Marijuana

Voters in the Matanuska-Susitna Borough on Tuesday overwhelmingly turned down a citizens ballot initiative banning the commercial growth and sale of cannabis in the Borough.

Unofficial election results show over 8,704 Borough voters voted against Proposition B-1, which would have banned retail marijuana businesses in areas outside of the Borough’s three cities.

Votes in support of the ban totaled 7,271.

“You know, it wasn’t even close,” said Sarah Williams, who  heads the Borough Assembly’s marijuana advisory committee. “We’re so excited that the voters of the Mat Su Borough voted for economic prosperity and really realizing that a regulated market is the best thing overall for jobs and economic development.”

Borough voters also approved a 5 percent sales tax on marijuana products.

A heavier than usual 23.6 percent turnout could have been attributed to the marijuana issue, but Borough mayor Vern Halter said a $22 million recreation bond also drew voters to the polls.

“I’m extremely excited about the rec bond passing, to fix up our swimming pools and our ice arena plus some of the work on the recreational trails,” Williams said. “It’s very exciting. And the way it passed, with the numbers, too. I guess, it didn’t surprise me that the no vote on the marijuana passed, and that they will go ahead and let the state initiative go ahead. That didn’t surprise me. The numbers surprised me. It’s pretty strong numbers in my mind.”

Marijuana initiative Prop B-1 was the subject of a lawsuit brought against the Borough by several potential marijuana growers.

Last week, a state superior court judge denied the plaintiffs an injunction against the ballot initiative.

Mayor Halter said he’s pleased with the unofficial results of the election.

“Maybe the marijuana drew people out,” Halter said. “I don’t know, but I hope that people came out to vote for the rec bond. I guess you can tell I’m a big supporter of that rec bond. Little things matter, fixing things up that are worn out over the years. So I am pretty proud of that.”

In the Borough Assembly District 1 race, incumbent Jim Sykes led challenger Brian Endle by 140 votes.

District 2 incumbent Matthew Beck ran unopposed.

The Borough school board district 2 race was won by Ray Michaelson with a slim 39 vote lead over challenger Susan Pougher. Donna Dearman and Yvonne Ruth ran unopposed for district 7 and district 5 school board seats.

More than 3,400 absentee and questioned ballots remain to be counted.

The Borough election will be certified on October 18.

Anchorage is one step closer to having its first legal pot shop.

On Tuesday night, the Anchorage Assembly gave unanimous approval to Arctic Herbery, the first time a retail cannabis business has met both state and local requirements in Alaska’s largest city.

And to the surprise of many, the issue received no debate before passing 11-0. It was only at the meeting’s end that assembly member John Weddleton pointed out the significance.

“With breathtaking speed we blew by the notable first approval of a retail marijuana establishment in Anchorage,” Weddleton said to applause from members of the audience.

In recent weeks, the owner’s business plan has been vetted in sub-committees, leaving assembly members with a degree of familiarity on many of the specifics.

The shop’s owner, Bryant Thorp, said after the meeting that while he may get a slight bump in sales if he’s the first retail shop to open in Anchorage, he was also the test case for city regulators as they examined his license application under a microscope.

“I’ve taken a beating here and there, but it’s OK, I knew it was something that wasn’t going to be easy when I started,” Thorp said, whose background is in real-estate and managing a post office. “But when I decided I wanted to do this I expected the worst, and I came prepared for it.”

Thorp’s business plan received criticism from some members of the community council in the Taku-Cambell area. As well as by local regulators over traffic: the small shop, which can only accommodate four patrons at any one time, has just five parking spaces, which caused some logistical concerns.

Arctic Herbery isn’t the state’s first business to get this far.

Local governments in Fairbanks, the Kenai Peninsula and southeast have been more expedient than Anchorage in deciding whether to allow cannabis businesses to move forward.

But no matter where in the state, everyone is still waiting for full approval of the testing facilities that’ll be able to certify cannabis products. Only two such facilities have met state and local requirements, and both are in Anchorage, but not yet ready to open.

Until then, there’s not technically any legal pot for retail shops to legally sell.

Thorp had been told by the testing facilities they expect to be up and running by the end of October, after which point he’s hoping to greet his first customers.

