Legislature(2019 - 2020)BELTZ 105 (TSBldg)
02/14/2019 01:30 PM Senate LABOR & COMMERCE
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| Presentation: the State of Entrepreneurship in Alaska | |
| Confirmation Hearing(s): | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
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| += | SB 16 | TELECONFERENCED | |
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ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
February 14, 2019
1:30 p.m.
MEMBERS PRESENT
Senator Lora Reinbold, Chair
Senator Mia Costello, Vice Chair
Senator Click Bishop
Senator Chris Birch
Senator Elvi Gray-Jackson
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
PRESENTATION: THE STATE OF ENTREPRENEURSHIP IN ALASKA BY THE
CENTER FOR ECONOMIC DEVELOPMENT ~ UNIVERSITY OF ALASKA.
- HEARD
CONFIRMATION HEARING(S):
Marijuana Control Board
Christopher Jaime - Soldotna
- CONFIRMATION ADVANCED
Alcoholic Beverage Control Board
Charlie Cross - Nome
- CONFIRMATION ADVANCED
SENATE BILL NO. 16
"An Act relating to certain alcoholic beverage licenses and
permits; and relating to the bond requirement for certain
alcoholic beverage license holders."
SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record.
WITNESS REGISTER
NOLAN KLOUDA, Executive Director
Center for Economic Development
Business Enterprise Institute
University of Alaska Anchorage
Anchorage, Alaska
POSITION STATEMENT: Presented a PowerPoint on Entrepreneurship
in Alaska.
CHRISTOPHER JAIME, Appointee
Marijuana Control Board
Division of Corporations, Business and Professional Licensing
Department of Commerce, Community and Economic Development
Soldotna, Alaska
POSITION STATEMENT: Testified as appointee to the Marijuana
Control Board.
CHARLIE CROSS, Appointee
Alcoholic Beverage Control Board
Division of Corporations, Business and Professional Licensing
Department of Commerce, Community and Economic Development
Nome, Alaska
POSITION STATEMENT: Testified as appointee to the Alcoholic
Beverage Control Board.
CHELSEA FOSTER, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified during the confirmation hearing
for appointee Christopher Jaime to the Marijuana Control Board.
CALEB SAUNDERS, Chief Executive Officer
Green Jar
Wasilla, Alaska
POSITION STATEMENT: Testified during the confirmation hearing
for Christopher Jaime, appointee to the Marijuana Control Board.
RYAN TUNSETH, Owner
East-Rip
Kenai, Alaska
POSITION STATEMENT: Testified in support of appointee
Christopher Jaime, appointee to the Marijuana Control Board.
ACTION NARRATIVE
1:30:55 PM
CHAIR LORA REINBOLD called the Senate Labor and Commerce
Standing Committee meeting to order at 1:30 p.m. Present at the
call to order were Senators Costello, Bishop, Gray-Jackson,
Birch, and Chair Reinbold.
^PRESENTATION: The State of Entrepreneurship in Alaska
PRESENTATION: The State of Entrepreneurship in Alaska by the
Center for Economic Development, Business Enterprise Institute,
University of Alaska.
1:31:50 PM
CHAIR REINBOLD announced that the first order of business would
be a presentation titled, "The State of Entrepreneurship in
Alaska," by the Center for Economic Development, Business
Enterprise Institute, University of Alaska.
1:33:02 PM
NOLAN KLOUDA, Executive Director, Center for Economic
Development (CED), Business Enterprise Institute, University of
Alaska (UAA) said that during the last year the CED, has
performed a series of studies that highlight entrepreneurship,
its economic importance, and how entrepreneurs contribute to the
state. The center also looked at the demographics of women in
entrepreneurship and emerging sectors in Alaska with high growth
potential. He related that the CED uses applied research to
institute programs and services to assist beginning
entrepreneurs. The CED becomes the generator of information and
research, which it uses to inform its programming.
1:34:29 PM
MR. KLOUDA said that Senator Costello took leadership in the
proclamation that 2019 is the "Year of innovation." The spirit
of this proclamation has helped shape some of the CED's work.
He turned to slide 2 of his PowerPoint, "Q1 2017." He said that
the committee has seen a presentation on Alaska's overall job
status by from the Department of Labor and Workforce Development
(DOLWD). That data suggests that Alaska is coming out of a state
recession and forecasts positive job growth this year, after the
state has seen declining jobs in the last few years. Between
2017-2018, the state lost 1,645 jobs but startups created 5,100
jobs in Alaska. He saw startup businesses do a lot of heavy
lifting when it comes to creating jobs and prosperity in the
private sector.
