Legislature(2017 - 2018)HOUSE FINANCE 519

02/20/2018 01:30 PM FINANCE

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Audio Topic
01:35:39 PM Start
01:37:16 PM HB273
02:28:48 PM HB299
02:53:04 PM Public Testimony
03:17:20 PM HB301
03:39:11 PM Public Testimony
03:52:26 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 299 EXTEND: ALCOHOLIC BEVERAGE CONTROL BOARD TELECONFERENCED
Heard & Held
-- Public Testimony --
+= HB 273 EXTEND: MARIJUANA CONTROL BOARD TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
+ HB 301 ALCOHOL LIC.: BEV DISPENSARY/RESTAURANT TELECONFERENCED
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
HOUSE BILL NO. 273                                                                                                            
                                                                                                                                
     "An Act extending the termination date of the                                                                              
     Marijuana Control Board; and providing for an                                                                              
     effective date."                                                                                                           
                                                                                                                                
1:37:16 PM                                                                                                                    
                                                                                                                                
ERIKA MCCONNELL, DIRECTOR, ALCOHOL AND MARIJUANA CONTROL                                                                        
OFFICE, introduced the PowerPoint presentation: "Alcohol                                                                        
and Marijuana Control Office." She turned to Slide                                                                              
2: "Agency and Board Structure:"                                                                                                
                                                                                                                                
     Alcohol and Marijuana Control Office                                                                                       
         Alcoholic Beverage Control Board                                                                                    
         Marijuana Control Board                                                                                             
                                                                                                                                
     The Alcohol and Marijuana Control Office serves both                                                                       
     the Alcoholic Beverage Control Board and the Marijuana                                                                     
     Control Board. The boards were two separate entities.                                                                      
                                                                                                                                
Ms. McConnell reviewed slide 3: "Marijuana Control Board                                                                        
Accomplishments":                                                                                                               
                                                                                                                                
  In nine months, developed and adopted the regulatory                                                                       
     structure for marijuana licensure through a robust                                                                         
     public process                                                                                                             
                                                                                                                                
   Between being constituted in July 2015 and present,                                                                       
     met over 24 times, including in each judicial district                                                                     
     each year as required by statute                                                                                           
                                                                                                                                
   Between June 2016 and present, approved 278 license                                                                       
     applications, denied 8 applications, and revoked 2                                                                         
     licenses                                                                                                                   
                                                                                                                                
    Opened 45 regulations projects, of which 8 are in                                                                        
     effect, and an additional 11 are adopted                                                                                   
                                                                                                                                
Representative Ortiz asked about  slide 3. He referenced the                                                                    
third bullet  point and asked  how the  application approval                                                                    
process  worked. Ms.  McConnell responded  that on  occasion                                                                    
the  board  tabled  an application  that  was  deficient  or                                                                    
incorrectly done. The applicant  was given an opportunity to                                                                    
correctly  complete the  application and  once approved  was                                                                    
included in  the 278  number. She  estimated that  between 6                                                                    
and 12  approved applications  had been  temporarily tabled.                                                                    
Representative Ortiz asked whether  there were currently any                                                                    
applications  in  an  indeterminate state.  She  recollected                                                                    
that one  or two  applications were  tabled during  the last                                                                    
board meeting.                                                                                                                  
                                                                                                                                
1:41:32 PM                                                                                                                    
                                                                                                                                
Representative Tilton asked  for a general idea  of how many                                                                    
applications  were  considered  in one  board  meeting.  Ms.                                                                    
McConnell  replied   that  the  board  reviewed   20  to  30                                                                    
applications  in one  meeting.  Representative Tilton  asked                                                                    
how many  applications were currently  pending for  the next                                                                    
meeting.  Ms.   McConnell  answered  that   the  application                                                                    
process went  through certain phases. Once  the applications                                                                    
were  reviewed  and  deemed  complete  by  staff  they  were                                                                    
reviewed  at the  next board  meeting. She  was aware  of 62                                                                    
applications  awaiting board  review but  was uncertain  how                                                                    
many were in the initial phase.                                                                                                 
                                                                                                                                
