Bailey Stuart represents the Industry on the Alaska Marijuana Control Board
This Marijuana Control Board meeting met in Anchorage at the Attwood Building bottom floor. This was the first meeting where I (Bailey Stuart) represented the industry on the Marijuana Control Board. I am overwhelmed with gratitude for my industry members that have supported my representation on the board.
This meeting had an unusual start. In order to hold a meeting there must be a quorum, a quorum on a 5 member board is 3 members being present. This meeting we only had three members present, with Public Safety away on conference and Public Health seat still waiting appointment from the Governor. However, at 9am only two board members were present. In the 9 years this board has held meetings there has not been one meeting missed or postponed.
Until this day, Rural seat was not present, postponing the meeting until we established a quorum. I have never seen the staff as concerned for a board member as they were at the thirty minute mark. This was unlike Mr. Cyrus usual habits. About 10am Mr. Cyrus was present, apologized for the delay, it was an error on his part and we began my first meeting representing the industry.
Directors Report and Enforcement
As usual, first order of business is reports. The Director reported an regulatory oversight in how tax accusations, informal conferences and notices of violation are processed. This will take some regulatory clean up in the future, but currently the processes are not aligned in regulation and are currently creating two appeals tracks and are making the informal conferences either a mere right without the ability to defer to referrals to the Office of Administrative Hearings or are a source of time delay without any ability to resolved the matter.
Enforcement renewed the Memorandum of Understanding between the Division of Agriculture and AMCO. Enforcement and DoA plan to conduct joint inspections beginning later this month. They will be visiting both Hemp Registrants and Marijuana Licenses. In the public comment period we heard of a serious issue upon enforcement placing an administrative hold on products located at a particular retail that was in the process of having their licensure revoked. In the process of placing a hold on products Denali Fire was effected unintentionally. Originally it was speculated that enforcement accidentally checked a box to put a full hold on Denali Fairs products. Which had large repercussion.
Denali Fire Accidental Administrative Hold
The licensee of Denali Fire was immediately contacted by retailers asking what was wrong with their product that
there was a hold placed on it. The licensee had no answers, there should be no reason their products were placed on hold however, that was the case. I asked enforcement if there is a prompt in METRC before placing holds on products as a fail safe. There is not, however, what did come to light was this was a issue with METRC. They did not place a hold on the product only what was in the license that was being revoked. There was a coding issue that effected all of Denali Fire product.
This serves as a great example of why we should always communicate. This company missed tens of thousands of dollars in canceled orders because of a simple coding error. Before you assume a administrative hold is valid, please ask the licensees before canceling your order.
Tax Delinquency
We are still having the issue of tax delinquency, the costs incurred to stay ahead of your taxes is more than some small cultivators can bear, especially off the road system. The Alaska Marijuana Industry Association is working fervently to correct these issues and provide immediate relief. HB 119 will transition the tax to $12.50 an ounce across the board. It will move the taxes to a quarterly payment and create biannual licensing. Additionally, after the Department of Revenue transitions it will move the tax to a 6% retail tax on the product value. Let’s tax the ketchup, not the tomato.
AMCO Slashes Licensing Wait Times
The licensing queue is at its lowest point ever, a significant achievement that deserves a huge round of applause for AMCO. Their hard work and dedication in reviewing licenses promptly have paid off immensely. Gone are the days of waiting 18 months to open your business. Now, thanks to AMCO’s diligent work and becoming more efficient, aspiring business owners can expect a much quicker turnaround. Allowing new entrepreneurs to get their ventures up and running without unnecessary delays.
Children on Licensed Premises: What happens with a family emergency?
While we had some egregious acts from licensees this meeting, I will cover two that I think is important. First one being a topic that is important to me and this is children on the license premise. My personal belief is that there is a time and place for children to potentially be on the license premise. These are Alaska owned and Alaskan ran business. Many of us have families and I personally have given my business time that I wish I could have spent with my children. When I get the call that there is an emergency at my shop, I have to scramble to find last minute care for my children, unable to bring them onto the licensed premises. Unlike any other family owned establishment, where the children would be by my side.
