct. 3 rejected propositions to ban commercial marijuana operations on the Kenai Peninsula and in Fairbanks, where most of the state’s cultivation farms are located.

Voters on the Kenai Peninsula went against the prohibition 5,232 to 2,941, or 64 percent to 36 percent.

In Fairbanks, voters sent two ballot proposals to defeat.

The Fairbanks North Star Borough results were 9,488 against to 4,080 in favor, or 70 percent to 30 percent.

The votes weren’t close in any of the voting jurisdictions, noted Cary Carrigan, the executive director of the Alaska Marijuana Industry Alliance.

In the City of Fairbanks, voters cast 2,912 against the ban prop and 1,313 votes in favor, similar to the borough at 69 percent to 31 percent.

At stake if the measures passed was a significant portion of the state’s cultivation facilities. When the Marijuana Control Board met in Nome in September, it approved 27 new licenses in the Fairbanks and the Kenai Peninsula boroughs.

More than 30 businesses in Fairbanks and another 20 to 25 on the Kenai Peninsula were believed to be in line to shut down if the measures passed, according to a count of businesses licensed with the Alaska Marijuana Control Office.

In the state and on the peninsula in 2014, the question of legalizing marijuana held narrow margins. The statewide ballot proposition that legalized it in 2014, known as Proposition 2, passed by six percentage points, while voters in the Kenai Peninsula’s four districts rejected it by about two percentage points, according to the Peninsula Clarion.

The strongest rejection came in the district containing Kenai and Soldotna, where voters were 4,169 to 3,558 against legalization. Two of the peninsula’s voting districts, however, voted yes — the district roughly south of Kenai, Soldotna and Cooper Landing, and the district south of Kachemak Bay.

In Fairbanks, part of the effort to ban cannabis businesses involved community concerns that there were “too many” retail shops and cultivators in the Fairbanks area.

After voters in Fairbanks upheld legal operations, Fairbanks Mayor Jim Matherly announced that part of the next chapter would potentially involve limits on the number of marijuana businesses in the city of Fairbanks through a city ordinance.

No. 3: Tax revenue closes on alcohol

Total taxes collected on the new Alaska industry of marijuana cultivators and product manufacturers was $4.7 million from the first legal sale in October 2016 to this past November, according to the Alaska Tax Division.

Numbers from a budget report by Alcohol and Marijuana Control Office Director Erika McConnell to the Marijuana Control Board Nov. 14 showed that the state still takes in more from alcohol taxes than marijuana tax, but the two were growing closer; she showed figures indicating that for the same time period in 2017, alcohol taxes tallied $2.2 million while marijuana taxes came to $1.5 million.

She gave these figures when it met in Anchorage for the second time this year, at the Dena’ina Civic and Convention Center.

Statewide annual tax collected on marijuana buds and trim steadily climbed between October 2016 and November 2017. The new industry contributed just over $10,000 in taxes its first month when a handful of newly licensed cultivation facilities began paying $50 per ounce for the bud and $15 per ounce for other parts of the plants.

From October 2016 to October 2017, $3.7 million in taxes total was collected from marijuana growers.

Tax division numbers from fiscal year 2017 report $1.75 million in taxes from 44 marijuana operations. In fiscal year 2018, which began July 1, $2.9 million in taxes was collected from 75 operations.

The state also recorded that 76 percent of the facilities paid in cash, said Kelly Mazzei, a supervisor in the Tax Division.

This is because marijuana is still illegal on the federal level, so banks are not handling transactions from the Alaska businesses, she said.

Naomi Klouda can be reached at naomi.klouda@alaskajournal.com.

Updated: 
12/20/2017 - 10:43am

Comments