1:35:49 PM
MR. KLOUDA turned to slides 3-4, "New employer firms in Alaska"
and "Alaska jobs created by new firms." He reported that about
1,100 new firms were added in 2018. What is interesting about
this is that the recession in the last three years in Alaska
does not seem to have depressed startups. Each new business
creates about four or five new jobs with an overall effect of
creating a total of 5,100 jobs in 2018. He estimated that the
state currently has between 17,000-18,000 businesses.
1:37:03 PM
MR. KLOUDA turned to slide 5, "Startups Provide the Net Margin
of New Jobs." He referred to a graph that depicts ten years of
data prior to the recession. This graph shows that the number of
jobs created and lost in the private sector is nearly equal. He
characterized it as a churn in the economy with new businesses
expanding at the same time other businesses are closing. Startup
businesses add the net margin of new jobs to the economy. In
fact, almost by definition, the startups are the major source of
new jobs, he said.
1:38:59 PM
SENATOR BIRCH asked him if he had a sense of the types of
startup businesses and whether these businesses are food trucks,
engineering firms, or other types of businesses.
MR. KLOUDA answered that many new businesses tend to be related
to accommodation and food service that are tied to construction,
health care, including smaller private practices and clinics,
and retail businesses associated with the visitor industry.
1:40:09 PM
MR. KLOUDA turned to slide 6, "Only 50 percent of firms survive
to Year 5." Often people wonder whether startup jobs are
valuable and enduring if they close within the first five years.
He referred to the bar charts that indicate that after one year
about 25 percent of the businesses have closed and by the fifth
year, nearly half of the firms have closed.
1:41:25 PM
SENATOR BISHOP asked whether the CED performs exit surveys to
determine the trend or causes of businesses that close.
MR. KLOUDA said some data captures the reasons that businesses
fail. Usually it is a combination of cash-flow challenges and
the cost of health care insurance. However, often the market and
customers do not materialize in the way that businesses
anticipated. He acknowledged that a number of inherent risks can
adversely affect businesses, including unrealistic expectations
and financial management issues and decisions.
1:42:36 PM
MR. KLOUDA turned to slide 7, "But surviving firms nearly
double in size." He reported that by year five, the firms have
doubled in size, which economists call "up or out." These new
businesses will either close or they will expand. The net effect
is that business growth offsets any job losses when firms close.
1:43:28 PM
MR. KLOUDA turned to slide 8, "From 2005-2014, young firms
created 89 percent of Alaska's net private employment growth."
Young firms added 89 percent of Alaska's new private jobs to
Alaska's economy, he said. He characterized this as a pipeline
of jobs that are pushed into the private sector. This is true
for any state and for the nation as a whole.
This slide also emphasizes why programs like the CED devote a
lot of its resources to strengthen entrepreneurship in Alaska,
he said. The CED works to provide support for entrepreneurs and
to create a more positive economic environment for them.
1:44:50 PM
MR. KLOUDA turned to slide 9 to a map of Alaska showing the
number of firms per capita in Alaska. He acknowledged that
Alaska is diverse. The CED tends to spend significant effort on
the rural economy, particularly in distressed regions. This
slide attempts to identify and measure parts of the state that
are more entrepreneurial. The CED measured the number of
employer businesses per 1,000 residents. It discovered that
Skagway had the most businesses per capita in Alaska with 100
firms per 1,000 residents. This is due to an influx of nearly
one million summer visitors, primarily via the cruise industry.
The statewide average is 25 businesses per capita, which is
fairly close to the national average. He pointed out an area in
the Denali Borough has a small population and a large number of
seasonal visitors. The visitor industry is a major stimulus for
entrepreneurship, he said. Western and Arctic Alaska tend to
have fewer firms; for example, Kusilvak has 5 firms per capita,
which is very low.
1:47:31 PM
SENATOR COSTELLO said she was curious about the average cost for
startups and the source of their initial capital.
MR. KLOUDA recalled seeing some data that breaks it into
categories. He said that about two-thirds of businesses start
with personal and family savings.
1:48:49 PM
SENATOR GRAY-JACKSON referred to Anchorage's "49th State Angel
Fund," and asked how many businesses have benefitted from it.