However, I respect the regulations that have been created and abide by them, but I do believe there are special circumstances where regulations should be broken. And that’s when it comes to human life. A licensee found himself in the position where there was a child, who was his own and he was unaware that had ended up in Child Protective Services. This child had been through hell in back, had almost every drug in her system, but not marijuana. It was discovered he was the father and to his surprise he found out he had a daughter. OCS recommendation was that this child not leave his side. It was important that this child be able to bond and learn to trust this new man in her life. They were starting a new life together and considering the circumstances he took that recommendation seriously. His home is his business, he brought the child into the security room, where no marijuana was stored, and cared for her there while he ran his business. Because once again, we are Alaskan owned and ran. A customer heard children’s programing in the background and reported this to AMCO. Upon an investigation this license was completely upfront with enforcement and provided everything that was requested and treated them with respect. And noted that he was also treated with respect and appreciated enforcement’s demeanor when approached. I motioned to vacate this NOV because I felt that in light of breaking violations, he did what was right for this child, he did not further endanger the child and cooperated with enforcement and was honest. He brought the child to the meeting, and I saw this child behave herself for hours on end until we got to this NOV. This child’s quality of life is important, and while this motion failed, and we have tabled it for the new board meeting with more members present. I do feel this licensee did the right thing.
560 Notices of Violation
Second NOV before the board was a licensee who upon a random inspection had 560 notices of violation. This licensee did not track the plants being grown in their cultivation through the state tracking system. They felt their own system of tracking, which I saw no proof of, was better than the states. Additionally, they were found to have numerous large bags and jars of cannabis with no tracking and the license could not tell enforcement what strain or batch they were from, and their METRC told a different story. I motioned to suspend the license for 180 days, issued a $5,000 civil fine and required all product and plants be destroyed. Looking back I think I would have gone a different route, but this was our decision at the time. This was beyond egregious, this was a total lack of following regulations. This serves as shots fired, I realized after I should have taken a different approach given how many licensees go above and beyond in following regulations. Why keep one around that simply does not? I have asked myself this a thousand times since this meeting.
Regulations Projects
When it came to regulations projects, we motion to approve special investigators hiring standards. As well as simplified the application process when it comes to food safety. Prior to this you had to submit proof of having an active application with DEC. However this was redundant as earlier in regulations we are already required to follow all other state laws. Staff brought to the board two different suggested regulation projects. The first being management agreements. There has been an uptick in management agreements where the licensees who submitted the application are hands off with the business and allow for another management company to come in and operate the license. While this is not inherently bad, it has caused some unforeseeable issues. Such as when enforcement does an inspection but is not aware of who is running the business which causes confusion. Who is responsible at that point? Who is the point of contact? Etc. At the end of the meeting during the last public comment two attorneys representing licensees spoke on the this topic. Urging simplification of this regulatory project, to not place huge limitations or burdens. Seeing as the core issues is communication that asked the board to create regulations around notifying the office of management agreements but not limit the language of those agreements.
Another regulation project that was opened due to staff suggestions is informal conferences. There is some confusion in the language as to timelines and licenses have abused this system in order to buy time for themselves. Staff brought some suggested language to the meeting for the board to review.
Spliffs a Regulation Nightmare
Towards the end of the meeting we had some interesting product applications from a manufacturer looking to add nicotine to their vapes. Now spliffs are nothing new to this industry, but as for it being manufactured for sales, that’s a whole different conversation. While we did table this product for a meeting where public health and safety are present this was an interesting product to propose and one I’m surprised hasn’t been address up until this point. My personal opinion is I think this industry could use a product like this on our market. What is safer, a manufacturer that understands product safety rolling this spliff for its customer or the customer doing in themselves. I’m no smoker, but I do get a little excited when someone lights up a spliff, there is something magical about the way cannabinoids and tobacco effect each other, an entourage effect so to say. This is the only way you’ll catch me smoking tobacco and that is a very rare occurrence. However, my personal opinion is I do not think we are going to be able to pass this product. After looking up tobacco regulations, this is a very complicated conversation that we will need ourattorneys help in holding.
Onsite Consumption Lounges
Lastly we had some complicated applications when it comes to onsite consumption. By the end of the conversation I opened a regulations project to look at 3 AAC 370(e) specifically the wording that you must enter from a retail license premise. Why is that, we asked ourselves, is that in the interest of public health and safety if no smoke is being produced? We will be taking a look at that at our next meeting. At the end of the meeting I opened up some regulations projects that will address emergency family regulations, lowering licensing fees considering our $5.5 million loan is about to pay back the general fund and we are $2,000 over statute currently and lastly cleaning up some onsite consumption regulations.
Responding to NOV’s
My words of advice from this meeting is pay your taxes, and acknowledge enforcement when NOVs or Accusations are sent out. A no response is a bad response, any response is better. And thank you to the industry as a whole for supporting the hard decision that were made at this meeting and supporting my role on this board. I hope to continue to do what is right for this industry and fix the issues at hand. I have big shoes to fill but I feel confident that I will do just that.