Representative   Kawasaki   had  questions   regarding   the                                                                    
licensing portion. He referred to  a sunset review from July                                                                    
2016. The  audit mentioned 122 issued  licenses. He wondered                                                                    
whether  approximately 150  licenses were  issued since  the                                                                    
audit.   Ms.   McConnell   answered  in   the   affirmative.                                                                    
Representative Kawasaki asked if  each type of licenses took                                                                    
a different amount of time  to review. Ms. McConnell replied                                                                    
that each  license application was "  extensive" and certain                                                                    
license types took  a significant amount of  time to review.                                                                    
She  relayed  that  product manufacturers  licenses  had  to                                                                    
obtain  approval   for  each  product  they   produced.  One                                                                    
licensee had 91 products that  needed approval, so the staff                                                                    
had to review each one  for compliance with the regulations.                                                                    
Representative  Kawasaki asked  about an  average wait  time                                                                    
from the time the  applicant submitted the application until                                                                    
it was reviewed  by the board. He shared that  he heard from                                                                    
potential  licensees  waiting  for the  regulatory  approval                                                                    
process. He  remarked that more  license examiners  were not                                                                    
yet hired,  and the  license application process  was backed                                                                    
up. He wanted to better  understand where the delays were to                                                                    
help expedite the process.                                                                                                      
                                                                                                                                
1:46:12 PM                                                                                                                    
                                                                                                                                
Ms. McConnell  referred to a  Flow Chart from  February 2017                                                                    
from the  control office (copy  on file) and  explained that                                                                    
the entire  process took  approximately 6  to 7  months. She                                                                    
elucidated that  the primary reason for  the lengthy process                                                                    
was staff  turnover. As  of November  2017, the  office only                                                                    
had  three  license  examiners and  were  granted  two  more                                                                    
positions in  FY 2018 that  were hired after  November 2017.                                                                    
However,  the  office  had   received  950  alcohol  renewal                                                                    
applications  and the  new staff  was limited  to processing                                                                    
the  renewals.   Recently,  one   of  the   three  examiners                                                                    
resigned.  The  office  attempted to  keep  the  application                                                                    
process  moving forward.  Additionally, the  board was  very                                                                    
aware of the  need to keep the process  moving and scheduled                                                                    
an extra  meeting to accommodate  the review  of applicants.                                                                    
The  office   was  arduously  working  to   hire  and  train                                                                    
examiners.                                                                                                                      
                                                                                                                                
Representative  Kawasaki  asked  how Alcohol  and  Marijuana                                                                    
Control Office (AMCO) decided what  the examiners focused on                                                                    
between alcohol  and marijuana.  Ms. McConnell  replied that                                                                    
ideally every  examiner would be  able to handle  both types                                                                    
of applications. However,  examiners relayed challenges when                                                                    
switching  between  processing   for  both  substances.  The                                                                    
office tended  to allow specialization. She  determined that                                                                    
the best  structure was two  examiners assigned  to alcohol,                                                                    
two examiners  assigned for marijuana, and  one that floated                                                                    
between the  two depending on  marijuana license  renewal or                                                                    
alcohol license renewal periods.                                                                                                
1:49:36 PM                                                                                                                    
                                                                                                                                
Representative  Kawasaki asked  about  what the  legislature                                                                    
could do  to ease  the process. Ms.  McConnell was  not sure                                                                    
there was anything currently necessary.  The staff should be                                                                    
adequately trained, and  the backlog reduced in  the time it                                                                    
would take to hire and train new staff.                                                                                         
                                                                                                                                
Representative  Grenn complimented  Ms.  McConnell and  felt                                                                    
that AMCO had accomplished a lot  in a short time period. He                                                                    
inquired  about  sensitive  business  information  that  was                                                                    
required by applicants. He asked  whether the board acted to                                                                    
protect  the   information  or   change  the   process.  Ms.                                                                    
McConnell responded  that several break-ins had  occurred at                                                                    
various  marijuana facilities.  There was  a suspicion  with                                                                    
one  burglary  that  occurred in  December  2017,  that  the                                                                    
thieves  accessed  the  floor  plans  from  the  application                                                                    
proposal.  In response, AMCO  took two steps to mitigate the                                                                    
problem.  One  action  revised   the  application  form  and                                                                    
eliminated the requirement to show  the location of security                                                                    
cameras and devices  on the floor plan. The  second step was                                                                    
that once  an application  was considered  by the  board the                                                                    
floor  plan  diagram  was  removed  from  the  website.  The                                                                    
application was  included online  for the public  to provide                                                                    
input during the application process.                                                                                           
                                                                                                                                