During their regular meeting Tuesday night, the Sitka Assembly approved – on first reading – a dedicated fund for student activity travel using marijuana fees.  See ordinance here: Ord 2016-39

The ordinance, co-sponsored by Assemblyman Steven Eisenbeisz and Deputy Mayor Matthew Hunter, proposes depositing all money generated from marijuana licensing fees into a specific fund for student travel. Depending on how Sitka’s marijuana industry evolves, Eisenbeisz believes this could generate $8000 to $10,000 a year for activity travel sponsored by the Sitka School District.

This year, Sitka High School received roughly $132,000 for student activities from the city. The local contribution has been fairly stable, but with more teams and clubs flying to meets, the need is greater.

Superintendent Mary Wegner appreciates the Assembly’s work.

“Activities and athletics are a great antidote to smoking marijuana. When you’re involved with activities, you don’t want to. So it is a very interesting and novel approach, but I appreciate the [Assembly’s] creativity in keeping the students first and foremost in their minds and in their actions,” Wegner said.

The Assembly also decided – on first reading – to move $250,000 from the general fund into a committed fund balance for landslide mitigation. This includes legal, geotechnical, and other costs anticipated by the city.

Specifically, the city wants to proceed with geotechnical mapping around Keet Goshi Heen Elementary School, which has been identified as a moderate risk area. City Administrator Mark Gorman said some of the money could also be used for legal fees related to the Kramer Avenue landslide.

“We have two suits that have been filed against the city, related to the landslide. These came in about six weeks ago. We are working with council – David Bruce, who you met with several times – and he’s given us his best case scenario as to what the expenses are going to be this year. And it includes geotechnical work,” Gorman said.

Bruce, an attorney based in Seattle, has been working with the city since November. Gorman also hopes the city’s insurance will kick in to help with legal fees.

In other business, Sitka Community Hospital took a major step toward paying down its line of credit, which the Assembly increased two years ago to resolve the hospital’s cash crisis. The hospital is in a much better financial position now, with 81 days of cash on hand. And Tuesday night (09-27-16), they presented the Assembly with a check for $463,000 towards that line of credit.

“That will bring us down where we’ll owe slightly less than $1 million dollars,” said hospital CEO Rob Allen. We’re also set up so that from this month forward, we’ll be making monthly payments on the line of credit.

ECG Consulting is currently looking at ways for Sitka Community Hospital and SEARHC to integrate operations. Allen says the hospitals will hold a work session with the Assembly in November to discuss the findings.

During his report, City Administrator Mark said that construction on Jeff Davis Street may take longer than anticipated due to issues with the old sewer main.

The Assembly’s next meeting will take place on October 11th in their new chambers at Harrigan Centennial Hall. During that meeting, the current Assembly will resolve old business and then change hands, welcoming a mayor and either one or two new Assembly members.

 

A proposed tax on marijuana and marijuana products advanced in second reading Monday before the Petersburg borough assembly.

However, the assembly voted to change the wording for future use of the proceeds of such a tax.

If voters approve commercial marijuana sales in the borough in next month’s election, then the a new tax of $25 an ounce could be charged on all pot grown in the borough or marijuana products produced locally.

That same amount would also be collected on any pot imported for commercial sales here.

Discussion on the proposed tax at the assembly has focused on what to do with any future revenue.

Local resident Marj Oines wanted to ensure that some of the money would go to fund drug and alcohol counseling costs and pointed at the willingness to do this in other states.

“So there is some understanding that what our borough is considering causes an increase and some kind of need for treatment,” Oines said.

The proposed tax was initially drafted to go entirely into the borough’s property development fund.

That’s a pool of money used for land purchases along with constructing or maintaining borough buildings.

The borough assembly can transfer money into or out of that fund, depending on the needs of the municipality.

During the first reading of the ordinance, the assembly agreed with Oines to add language to use up to 50 percent of the tax proceeds for funding substance abuse counseling.

However, Nancy Strand opposed that idea earlier this month and wanted to change it back to its original wording.

“I’m not comfortable with earmarking funds for any special thing,” Strand said. “The property development fund is about as far as I’ll go. And I like that it be, the dispersal of the funds be discussed by the assembly during budget time annually.”

Several on the assembly pointed to the difficulty in allocating borough payments to community organizations each spring during the borough budget process.

Jeigh Stanton Gregor agreed the tax proceeds shouldn’t go into that part of the borough budget.

