Most investors will look at California or their home state
By Cory Wray
After the Marijuana Control Board effectively allowed outside ownership of marijuana establishments in Alaska by removing the Permanent Fund Dividend (PFD) requirement, many people felt the board sold everyday Alaskans down the river. The possibility now exists for entrepreneurs from the Lower 48 to relinquish their residency voting rights in their current state and move north to Alaska to apply for a marijuana business license.
Some people have suggested that cash-loaded entrepreneurs from the Lower 48 are now going to flock to Alaska to open up marijuana businesses. Some have predicted a scenario where an Oregonian running a successful marijuana business establishes residency in Alaska, and uses the cash from their Oregon operation to capitalize an Alaskan endeavor. This isn’t likely to happen.
Those people are reacting emotionally, not rationally.
To be fair, some entrepreneurs are going to relocate to Alaska with the intent of opening a marijuana business and realizing their dream. But that is very different from a successful operation in another state relocating to Alaska.
To be considered an Alaska resident, one must establish voting rights in Alaska, which means giving up voting rights in the state they are currently operating. People experiencing success in another state would be more likely to expand within the state they’re already operating. Oregon, for example, has nearly 4 million people — about five times the population of Alaska.
But let’s assume an Oregonian was going to expand out of state; why wouldn’t this entrepreneur expand into California, where the governor just signed into law a new regulatory system for California’s medical marijuana industry, which does not include residency requirements.
In addition to free energy for growers in the form of the sun, California has almost 40 million people. It’s the world’s eighth-largest economy. Rational entrepreneurs are going to take their chances in California, rather than giving up their current voting rights and moving to Alaska.
People who want to live in Alaska and work in the legal cannabis industry are going to relinquish residency and voting rights in their home state. However, entrepreneurs with a bundle full of cash are most likely going to expand in their home state, and look at the newly regulated California medical marijuana marketplace. It just makes more sense.
Simply stated, outsiders will not dominate Alaska’s cannabis industry. Business-savvy Alaskans who understand the local culture are going to dominate Alaska’s cannabis industry.
Cory Wray founded the Alaska Cannabis Institute in 2013 with the mission to advance cannabis knowledge and educate students in horticulture, law, business planning, sales and marketing, technology and other areas of study that will serve the cannabis industry.