Representative  Ortiz asked  whether  the staff  recommended                                                                    
approval or denial after the  initial reviewing process. Ms.                                                                    
McConnell responded  that the staff  completed a  cover memo                                                                    
that highlighted  dates and included opportunities  to raise                                                                    
issues. The staff  did not engage in the  approval or denial                                                                    
process but might  urge the board to take  a particular look                                                                    
at  something  specific  in an  application.  Representative                                                                    
Ortiz  asked  whether there  was  a  "commonality" in  board                                                                    
rejections. Ms. McConnell answered in the negative.                                                                             
                                                                                                                                
Representative  Tilton  asked  whether  the  staff  spent  a                                                                    
significant portion  of time reviewing  initial applications                                                                    
and  requesting  more  or  corrected  information  from  the                                                                    
applicants.  She  wondered  whether  the  licensing  process                                                                    
could  be streamlined  in any  way. Ms.  McConnell indicated                                                                    
the  staff  had  not  seen   a  "perfect"  application  when                                                                    
initially submitted. When staff  discovered errors a list of                                                                    
what  was  needed was  sent  to  the applicant.  The  office                                                                    
recently revised its forms, resulting  from what was learned                                                                    
and  experienced through  the application  process to  date.                                                                    
She recommended  that applicants should listen  to or attend                                                                    
board  meetings prior  to submitting  their application  and                                                                    
felt   that  the   applicants  had   a   certain  level   of                                                                    
responsibility for a correct application.                                                                                       
                                                                                                                                
1:56:22 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Gara  pointed out  that  the  cost of  labor  or                                                                    
commodities did  not change from  2019 to 2023  according to                                                                    
the  fiscal  note.  He  wondered  whether  the  board  would                                                                    
increase  license fees  as wages  and  costs increased.  Ms.                                                                    
McConnell replied that  she was not certain  of future needs                                                                    
and therefore  left the  numbers the same  in the  out years                                                                    
considering  the   board's  authority   to  alter   fees  as                                                                    
necessary.                                                                                                                      
                                                                                                                                
Co-Chair Foster asked members to  hold their questions until                                                                    
the end of the presentation.                                                                                                    
                                                                                                                                
Ms.  McConnell turned  to slide  4:  "Alcohol and  Marijuana                                                                    
Control  Office: Current  Organization." She  explained that                                                                    
the   organizational   structure    included   3   sections:                                                                    
Enforcement,  Administration, and  Licensing and  Education.                                                                    
The enforcement  section included one  Special Investigator,                                                                    
five  Special   Investigators,  and  one   Criminal  Justice                                                                    
Technician   based  in   Anchorage,  two   of  the   special                                                                    
investigators  were based  in Fairbanks  and one  in Juneau.                                                                    
The  licensing  and  education   section  included  a  Local                                                                    
Government Specialist that  performed community outreach for                                                                    
both alcohol  and marijuana  programs that  was added  in FY                                                                    
17. The  remaining positions were comprised  of Occupational                                                                    
Licensing Examiners and one administrative assistant.                                                                           
                                                                                                                                
Ms. McConnell  continued to  slide 5:  "Marijuana Regulation                                                                    
History":                                                                                                                       
                                                                                                                                
    November 2014: Voter initiative to regulate marijuana                                                                    
     like alcohol passes                                                                                                        
                                                                                                                                
    April 2015: HB123 establishes the Marijuana Control                                                                      
     Board (Sec. 2 Ch. 4 SLA 2015, primarily changes AS                                                                         
     17.38)                                                                                                                     
                                                                                                                                
    February 2016: Marijuana Control Board establishes                                                                       
     regulations, including fees for marijuana businesses                                                                       
     (enacted as 3 AAC 306)                                                                                                     
                                                                                                                                
    February   2016:    Marijuana     licensing    begins                                                                    
     (applications are accepted)                                                                                                
                                                                                                                                
    July 2016: Commercial marijuana operations begin                                                                         
                                                                                                                                
    October 2016: First retail marijuana store opens                                                                         
                                                                                                                                
    June 2017: First  renewal period  for  all  marijuana                                                                    
     licenses                                                                                                                   
                                                                                                                                
1:59:52 PM                                                                                                                    
                                                                                                                                
Ms. McConnell read from slide 6: "Marijuana Budget                                                                              
History":                                                                                                                       
                                                                                                                                
    November 2014: Voter initiative to regulate marijuana                                                                    
     like alcohol passes                                                                                                        
                                                                                                                                