MR. KLOUDA said he was unsure. He said the next portion of his
presentation will cover "Women and Entrepreneurship in Alaska,"
and he will provide some figures. In response to Chair Reinbold,
he offered to provide a contact and the publication. He
summarized that slide 9 shows the urban-rural divide, with the
caveat that some rural areas have a high-volume influx of
seasonal visitors due to fishing.
1:50:29 PM
MR. KLOUDA turned to slide 10, "More startup jobs are created in
cities." He reported on startup jobs produced in three regions:
Anchorage/Mat-Su combined with 5.3 jobs per startup, the
Fairbanks North Star Borough (FNSB) with 4.8 jobs per startup,
and non-metro Alaska with 3.2 jobs per startup. Companies in
urban areas hire more people than those in rural areas, he said.
This mirrors the national trend, with large urban areas growing
much faster than rural ones. It also supports the trend of
increased success for businesses in urban areas, he said.
1:51:58 PM
MR. KLOUDA turned to slide 11, "How does Alaska compare to other
states?" He stated that the Kauffman Foundation performs an
index of entrepreneurship by state. Of the 50 states, Alaska
ranks in the top two or three for the propensity to start
businesses. However, in terms of the tendency to grow a
business, Alaska ranks 44th, near the bottom of the list. The
Kauffman Foundation measures businesses with 50 employees for
this ranking, he added.
1:53:22 PM
SENATOR BISHOP said it would be interesting to tease out the
numbers on "Alaska's Achille's heel," or its economy of scale,
based on its population. He expressed an interest in whether
startups in business after five years fall in high-population
areas of the state.
MR. KLOUDA agreed with the scale issue in Alaska since it only
has 740,000 people, which is a small market for many businesses.
Some businesses exhaust the market in Alaska and eventually move
out of state to reach larger markets. Senator Bishop's point
about population density and success is also probably valid. He
has sometimes heard that Alaskans lack strong entrepreneurship.
However, he disagreed since his data shows the tendency of
people in Alaska starting businesses is very high.
1:55:07 PM
MR. KLOUDA turned to slide 12, "Demographics." He said that
business owners are less likely to be members of an ethnic
minority group, are more likely to be male, and tend to have
significant personal savings. He said that wage gaps for women
and minorities tend to contribute to a gap in business
ownership. He said additional research could still be done.
Surprisingly, there is the perception of young tech
entrepreneurs. However, the average age for entrepreneurs is 40.
He reported that the Massachusetts Institute of Technology (MIT)
did a study on the fastest growing companies that received
venture capital. The study showed the average age for company
founders is 44, that half of Alaska's business owners are 55 or
older, and many are over 65. Only six percent of business owners
are under the age of 35, he said.
1:57:31 PM
MR. KLOUDA turned to slide 13, to the second part of the
PowerPoint, titled "Women and Entrepreneurship in Alaska."
MR. KLOUDA turned to slide 14, "Business Ownership & Gender,"
and stated that Alaska has the highest share of women-owned
businesses in the nation. Still, the research showed there are
two male-owned businesses for every female-owned business in the
state, or a 2-1 gap, with an equal share of men/women owned
businesses. However, at the national level the gap is 3-1. He
said the wage-earning gap may contribute to women's' ability to
leverage savings. He concluded that investment is heavily skewed
against female entrepreneurs.
1:59:06 PM
MR. KLOUDA turned to slide 15, and related that only about 2.2
percent of the investment capital in the country goes to a firm
owned by women. He recalled a study done by Forbes that showed
businesses founded by women tend to get better operating results
and produce higher returns despite the gap.
1:59:46 PM
CHAIR REINBOLD asked for the reason for the low venture capital
rates for women-owned businesses.
MR. KLOUDA responded that it seems to point to a bias by
investors who posed questions during "pitch sessions" that
seemed to be different than ones posed to male entrepreneurs. He
suggested that investors are more skeptical of women founders.
2:00:40 PM
SENATOR BISHOP asked for further clarification on the rate of
return and operating results for male-owned firms.
MR. KLOUDA offered to double check the figures, but he
reiterated that female entrepreneurs generated a 41 percent
higher return on equity and had 58 percent better operating
results than male entrepreneurs.
SENATOR BISHOP said that if he was loaning money, it would be a
slam-dunk for him.
CHAIR REINBOLD agreed.
MR. KLOUDA stated that Senator Gray-Jackson previously asked
about the 49th State Angel Fund. He did not recall the exact
breakdown, but he reported that the investment dollars were much
higher for investment in women-owned businesses.
