Marijuana board to take up onsite consumption Friday

The Marijuana Control Board will take up onsite consumption and make recommendations to change how the industry is taxed at its April 4-6 meeting in Nome.

A hefty agenda is ahead over the next three days. The board is set to review 46 applications for new businesses and renewals. And it will tackle whether a moratorium on the number of new marijuana businesses might be warranted. There are currently just more than 189 cannabis cultivation, retail and manufacturing operations in Alaska. (The number was updated from 150 operations to 189 on April 4 at the MCB Nome meeting.)

If the newest draft regulation for onsite consumption is adopted, it will allow marijuana products to be sold to patrons much as a bar functions to legally dispense beverages. Once licensed, the premises would need to confine activities to a designated area. It would be separated from the remainder of the premises by a secure door and a separate ventilation system or located outside.

The debate for and against allowing onsite consumption has been before the board since its inception in July 2015. Each time a measure was put forth to allow it, the board either postponed the matter or voted it down.

But this time board member Brandon Emmett hopes the contentious points are worked out to everyone’s satisfaction. Emmett is one of two industry representatives on the board.

“We were all unanimous on the committee that this is the draft we will bring forward. We want to alleviate concerns and we want the industry to have a responsible rollout,” Emmett said.

Emmett and board member Loren Jones of Juneau worked on the draft with input from staff and the board.  Jones, a Juneau resident who represents public health on the board, had a lot to say about potential hazards that need to be addressed, such as second-hand smoke that can be intoxicating for those who work in establishments.

Clean air ordinances are already in place in many municipalities, he frequently reminded the board during discussions.

“A lot of the changes are ones that staff and Mr. Jones had brought to my attention,” Emmett said. “Still, you never know what is going to happen with onsite consumption. The board was in disagreement on whether Alaska was ready for it.”

Jones said he feels public health concerns were covered well.

“We addressed ventilation and smoking, and the staff raised clarity and definitions. We worked well together,” Jones said. “I think the product — probably we’ll take it up on Friday — is a good one. It’s greatly improved. We’ll see if other members are willing to accept that, or if we make changes.”

What entertainment is allowed — television, music, dart games or pool, etc. — wasn’t taken up in the new regulations. In past debates, some board members expressed disapproval of entertainment to prevent lingering and vagrancy.

“That may end up being a non-issue,” Jones said. “If someone wants to make an amendment (on allowable entertainment) before it goes out or if it comes up through suggestions, it could come up at any time.”

The proposed restrictions limit amounts to be sold at what’s been dubbed “bud bars.” Edible marijuana products can’t exceed 10 milligrams of THC per person per day or marijuana bud or flower in quantities more than one gram per person per day.

The regulation prohibits employees from consuming marijuana products during a work shift and it doesn’t allow patrons to bring in their own marijuana. It has to be purchased from that retail store.  

“These are not marijuana clubs,” Emmett said. “You can’t bring your own.”

People being subjected to harmful smoke particulates proved key to the mitigation challenge, Jones said.

To address those concerns, the regulation calls for a smoke-free area where employees can monitor the establishment. A venting system must direct air from the consumption area to outside of the building “through a filtration system sufficient to remove visible smoke… and adequate to eliminate odor at the property line.”

But the outdoor area also has to be compatible with its neighborhood environment, including uses of surrounding buildings and the location of their intake vents. They’ll also need a wall or fence at least 6 feet high that cuts off any view of marijuana smoking from the public.

And the licensee will need to consider objections from other property owners and residents within a 250-foot area, or whatever distance is required under local zoning codes.

As in other licensing requirements, any applicant for onsite-consumption approval will need detailed diagrams plus depictions showing serving areas versus retail, employee monitoring areas, ventilation exhaust points and floor plans.

Taxes

A draft resolution asking the legislature to change how marijuana taxes are calculated is now before the board for a vote at the meeting.

Board members at the last meeting agreed they want to request the Alaska Legislature to change the tax structure.

The proposal shifts to a 12 percent retail sales tax structure to replace the “current inflexible cultivation tax structure that does not move with the market’s ebbs and flows,” the resolution states.

More details are spelled out as spreading the 12 percent among nearly all products sold wholesale and across the counter: marijuana trim, marijuana flowers, immature plants, edibles, concentrates, extracts — even cannabinoid products meant for use on hair and skin.

Under current law, only marijuana flower at $50 per an ounce and trim at $10 an ounce are taxed. Under the requested changes to state tax code, each marijuana retail facility would be sending monthly tax statements to AMCO as well as reports of quantities sold.

The Alaska Department of Revenue has collected about $7.4 million in marijuana taxes since collections began in October 2016. The last month tabulated, January, proved a record surpassing the $1 million in taxes raised for single month. According to revenue’s numbers, 46 cultivators were active in Alaska, which currently pay the tax.

Short a member

The five-member board will be operating with just four until the vacant public safety seat is filled. Four is enough for a voting quorum in the meantime, said Chairman Mark Springer.

The Governor’s Office of Boards and Commissions sent out a public notice March 13 inviting applicants for the public safety seat vacated when North Slope Borough Police Chief Travis Welch resigned.

Welch gave his resignation to the Marijuana Control Board in early March after he was removed as police chief by Borough Mayor Harry Brower. As a political appointment, Welch said he was given notice only that the mayor wanted to “make changes.”

An active role in public safety is a statutory requirement for this position on the board. The other four seats are designated for industry (two seats), public health (one seat) and rural Alaska (one seat).

Welch briefly replaced Soldotna Police Chief Peter Mlynarik who resigned Jan. 6 after serving as chair of the board for more than a year and on the board since its July 2015 inception. Welch participated in the last board meeting in Juneau in February.

Mlynarik resigned after Attorney General Jeff Sessions rescinded the so-called “Cole memo” written in 2015 that established a Justice Department policy of nonenforcement of federal marijuana laws in states that had legalized it for medicinal or recreational use.

Lindy Irwin, deputy of Boards and Commissions, said they are actively interviewing to fill the vacancy.

“For the past two days we have been interviewing candidates. We’re getting close to the edge of the Legislative session, so we’re hoping to get it done soon,” Irwin said. “It may be a difficult seat to fill because of the Cole Memo. There’s been some interest but it’s limited.

“We’ve only had a couple of people apply,” Irwin said.

Naomi Klouda can be reached at [email protected].

Updated: 
04/04/2018 - 2:12pm

Comments