    Spring 2015: UGF funding appropriated for  FY2015 and                                                                    
     FY2016 for program implementation ($2,360.1 UGF,                                                                           
     supplemental multi-year appropriation for FY2015-                                                                          
     FY2016)                                                                                                                    
                                                                                                                                
    Spring 2016: UGF and  GFPR  funding appropriated  for                                                                    
     FY2017 for continued  program operations ($1,470.7 UGF,                                                                    
     $100.0   GFPR)   Component  retitled   from   Alcoholic                                                                    
     Beverage Control Board (ABCB)  to Alcohol and Marijuana                                                                    
     Control Office (AMCO)                                                                                                      
                                                                                                                                
    Spring 2017: UGF and  GFPR  funding appropriated  for                                                                    
     FY2018 ($1,052.5 UGF, $756.6 GFPR)                                                                                         
  Intent language in the budget regarding marijuana fees                                                                        
                                                                                                                                
    Spring 2018: UGF and GFPR funding requested for FY2019                                                                   
     ($532.8 UGF, $1,282.6 GFPR)                                                                                                
  HB273 introduced to extend the Marijuana Control Board                                                                        
     HB299 introduced to extend the Alcoholic Beverage                                                                          
     Control Board                                                                                                              
                                                                                                                                
Ms. McConnell reported that AMCO expected to be fully                                                                           
supported by program receipts and carry forward funds by FY                                                                     
2020.                                                                                                                           
                                                                                                                                
Ms. McConnell read from slide 7: "Marijuana Fees":                                                                              
                                                                                                                                
    License and application fees are set by the Marijuana                                                                    
     Control Board in regulation (3 AAC 320)                                                                                    
    Fees were last set in February 2016                                                                                      
    Annual fees for  marijuana licenses  are  $1,000  for                                                                    
     limited  cultivation,   concentrate  manufacturing,  or                                                                    
     testing  licenses,  and  $5,000 for  retail,  unlimited                                                                    
     cultivation, and product manufacturing licenses                                                                            
    Application fees are  $1,000  for  new  and  transfer                                                                    
     applications and $600 for renewal applications                                                                             
    Half of each application fee is transferred from AMCO                                                                    
     to the appropriate local government                                                                                        
        o This is different than alcohol licensing revenue                                                                      
          transfers, which are transferred from the                                                                             
          Department of Revenue's tax                                                                                           
    collections to the appropriate local government                                                                          
    Intent language in the FY2017 budget                                                                                     
 The board will likely revisit fees in FY2019 or FY2020                                                                      
                                                                                                                                
Ms. McConnell advanced to slide 8: "Alcohol Fees":                                                                              
                                                                                                                                
    License fees are set by statute for all license types                                                                    
     in  statute;   licenses  created  by   regulation  have                                                                    
     license fees set by regulation                                                                                             
    Application fees are set by regulation                                                                                   
    Application fees were raised for the first time in at                                                                    
     least 20 years, to take effect 7/1/18                                                                                      
    Biennial fees for alcohol  licenses  range from  $400                                                                    
     (golf course license;  wholesale-malt beverage and wine                                                                    
     license) to $2,500 (beverage dispensary license)                                                                           
    Application fees  are  $100  for  new   and  transfer                                                                    
     applications and  $200 for renewal  applications; these                                                                    
     are   increased   to   $500  for   new   and   transfer                                                                    
     applications   and  $300   for  renewal   applications,                                                                    
     beginning 7/1/18                                                                                                           
    License fees are transferred to the appropriate local                                                                    
     government  from   the  Department  of   Revenue's  tax                                                                    
     collections  upon  showing   of  local  enforcement  of                                                                    
     applicable laws                                                                                                            
                                                                                                                                
2:04:55 PM                                                                                                                    
                                                                                                                                
Ms. McConnell highlighted the intent language on slide 9:                                                                       
"2017 Legislative Intent Language":                                                                                             
                                                                                                                                
     Development, Alcohol and Marijuana Control Office                                                                          
     Operating Budget (CCS HB 256)                                                                                              
                                                                                                                                
          It is the intent of the legislature that the                                                                          
          Department of Commerce, Community and Economic                                                                        
          7 Development, Alcohol and Marijuana Control                                                                          
          Office, set marijuana application and licensing                                                                       
          8 fees to cover the cost of regulation and                                                                            
          recover unrestricted general fund appropriations                                                                      
          made                                                                                                                  
          9 in prior fiscal years while the program was                                                                         
          being established.                                                                                                    
                                                                                                                                