2:01:49 PM
SENATOR GRAY-JACKSON directed attention to pages 13-14 of a
handout in members' packets "Women and Entrepreneurship in
Alaska for information about the 49th State Angel Fund.
2:02:21 PM
MR. KLOUDA said that women of an ethnic minority group only
receive two-tenths of one percent of venture capital, which is
an even greater gap, that warrants further attention.
2:02:53 PM
MR. KLOUDA turned to slide 16, "Business Ownership & Ethnicity."
He reported that 89 percent of Alaskan business owners are of
European descent, but they only represent about 66 percent of
the population. He pointed out the bar graph that shows the
disproportionate ethnic ownership.
2:03:29 PM
SENATOR BISHOP expressed interest in seeing this slide with an
overlay of the state's demographics. He said it appeared to
represent the trend in Alaska based on population.
MR. KLOUDA answered that this compares the share of business
owners to the share of population, so it does tend to overlay
business ownership with the general population. He acknowledged
the non-minorities represent a larger percentage of business
owners than the general population.
SENATOR BISHOP stated that Alaska Natives are the fastest
growing population in the state.
MR. KLOUDA said Alaska Natives represent about 20 percent of the
population, but they have a much smaller share of business
owners. He said that this data examines businesses owned by
individuals, or a small number of individuals, but it does not
include shareholder-owned corporations. He said that Alaska
Native Corporations are major players in the state's economy. He
offered his belief that some entrepreneurship in the Alaska
Native community is likely expressed through the Native
corporations, although it still points to an overall gap.
2:05:22 PM
MR. KLOUDA turned to slide 17 and shifted to the "CED's Emerging
Sector Series" portion of his PowerPoint. He said that the CED,
in partnership with Department of Commerce, Community and
Economic Development (DCCED), identified clusters of
entrepreneurial interest. The CED focused on entrepreneurs who
work in areas that are not necessarily getting a lot of
attention but are ones tied to an area of expertise in Alaska.
The CED identified some sectors that Alaska has expertise in,
including aviation and aerospace, outdoor products, renewable
energy, boat and ship building, and food and agriculture. He
said the agency interviewed entrepreneurs to learn about their
markets, and the reasons that Alaska makes sense for them to
operate in Alaska. The CED worked to identify their needs,
challenges, and opportunities.
2:07:02 PM
MR. KLOUDA turned to slide 18, to a photograph of a Sikorsky
helicopter flown by the Austrian Armed Forces in Europe. He
directed attention to the skis on the helicopter. Those skis
were built in Anchorage by a company, Air Glas, in a little shop
off of O'Malley Road. Air Glas makes carbon fiber skis, fuel
pods, storage containers and other fixtures for aircraft and
sells them to civil aviation companies and about 40 overseas
military organizations. He said Air Glas is a global leader
filling a specialty niche, but it operates in a small,
unpretentious shop in Anchorage.
2:08:05 PM
SENATOR BIRCH said Air Glas is in his district. He commended the
product and scale of this phenomenal business. He has personally
seen their products at JBER (Joint Base Elmendorf-Richardson) in
Anchorage.
2:08:33 PM
SENATOR COSTELLO asked whether Mr. Klouda could provide more
details on the company.
MR. KLOUDA said Air Glas was started by a WWII aviator, Wes
Landus, who began his business by doing basic Fiberglas work in
the 50s. The original owner sold the business and the new one
expanded into a model using carbon fiber high-tech materials.
The business continues to serve an Alaskan market of civil
aviators as well as an international market. He said that Alaska
has more aircraft than states like New York and Illinois.
He said that Alaska also has a deep well of knowledge in
aviation that spurs entrepreneurship and companies like this
one. However, Air Glas is not a unique company, that several
others make metal fabrication for specific aircraft components.
He said they are usually small, very high-value products that
are sold to global markets. He said that Aero Twin, Inc. is
located at Merrill Field and sells its products to companies in
sub-Saharan Africa and China. Aero Twin developed, created, and
submitted its products to the Federal Aviation Administration
(FAA) for approval. This gives them an exclusive right to create
the product, he said. Airframes Alaska is another company
located in Birchwood, he said. Alaska is a pioneer in aviation,
including developing and testing airplane floats and skis. The
Automatic Dependent Surveillancebroadcast (ADSB) system is a
surveillance technology in which an aircraft determines its
position via satellite navigation. This technology allows
tracking aircraft is now a global standard, but it was developed
and tested in Alaska. Some of the first non-military uses of
unmanned aircraft were developed and tested in Alaska in
conjunction with the University of Alaska Fairbanks.