“I’d like to avoid those struggles in the future and keep things streamlined,” Stanton Gregor said. “And if the property development fund is something we feel isn’t a good place to put this money in the future, we can always change our minds and doing something else with it. We can always switch course if need be.”

The assembly voted 4-1 to change to ordinance to put all the tax revenue into that property development fund with Cindi Lagoudakis the only no vote.

Then the vote was unanimous to pass the tax ordinance in second reading.

Mayor Mark Jensen and assembly member Bob Lynn were not at the meeting.

Stanton Gregor explained his support for the new tax.

“I mentioned this last time,” he said, “with both state and federal monies becoming less and less for Petersburg, I think this is a great opportunity for us to make money for the community. I’ll definitely be voting for it.”

That ordinance needs one more approval by the assembly next month before taking effect and will remain on the books but not enforced if voters decide to prohibit commercial sales and importation Oct. 4.

Alaska’s top marijuana regulator said Wednesday that pot will be on sale by February. But industry advocates expressed frustration it’s taken nearly two years since voters approved the sales.

And legislators said they’d like to see the state allow marijuana consumption in private clubs. Some lawmakers would also like state officials work to improve marijuana businesses’ access to banks.

Alcohol and Marijuana Control Office Director Cynthia Franklin told state legislators that marijuana testing should begin within weeks.

“I believe that by the time we arrive at February of 2017, we will have stores that are operating; we will have product manufacturers that are making products, which have been individually approved by this board – which is a tremendous amount of work; we will have testing facilities that are testing; and we will have a lot of cultivation facilities growing a lot of legal marijuana in Alaska,” Franklin said.

She spoke at a joint meeting of the House and Senate Judiciary committees at the Legislative Information Office in Anchorage.

Lawyer Jana Weltzin says her marijuana business clients are paying to rent property, but they’re not receiving revenue.

“It has been two years, and I’m getting to the point where some of my clients have been paying rent for a really long time,” she said.

Franklin said her office has been affected by having too few staff members for the amount of work it’s required to do.

Another obstacle for marijuana businesses is banking. Division of Banking and Securities Chief Examiner Patrice Walsh said Congress must change the law before banks will accept marijuana business customers.

“Right now, the Division of Banking and Securities is not aware of any bank or credit union in our state that is willing to bank marijuana businesses at this time, because the businesses are illegal, under federal law,” Walsh said.

But Anchorage Republican Sen. Lesil McGuire said she’d like to see the state work with federal regulators to make it easier for banking for marijuana businesses to advance. She noted a memo from former Deputy U.S. Attorney General James Cole said the federal government would take a hands-off approach to marijuana in states that legalized it.

“States who have legalized this have an obligation to set up regulations that provide security and authority and a clear path for banks – lending institutions – in that state to secure a legal pathway for lending,” McGuire said.

Lawmakers also questioned Attorney General Jahna Lindemuth on her recent opinion that marijuana consumption is illegal in private clubs. They disagreed with her opinion that these clubs are public spaces. The ballot question that legalized marijuana said it would be illegal to consume in public. Legislators raised the possibility that state law could be changed to allow marijuana in clubs.

The state approved its first licenses for commercial cannabis businesses Thursday, a major step for prospective retailers hoping to open shop before year’s end.

Officially, the state’s first shop to be approved was Fairbanks’ Frozen Budz. The first for Anchorage is called Enlighten Alaska, located in Spenard.

Jane Stinson is one of the co-owners of the business and says getting the license is a major step forward.

“What this means to us is that we have a lot of work to do. So this’ll allow us to start our build-out, or continue with it. And start communicating, networking with all of our vendors and the folks who’ve already received their cultivation licenses,” said Stinson.

The state’s Marijuana Control Board has already approved dozens of cultivation licenses, allowing commercial growers to move ahead.

Though a few businesses have already received local approval, others, like Stinson’s, are still scheduled to go before local governments for another review process.

“We go in front of the Muni on October 18th for our special land use permit for marijuana,” said Stinson.

Though that’s the last significant regulatory hurdle for Stinson, many challenges remain as the new industry comes online. Major questions about transportation, financing, and security are still being figured out as officials, entrepreneurs, and customers grapple with commercial cannabis.

The board also approved the first licenses for manufacturing facilities, which are businesses that plan on making products like edibles and concentrates for sale in shops.