Ms. McConnell  moved to slide  10: "AMCO Budget  History and                                                                    
Projection." She  highlighted that  in both  FY 2016  and FY                                                                    
2017  expenditures were  less than  revenues and  some funds                                                                    
were  returned   to  the  general  fund   (GF)  for  alcohol                                                                    
operations.                                                                                                                     
                                                                                                                                
2:05:43 PM                                                                                                                    
                                                                                                                                
Ms.  McConnell   indicated  that   slide  11   "Alcohol  and                                                                    
Marijuana  Control  Office:   Current  Organization"  was  a                                                                    
duplicate  slide  from  earlier  in  the  presentation.  She                                                                    
turned to  slide 12: "Alcohol and  Marijuana Control Office:                                                                    
Organization  to  Support   One  Regulated  Substance."  She                                                                    
offered that  slide 12 was  the same duplicate  denoting the                                                                    
positions  that would  be eliminated  if one  of the  boards                                                                    
were  not   extended.  She   detailed  that   three  special                                                                    
investigators and  the criminal justice technician  would be                                                                    
eliminated  from the  enforcement section,  two occupational                                                                    
licensing examiners  and one  supervisor from  the licensing                                                                    
and  education  section,  and the  administrative  assistant                                                                    
from the director's office would all be eliminated.                                                                             
                                                                                                                                
Representative  Kawasaki cited  the fee  structure on  slide                                                                    
10.  He asked  why  license  fees for  alcohol  were set  by                                                                    
statute  and  the  marijuana  licensing  fees  were  set  by                                                                    
regulation. Ms. McConnell was unable  to answer the question                                                                    
regarding   alcohol  licensing.   She  explained   that  the                                                                    
marijuana statutes  were initially adopted from  the voter's                                                                    
initiative  and  were limited.  Some  of  the statutes  were                                                                    
further developed  by the legislature  in 2016. Many  of the                                                                    
rules relating  to the marijuana program  were in regulation                                                                    
unlike alcohol,  where most were in  statute. Representative                                                                    
Kawasaki  asked whether  the alcohol  program  had the  same                                                                    
rules when  setting fees. Ms.  McConnell explained  that the                                                                    
alcohol program was required to  be self-supporting like the                                                                    
marijuana  program.  Representative  Kawasaki asked  if  the                                                                    
alcohol  fee structure  was in  statute.  Ms. McConnell  was                                                                    
uncertain  and  would  follow  up.  Representative  Kawasaki                                                                    
reported that  the marijuana program  was required  to repay                                                                    
the  initial   general  fund  expenditures.  He   asked  how                                                                    
repayment would  be accomplished through the  fee structure.                                                                    
Ms. McConnell  replied that essentially  the office  had one                                                                    
year of  data with all  the licenses renewing.  However, she                                                                    
was uncertain how  the licensure would settle  out; how many                                                                    
licenses would  remain viable and  supported by  the public.                                                                    
She needed  a few more years  of data to be  able to project                                                                    
expenses and  revenues and set  fees that would  recover the                                                                    
funding. Representative  Kawasaki asked  if the  board would                                                                    
set  the fees  to meet  the  goals and  requirements of  the                                                                    
repayment   mandate.   Ms.   McConnell  responded   in   the                                                                    
affirmative.                                                                                                                    
                                                                                                                                
2:09:58 PM                                                                                                                    
                                                                                                                                
Representative  Wilson  asked   whether  the  Department  of                                                                    
Commerce,  Community and  Economic  Development (DCCED)  was                                                                    
planning to submit a new  fiscal note that reported the $1.5                                                                    
million in  GF expense  that would  eventually be  repaid to                                                                    
the general  fund. Ms. McConnell explained  that because the                                                                    
office was still  requesting GF to support  the program. The                                                                    
office was  proposing to delay  repayment until  the program                                                                    
was self-sufficient.                                                                                                            
                                                                                                                                
