Changes set in motion for Alaska’s cannabis industry

Photo by Copper River Salmon Marketing.

The July 2017 Alaska Marijuana Control Board meeting held in Fairbanks was an extended three-day long meeting. Industry participants came from across the state to attend.

Unfortunately, the state provided a small conference room for the meeting, which could comfortably seat about 40 people, which was far less room than needed to seat the 100-plus people who came to participate in the public process. Many camped out in the hallway to listen and provide testimony, others found spots on the floor or unused tables. For the startup of a new industry, one would think the state would find it beneficial to have such an interactive and interested industry showing up to the three-day long meeting that it would figure a way out to accommodate such a crowd. And yet, despite the meeting being heavy in proposed regulations that would affect the everyday business operations of the new marijuana licensees, the small room was all the state could scrounge up for all three days.

The following regulator projects were addressed at the meeting and the actions on each are summarized below, including the infamous onsite consumption:

 

Revocation of Handler’s Permit if permit holder has certain criminal background: Failed.

 

Transportation: Adopted at July MCB meeting. Next step: Review by Department of Law and sign off by lieutenant governor. The new regulation will become effective 30 days after the lieutenant governor signed; thereafter any licensed establishment can transport to any other licensed establishment, regardless of license type.

 

Onsite Consumption Endorsement: The board voted to put out a draft regulation for public comment for a period of 60 days and AMCO estimated it would go out for public comment in early August. The board will consider whether to hold a public hearing after the 60-day public comment period. If substantive changes are made by the board when they board considers the public comments and whether to adopt the draft regulation, the amended draft regulation will have to go back out for another public comment period.

The current draft going out for public comment in early August includes the following:

endorsement, and must submit amendments to premises diagrams and operating plans.

board wants to respect that authority (in other words, the board wants to respect local control

over this issue).

consumption, and the regulation sets maximum amounts to be purchased during a single

transaction.

approved by a licensed mechanical engineer and must be sufficient to remove visible smoke,

must be consistent with applicable building codes, and must be isolated from other areas of the

retail store.

beverages.

 

Quality Control: The board voted to put out a draft regulation for public comment for a period of 30 days and AMCO estimated it would go out for public comment in early August.

The draft approved to go out for public comment allows for cultivators and product manufacturers to provide employees with small samples for the purpose of quality control testing. The samples must be documented on a form prescribed by the board and retained as a business record.

 

Waste Disposal: Amended and approved at the July MCB meeting to go out for public comment for a period of 30 days and AMCO estimated it would go out for public comment in early August.

This will require a written request to AMCO for a retest or reuse of a failed sample, add marijuana and marijuana product that is either unfit for sale/consumption or expired to the list of marijuana waste in 306.740(b)(1). The board also voted to strike roots from what is considered marijuana waste, so marijuana roots will no longer have to be ground and mixed to be rendered unusable; they can be disposed of with other non-marijuana waste.

 

Plant Count for New Cultivators: Approved at the July MCB meeting to go out for public comment for a period of 30 days and AMCO estimated it would go out for public comment in early August.

This will add to 306.405 that cultivators can only have up to 12 mature, non-flowering plants, designated for use as mother plans and any number of immature plants and seeds at the time of the initial inspection and that a cultivator may not introduce any new plants or seeds into the licensed facility after the initial inspection unless they are acquired from another licensed cultivation facility and tracked in METRC.

The definition of immature in 306.990(5) is revised to include 18 inches or less in height and the definition of mature in 306.990(7) is added as a marijuana plant over 18 inches in height.

 

Definition of Direct or Indirect Financial Interest: Approved at the July MCB meeting to go out for public comment for a period of 30 days and AMCO estimated it would go out for public comment in early August.

This would eliminate percentage lease or rent agreements from the exemption of direct or indirect financial interest. So, a percentage or rent agreement would be allowed, but the landlord would have to be a licensee.

 

Local Government Jurisdiction: Public comment began July 21, 2017 and ended Sept. 5, 2017.

This amends 306.025 to require that applicants give notice to each local government with jurisdiction over the proposed licensed premises. So, this would require the applicant to notice the borough in addition to the city and would also allow the borough to protest in addition to the city.

 

Timing of Public Objections: Public comment began July 21, 2017 and ended Sept. 5, 2017.

This will extend the period for public objections to not later than 30 days after the director deems an application to be complete

 

Notify AMCO of Crime on Licensed Premises: Approved at the July MCB meeting to go out for public comment for a period of 30 days and AMCO estimates it will go out for public comment in early August.

This will amend 306.715 by adding a new section that requires licensees to report to AMCO any unauthorized access to the licensed premises or any theft, diversion, missing marijuana or marijuana product or money from the establishment as soon as reasonably practical.

 

Promotional Activities and Advertisement: Amended and approved at the July MCB meeting to go out for public comment for a period of 30 days and AMCO estimated it would go out for public comment in early August.

This will add a new section under Article 7 that:

 

Keif: Approved at the July MCB meeting to go out for public comment for a period of 30 days and AMCO estimated it would go out for public comment in early August.

This amends 306.645(b)(1) to include kief as requiring potency testing and can be tested separately from marijuana flower; 306.435 is also amended to allow cultivators to produce, test and package keif.

 

Testing Trim: Approved at the July MCB meeting to go out for public comment for a period of 30 days and AMCO estimates it will go out for public comment in early August.

Amends 306.645(b)(1) to require that leaf and trim be testing separately from marijuana flower.

 

Testing Equipment Failure Notification: Approved at the July MCB meeting to go out for public comment for a period of 30 days and AMCO estimated it would go out for public comment in early August.

This draft regulation requires any licensed testing facility that experiences a significant equipment malfunction or failure to report within 24 hours to the AMCO director. Reporting requirements also include contingency plans for completing suite of tests and destruction of test sample.

 

Jana Weltzin is the owner of JDW, a law firm in Anchorage, Alaska (jdwcounsel.com). She advises clients in the cannabis industry in Arizona and Alaska. She assists clients with business structure, compliance with state and local laws, zoning approval, site selection and product regulations.

 

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