Questions remain in marijuana license applications

With less than two months until the state is set to issue its first marijuana business licenses, there are still some wrinkles in the licensing process that regulators are trying to iron out.

The Alcohol and Marijuana Control Office is set to issue its first license on June 9. Some issues have yet to be resolved, including how remote communities will have their marijuana tested and how the background checks will clear through the Federal Bureau of Investigation.

Marijuana business license applicants will be required to obtain a background check clearing their criminal history. The FBI required that the state pass a statute giving the Alcohol and Marijuana Control Office authority to request the background checks for employment and business licensing. A bill granting that authority has been sent to the governor as of April 22, but has yet to be signed.

Even if it were signed, it would not go into effect in time for the background checks to be filed and processed within the time frame to grant licenses. Marijuana Control Board Chairman Bruce Schulte raised concerns about the timeline at the board’s Wednesday meeting.

Schulte suggested allowing Alcohol and Marijuana Control Office Director Cynthia Franklin to approve licenses as long as it had been shown that the background check had been requested and was pending, speeding up the process of forwarding the license application to the local government and allowing for more timely issuance of licenses.

“We’ve created what I think is an arbitrary obstacle to this process,” Schulte said during Wednesday’s meeting.

Others opposed Schulte’s proposition, saying that it wasn’t necessary for the Marijuana Control Board to take any action on the background checks.

The board also discussed rules for on-site consumption and agreed to send out a new draft of regulations for public comment after Wednesday’s meeting.

Applicants are also waiting on decisions on another bill currently working its way through the Legislature. HB 337 would subject standard and limited cultivation license applicants to a bonding requirement to assure taxes will be paid as required by statute. The language of that bill prohibits the Marijuana Control Board from issuing a cultivation license without proof that an approved bond has been posted by the applicant, according to the “Frequently Asked Questions” section on the Alcohol and Marijuana Control Board’s website.

The testing issue is one that Franklin said she did not have any clear answers to. Communities in rural Alaska, where there are not likely to be any testing facilities for marijuana products, will have to get their product to Anchorage or another testing facility somehow, and many have asked if they can mail them. Because marijuana is still federally illegal, classified as a Schedule I drug, it cannot be legally sent through the U.S. Postal Service. However, that doesn’t mean it doesn’t happen, she said.

“How do people in the bush get cocaine, methamphetamines, LSD?” Franklin said at the meeting. “They mail it. It’s mailed every day.”

Throughout the process, the Alcohol and Marijuana Control Board staff has tried to answer questions, but Franklin asked the public to be kinder to the staff in the future.

“My staff spent a significant portion of the day yesterday with people who were literally screaming at us,” Franklin said. “I would ask the board that as you interact with the public to encourage them to be kind to us, because we’re undertaking something that’s never been done.”

The process has been frustrating on the applicants’ side as well, because of both the requirements and the uncertainty. Ed Martin, a Kenai Peninsula landowner who now travels between Alaska and Hawaii in the summer and winter, said he wanted to participate in the marijuana industry but cannot because of the residency requirements. Applicants have to qualify for residency status under the same criteria as a Permanent Fund Dividend application, which means that Martin — who lives in Hawaii for more than the 180-day allowable absence, he said — either has to apply for the license under another name or not participate.

“(My wife and I) feel like our civil liberties are being infringed upon,” Martin said. “I’m from Alaska, and I pay taxes there (property taxes).”

Thomas Baxter, who has applied for a retail license in Kasilof, said the process has been incredibly difficult so far. He said he is about a third of the way through his application and “it almost takes a trained attorney” to finish it.

“Really, my real reason for starting a marijuana business is to help out people who have medical needs,” Baxter said. “I’m still in the process of doing it, but you’ve got to have so many ducks in a row before you do it.”

He said he felt the state was behind the businesses in sorting out the regulation on the industry. On top of that, the Kenai Peninsula Borough recently discussed placing a question on the ballot of whether to ban commercial marijuana operations in the borough outside the cities. Though the motion was dropped on the borough assembly level, some citizens have indicated that they would like to organize a ballot initiative to ban operations outside the cities. Baxter said the idea of a ban did not make sense to him, especially since the borough would receive revenue from the industry.

“Why would I want to invest $6,000 in a business license and the cost to start up business if they’re just going to make it illegal?” Baxter said.

Glenn Sackett, owner of an organic vegetable greenhouse in Sterling, had applied for a marijuana cultivation license but decided to withdraw it recently, because of both financing and the regulations still being debated.

“There’s so much indecision now as to what’s going to come down,” Sackett said. “I decided that I’d apply next year or something.”

Regulatory changes come down so often that the borough or state could change a provision that makes his business illegal, and Sackett said he did not want to invest the money in it before the industry was more stable.

“I know I won’t make the money that I could potentially make with a (marijuana) license growing tomatoes, but tomatoes are needed as well,” Sackett said. “I’ve just opted to stay small and maybe it’ll change, but maybe it won’t either.”

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