2:11:21 PM                                                                                                                    
                                                                                                                                
Representative Wilson suggested a  current fee adjustment in                                                                    
anticipation   of   repayment   might  be   necessary.   She                                                                    
reiterated  that the  fiscal  note did  not  reflect the  GF                                                                    
obligation. She wanted the   board to become self-sufficient                                                                    
sooner  rather than  later.  Representative Wilson  inquired                                                                    
about  the  exorbitant  cost  of   an  alcohol  permit.  Ms.                                                                    
McConnell responded that alcohol  licenses were capped based                                                                    
on population.  She explained that certain  types of alcohol                                                                    
licenses;  beverage dispensary  licenses (bar  licenses) and                                                                    
package  store  licenses  were limited  by  population.  The                                                                    
situation created  a secondary  market for the  licenses and                                                                    
was  a  private  transaction between  two  individuals;  the                                                                    
money was not part  of the licensing program. Representative                                                                    
Wilson wondered  whether the  board tracked  active licenses                                                                    
and  licenses that  were not  being utilized.  Ms. McConnell                                                                    
indicated   that   minimum   operation   requirements   were                                                                    
established  that mandated  operating  a  certain number  of                                                                    
hours each  year or a  waiver was necessary. The  board only                                                                    
issued  a  limited number  of  waivers  via regulation.  The                                                                    
licenses could not be hoarded.                                                                                                  
                                                                                                                                
2:15:38 PM                                                                                                                    
                                                                                                                                
Vice-Chair Gara  asked how the  boards attempted to  be cost                                                                    
neutral  through its  fee structure.  Ms. McConnell  replied                                                                    
that  for  the  alcohol  program the  refund  to  the  local                                                                    
government came  from taxes and  did not affect  the board's                                                                    
budget. She elaborated that  the marijuana program collected                                                                    
2 fees; a licensing fee  and an application fee. The license                                                                    
fee was higher than the  application fee. The licensure fees                                                                    
were retained entirely, which could  be adjusted to help the                                                                    
program  become self-sufficient.  Vice-Chair Gara  asked for                                                                    
clarification.  He  inquired   about  remittances  to  local                                                                    
governments.  Ms. McConnell  clarified that  on the  alcohol                                                                    
side, local government assessed  and collected taxes and was                                                                    
a  function   of  the  Department  of   Revenue  (DOR).  She                                                                    
clarified that  on the  marijuana side  the money  came from                                                                    
the application  fees and half  of the amount  collected was                                                                    
refunded  to the  local government.  The state  retained the                                                                    
other half of the fees.  Vice-Chair Gara referenced the same                                                                    
issue as the inquiry  made by Representative Grenn regarding                                                                    
floor  schematics as  part of  the marijuana  licensure. Ms.                                                                    
McConnell  reiterated  that  the marijuana  application  was                                                                    
placed  online  for  the  benefit  of  the  public  and  the                                                                    
regulation deeming application  documents public records was                                                                    
set in statute. She reminded  that the licensees premise was                                                                    
part  of the  application but  once  the board  ruled on  an                                                                    
application  AMCO removed  the diagram  online and  was only                                                                    
made  available via  a  public  records request.  Vice-Chair                                                                    
Gara asked why a floor plan  had to be posted. Ms. McConnell                                                                    
replied that  the internet  was the  easiest way  to provide                                                                    
access  to the  public and  the regulations  provided for  a                                                                    
thorough  public process  that included  viewing the  entire                                                                    
application.                                                                                                                    
                                                                                                                                
2:19:53 PM                                                                                                                    
                                                                                                                                
Representative Ortiz  asked whether the use  of marijuana on                                                                    
site was  not allowed anywhere  in the state.  Ms. McConnell                                                                    
answered  that the  prohibition for  onsite use  covered the                                                                    
entire   state.  Representative   Ortiz   asked  about   the                                                                    
reasoning  behind the  on-site  consumption ban  and if  the                                                                    
board considered the revenues  gained through elimination of                                                                    
the  prohibition. Ms.  McConnell answered  in the  negative.                                                                    
She  related  that  the provision  in  statute  contemplated                                                                    
onsite  consumption  as part  of  a  retail outlet  but  was                                                                    
subject  to  development  of   the  regulations.  The  board                                                                    
embarked  on a  regulation development  project in  February                                                                    
2016  that was  open  to public  comment  and voted  against                                                                    
adopting the regulations. In March  2017, the board reopened                                                                    
a new regulatory  project on onsite consumption  that was in                                                                    
progress.  Representative  Ortiz  asked  if  the  number  of                                                                    
alcohol licenses was capped. Ms.  McConnell responded in the                                                                    
affirmative.  Representative  Ortiz questioned  whether  the                                                                    
marijuana licenses would be  capped. Ms. McConnell responded                                                                    
that  she  was  uncertain  whether a  limit  would  ever  be                                                                    
established.                                                                                                                    
                                                                                                                                