2:11:39 PM
CHAIR REINBOLD said Birchwood is in her district. She pointed
out that Aircraft Wing Covers is a female-owned business located
in Eagle River. It makes covers for arctic insulated cowling and
wings, she said.
2:12:47 PM
MR. KLOUDA turned to slide 19, "9:ZERO:7." Alaska has also
developed outdoor gear, which is another area of expertise in
Alaska. This Alaska company, "9:ZERO:7, claims to have invented
the fat-tire bike. It was started by two Alaskans and was one of
the early companies to commercially produce a fat-tire bike.
Thee bikes are designed and based in Alaska and are a recognized
brand. Even though they are not manufactured in Alaska, they are
based here and sell nationally. He pointed out the bike bag
shown on the slide is made by Revelate Designs, LLC, also an
Alaskan-based company. He related that Alpacka Raft was
originally based in Alaska. That company initiated the modern
pursuit of packrafting, he said.
He said that Alaskans also know a lot about "playing outside."
All of the businesses who sell their products out of state brag
about their Alaska heritage. 9:Zero:7 advertises "Designed in
Alaska for All Conditions." Heather's Choice is a company that
makes pre-packaged, freeze-dried gourmet meals designed for
backpacking. These meals are being distributed around the
country, he said. The company was started by Heather Kelly, a
young Alaskan woman who has leveraged Alaska's outdoor
expertise. Nationally, significant venture capital is going
toward outdoor products, so it is an area with growth potential,
he said.
CHAIR REINBOLD remarked that Bambinos is another Alaska company
markets baby food internationally and showcases Alaska's salmon
and seafood.
2:15:47 PM
MR. KLOUDA remarked that the Alaska "brand" takes advantage of
the perception that Alaska has a pure and pristine environment,
especially as it relates to its fish and seafood.
2:16:16 PM
MR. KLOUDA turned to slide 20, "Applying Innovation to a
Traditional Industry." Boats and shipbuilding represent an
important footprint in Southeast Alaska. He said boatbuilding is
an old industry that has not changed much. In fact, boats are a
way of life for personal, commercial, and subsistence uses. He
directed attention to the left side of the slide, to the high-
density plastic being cut that will be welded into a boat. Class
5 Boatworks, LLC is a spinoff company in Fairbanks that
developed a very tough plastic. The plastic is used in high-
speed river boats since it can withstand rugged conditions and
not damage the boat. The company demonstrates how tough their
product is by encouraging people at boat shows to hit their
boats using a sledgehammer. A Wasilla company, [MMT Inc.} makes
AlumaSki boats. Their product is an aluminum jet ski boat with a
very shallow draft that allows people to travel very quickly
through glacial streams. Although the boat was originally
marketed for recreational use, the company found its market in
search and rescue. These boats can be used in Upper Cook Inlet
to rescue people caught in low tidal situations, he said.
2:18:41 PM
MR. KLOUDA turned to slide 21, "Emerging Sector Sprint: VOLT49."
He said the Center for Economic Development (CED) did reported
on renewable energy and energy efficiency. The purpose of the
research is to find insights and new knowledge that can be used.
In terms of the renewable energy sector, this sector tends to
provide more services and consulting but less products. For
example, Arctic Solar Ventures installs rooftop solar systems.
The CED has discovered that the public sector can help connect
entrepreneurs to other entrepreneurs, connect entrepreneurs to
sources of capital, or connect them to student interns. The
network support structure for entrepreneurs has shown to make
them more successful.
2:19:51 PM
SENATOR BISHOP asked if the CED assists these entrepreneurs and
if he is aware of the assets available for new business startups
via the Department of Labor and Workforce Development (DOLWD).
MR. KLOUDA answered yes. He said he is familiar with the DOLWD
workforce funds and apprenticeship programs and the CED uses
these resources. He remarked that it seems like larger employers
are more aware of the programs, even though smaller businesses
and startups often have unmet needs. He pointed out that firms
often look to the CED to find interns since the CED is part of
the university.
