Will legal pot be possible in rural Alaska?

Residents and borough staff in Petersburg are trying to come to grips with state regulations for marijuana that take effect later this month. The regulations create a new licensing process for businesses that could grow, test and sell pot in the state. But they have some in Petersburg thinking the hurdles for new pot businesses will be too difficult and local marijuana sales will remain underground and off the books.

A subcommittee of Petersburg’s marijuana regulation advisory committee met about permitting and taxation requirements in late January.

“The one thing that is really going to make it more difficult for locally is the testing, having to ship it out to be tested when you can’t ship it out,” said subcommittee chair Kevin Clark. “And then building a testing facility here that would be prohibitively expensive, considering the kind of volume you’d have to generate in order to justify it.”

Without somebody building a testing facility in Petersburg, the requirement would mean sending samples off the island to a larger community with such a facility. And that would mean shipping those samples by commercial airlines, state ferry or some other transport. Problem is, that transport is prohibited by federal law. That has local residents thinking that testing off-island can’t happen.

Between the requirements for testing and the licenses needed for new businesses, subcommittee members did not seem to think any pot businesses would be opening up anytime soon.

“So what we’re going to wind up with is an underground, period,” said subcommittee member Chuck Rose.

Communities can pass local laws that are more restrictive than the state regulations, or even opt out of the legal pot experiment altogether. So far there’s been little interest in going in that direction.

Clark thought the state’s regulations were restrictive enough. “There’s a reason I haven’t heard of anybody planning on starting a business here,” Clark said. “I haven’t heard of anybody looking for licenses. There’s been no rumor of it. I don’t know has anybody else heard of anybody gonna start a shop?”

The subcommittee decided to take no action on making recommendations. Members said they did not want to recommend any local restrictions that would be more burdensome than the new state regulations.

“I believe that people will be able to transport marijuana around this state, licensee to licensee, with a transportation manifest from the seed to sell software system and all of the requirements that are required in the regulations, ” said Cynthia Franklin, director of the state’s marijuana control board.

She noted that people are focusing on the federal prohibition on transporting marijuana. “But what everyone seems to be forgetting is the entire operation is prohibited by federal law. In other words, growing marijuana is prohibited by federal law, testing marijuana is prohibited by federal law, everything about this activity is prohibited by federal law. Marijuana is a schedule one controlled substance on the federal controlled substances act.”

Franklin agreed that it comes down to what laws the federal government will enforce. And she said the only guidance Alaska has is a 2013 memo from U.S. Deputy Attorney General James Cole, which outlines federal priorities for law enforcement in states that have voted to legalize pot. That memo says the feds will require the states to implement robust regulatory controls on the pot industry. And it says federal law enforcement will focus on things like keeping pot out of the hands of minors, and prohibiting transport to states that haven’t legalized.

Franklin does not yet know how pot transport for testing will happen but believed it will. She said she’s much more worried about Alaska opening up pot businesses only 500 feet from schools. That’s the buffer in the new state regulations and it’s based on Alaska drug free zone distance. But it’s half of the federal buffer requirement.

“The buffer zone issue is a much bigger issue and much more likely to attract the feds attention from my perspective then a small amount of marijuana being sent from Petersburg to Anchorage for testing,” Franklin said.

She said Alaska, unlike other states with legal pot, is breaking new ground with a proposed buffer smaller than the 1000 foot federal requirement. Petersburg has asked for a smaller buffer zone of 200 feet, because the 500 foot distance would rule out most of the downtown business district for pot businesses.

Franklin thought pot businesses will be able to operate in a small town like Petersburg. “The people in small communities are saying the regulations favor urban communities but they’re saying that because they haven’t sat down and they don’t understand the relationship between the regulations and what they say and the federal enforcement priorities, because we cannot change federal law with regulations promulgated by the marijuana control board.”

The state’s regulations don’t take effect until February 21st. The state plans to offer training for business to get through the application process in Anchorage February 17th and 18th. Franklin said that training will be videoed and posted on the state’s website. Forms for new businesses to apply are not yet ready. The Marijuana Control Board is schedule to approve those on the 11th. And the state plans to be ready to accept applications on the 24th.

Meanwhile, Petersburg’s borough staff has started drafting a local ordinance for pot businesses. Borough assembly members this month said they wanted to wait until the new regulations take effect before finishing up that new local law.