Representative  Thompson  cautioned  that   a  bill  [SB  63                                                                    
Regulation of  Smoking - Adopted 5/12/2018]  that prohibited                                                                    
smoking  in   public  buildings   was  moving   through  the                                                                    
legislature.  He asked  how a  smoking prohibition  would be                                                                    
affected by  adoption of  onsite marijuana  consumption. Ms.                                                                    
McConnell understood  that the bill contained  a "carve out"                                                                    
provision  that  allowed  for  marijuana  consumption  in  a                                                                    
stand-alone   marijuana  retail   store.  However,   smoking                                                                    
marijuana  in  a marijuana  store  that  was not  "discrete"                                                                    
would  be prohibited.  She reminded  committee members  that                                                                    
other methods of marijuana consumption  existed and might be                                                                    
universally    legal    in    marijuana    retail    stores.                                                                    
Representative  Thompson asked  about common  walls and  the                                                                    
exclusion. Ms.  McConnell understood  that the  retail store                                                                    
was  supposed  to be  an  entirely  separate and  standalone                                                                    
building.                                                                                                                       
                                                                                                                                
2:24:17 PM                                                                                                                    
                                                                                                                                
Representative  Ortiz  asked  how  often the  board  met  to                                                                    
review  licenses.  Ms.  McConnell  responded  that  once  an                                                                    
application was  deemed complete  the board  had 90  days to                                                                    
offer a ruling.  She added that the  board met approximately                                                                    
every two  and one-half  months. Representative  Ortiz asked                                                                    
whether the board  could meet more often to  clear a backlog                                                                    
of applications.  Ms. McConnell observed that  currently the                                                                    
backlog  was produced  at the  staff level  and she  was not                                                                    
sure  if  adding board  meetings  was  an effective  way  to                                                                    
address a  backlog if  the applications  were not  ready for                                                                    
board review.  The board typically  still met if  the number                                                                    
of applications  was lower than  what was  usually addressed                                                                    
in one meeting.                                                                                                                 
                                                                                                                                
2:26:30 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:27:53 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Vice-Chair Gara  noted that the  committee had  heard public                                                                    
testimony on HB 273.                                                                                                            
                                                                                                                                
HB  273  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                

Document Name Date/Time Subjects
HB299 Supporting Document Audit 11.17.17.pdf HFIN 2/20/2018 1:30:00 PM
HB 299
HB301 Supporting Documents ABC Memo Tourism BDL 9.13.17.pdf HFIN 2/20/2018 1:30:00 PM
HB 301
HB301 Supporting Documents ABC Memo Duck Inn 1.23.18.pdf HFIN 2/20/2018 1:30:00 PM
HB 301
HB301 Sponsor Statement 1.24.18.pdf HFIN 2/20/2018 1:30:00 PM
HB 301
HB301 Supporting Documents ABC Memo Tourism BDL 1.23.18.pdf HFIN 2/20/2018 1:30:00 PM
HB 301
HB301 Supporting Document Tailgaters Sports Bar Letter 1.31.18.pdf HFIN 2/20/2018 1:30:00 PM
HB 301
CSHB301 ver M Sectional Analysis 2.12.18.pdf HFIN 2/20/2018 1:30:00 PM
HB 301
HB299 Sponsor Statement 1.29.18.pdf HFIN 2/20/2018 1:30:00 PM
HB 299
HB 273 Alcohol and Marijuana Control Office House Finance 2-20-18.pdf HFIN 2/20/2018 1:30:00 PM
HB 273
HB 273 MarijuanaFlowChart.pdf HFIN 2/20/2018 1:30:00 PM
HB 273
HB 273 HB 273 HFIN Followup final.pdf HFIN 2/20/2018 1:30:00 PM
HB 273
CSHB301 Explanation of Changes ver M to ver E 2.19.18.pdf HFIN 2/20/2018 1:30:00 PM
HB 301
CSHB301 ver E 2.16.18.pdf HFIN 2/20/2018 1:30:00 PM
HB 301
CSHB301 ver E Sectional Analysis 2.19.18.pdf HFIN 2/20/2018 1:30:00 PM
HB 301