2:20:56 PM
MR. KLOUDA returned to slide 21, "Emerging Sector Sprint:
VOLT49." He said the photograph on this slide demonstrates
something Google has popularized. [Volt 49 is a renewable energy
sprint based on the Google Ventures' Sprint process. A sprint
gives innovators new skills to jump start potential business
ideas and quickly realize when an idea is doomed to fail.] He
explained that Google assembles teams and challenges them to
create a new product in a compressed timeframe. In five days,
the teams create a prototype. The Center for Economic
Development (CED) decided to try this approach with renewable
energy. The CED recruited teams for the Volt 49 sprint project.
These teams met five times over the course of a month. During
this time the CED taught the teams entrepreneurial tools and
processes related to innovation, including how to come up with
an idea, assess a customer need, and develop a rough prototype
that could be refined. The winning team developed a server that
can be powered by a renewable wind or solar power system. He
characterized it as hands-on training for entrepreneurs that is
effective. The CED has taken this training program to the UAA's
student population. This is a program that UAA would like to
continue, he said.
2:22:24 PM
MR. KLOUDA turned to Slide 22, "Other Observations." He directed
attention to the photograph of a backpack made by "Fishe Wear."
He said that Linda Leary launched Fishe Wear, using her colorful
designs to create fishing attire for women. He said the CED
wants entrepreneurs to lead the way with the CED providing
support for them. Businesses that are successful are ones that
find a niche or underserved market.
He said that significant research and development (R&D), is an
area where entrepreneurs create products, but capital access can
create challenges. Aviation businesses need to create new
projects to sustain growth. Many businesses have significant
upfront expenses an must absorb costs until their products are
marketed. These businesses have expressed an interest in
obtaining R&D tax relief, such as an incentive or credit for
state corporate income taxes.
MR. KLOUDA said that all of the sectors and the majority of the
businesses identified major workforce gaps. It might be a
shortage of skilled people to fill a specialty area or soft
skills. The business community has a small workforce and is one
that presents challenges. The CED works to connect entrepreneurs
to workforce resources. He noted that he interviewed someone
from a small company who holds a master's degree in aerospace
engineering from MIT and designs products in Anchorage. This
speaks to the level of talent in the entrepreneurial field that
is attracted to Alaska.
2:26:32 PM
SENATOR BISHOP thanked Senator Costello for her work last year
in holding innovation roundtables on the economy. He thanked
Chair Reinbold for today's presenter.
CHAIR REINBOLD thanked her staff.
2:27:21 PM
SENATOR COSTELLO said that having Mr. Klouda before the
committee is important. She related her understanding that
innovation drives the economy and Alaskans are natural
innovators. She said she hopes that the equity crowd investing
and Internal Revenue Code (IRC) Section 1202 C corporation
legislation that passed will also be helpful to businesses
looking for equity. She said it was nice to hear about the
entrepreneurs, especially the women entrepreneurs in Alaska.
^CONFIRMATION HEARING(S):
CONFIRMATION HEARING(S):
Marijuana Control Board
Alcoholic Beverage Control Board
2:29:15 PM
CHAIR REINBOLD announced that the next order of business would
be confirmation hearings for Christopher Jaime, appointee to the
Marijuana Control Board and Charlie Cross, appointee to the
Alcoholic Beverage Control Board.
2:29:31 PM
CHRISTOPHER JAIME, appointee, Marijuana Control Board, Soldotna,
Alaska, Division of Corporations, Business and Professional
Licensing, Department of Commerce, Community and Economic
Development (DCCED), stated that he works as a lieutenant in the
Division of Alaska Wildlife Troopers, Department of Public
Safety. He has lived in Alaska for 26 years and has been with
the department for 18 years.
2:30:31 PM
MR. JAIME stated that during his career he has worked in the
Division of Alaska Wildlife Troopers or the Division of Alaska
State Troopers in Anchorage, Sitka, Fairbanks, Nome, and
Soldotna. He has had a diverse career with the Department of
Public Safety (DPS). He has worked in urban and rural settings
to enforce wildlife statutes and regulations throughout Alaska.
He said he will bring his perspective to the Marijuana Control
Board. He related his understanding that Alaskans voted to
legalize the consumption, cultivation, and distribution of
marijuana. He said his focus is not to voice his personal view
of marijuana or to go against the will of the people. Instead,
he would like to take a common-sense approach and regulate
marijuana from a public safety perspective. He said he would be
receptive to the marijuana industry needs yet weigh all
decisions through the lens of law enforcement. He has already
been contacted by a local marijuana cultivator who briefed him
on the business and the challenges the industry faces. He has
also had an opportunity to speak with the owner of High Bush
Buds, a marijuana dispensary, who explained the retail marijuana
business. He has not been given any direction from the
administration on his appointment. He offered his belief that he
was selected to serve because of his training, experience, and
service to the state.
2:32:27 PM
CHAIR REINBOLD remarked that his resume is impressive. She said
she was pleased to have someone of his caliber fill the public
safety seat on the Marijuana Control Board.
2:33:18 PM
CHARLIE CROSS, Appointee, Alcoholic Beverage Control Board,
Division of Corporations, Business and Professional Licensing,
Department of Commerce, Community and Economic Development
(DCCED), stated he is a lifelong Alaskan who has lived in Nome,
Elim, and Kotzebue. He attended high school in Anchorage and
studied criminal justice at the University of Alaska Fairbanks.
He lived in Albuquerque, New Mexico, married, and moved back to
Alaska to pursue a career with the Alaska State Troopers and was
stationed in Fairbanks and Kodiak. He has also served as a
wildlife trooper and as an investigator on the Western Alaska
Alcohol and Narcotics team for the Statewide Drug Enforcement
Unit. He has conducted investigations for alcohol, drug
interdiction and postal inspector to address illegal alcohol
issues in Western Alaska. He was in charge of the Major
Offenders Unit, working directly with the Drug Enforcement
Administration (DEA), and the Federal Bureau of Investigation
(FBI). He moved to Nome in 2012 and was in charge of the post.
He said his passion and interest lies in Western Alaska. His
particular focus is on how alcohol is treated.
2:36:12 PM
MR. CROSS noted that he is personal friends with Mr. Rex Leath,
who currently serves on the ABC Board. He remarked that his
grandfather John Cross, was from Kansas but World War II brought
him to Kotzebue, where he was an aviator and entrepreneur. His
grandfather later served as a delegate to the Alaska
Constitutional Convention.
He said he is pleased and honored to serve on the Alcoholic
Beverage Control Board to make Alaska better in terms of
decisions related to alcoholic beverages.
2:37:50 PM
SENATOR BIRCH reviewed the MCB composition, with voting members
from public safety, public health, one residing in a rural area,
and two actively engaged in marijuana industry.
He asked whether Mr. Cross would serve on the rural seat.
MR. CROSS agreed he was appointed to serve in the rural seat,
since he retired from the Alaska State Troopers on October 1.
SENATOR BIRCH, after reviewing the function of the Marijuana
Control Board, shared his views on marijuana. He said he served
as co-chair of an organization that was opposed to the ballot
initiative for legalization of marijuana.
SENATOR BIRCH acknowledged that he referenced the Marijuana
Control Board and not the Alcoholic Beverage Control's Board
(ABC Board) composition and function. He recognized that Mr.
Cross is seeking confirmation to the ABC Board.
He asked for further clarification that Mr. Cross is serving in
the rural position.
MR. CROSS answered yes.
2:39:48 PM
SENATOR BISHOP said he was interested to see that Mr. Cross is a
financial coach and he obtained his training from the Dave
Ramsey Group.
MR. CROSS answered yes.
2:40:03 PM
SENATOR BISHOP remarked that he is glad to see that he spends
time at the Nome facility to work with inmates.
MR. CROSS responded that he has taught classes at the Anvil
Mountain Correctional Center.
2:40:35 PM
CHAIR REINBOLD opened public testimony the confirmation hearing
for Christopher Jaime, appointee to the MCB and Charlie Cross,
appointee to the ABC Board.
2:41:07 PM
CHELSEA FOSTER, representing self, said she would like to add
that Jeff Ankerfelt was a great addition to the Marijuana
Control Board and she is sad to see him go. She personally would
like to see Paul Honeman in the seat. She said that she hopes
[Christopher Jaime], if confirmed, will work with great tenacity
and diligence, with an open mind when it comes to making
decisions for this industry. As previously testified to, the
cannabis industry has added jobs and value to the state's
economy. She thanked the committee, especially Senator Birch,
for the committee's thorough evaluations of the appointees.
2:42:03 PM
CALEB SAUNDERS, Owner; Chief Executive Officer, Green Jar,
thanked Christopher Jaime for his public Safety service in
communities in Alaska. He appreciated that Mr. Jaime has
acquired so much experience for the seat. He welcomed him to the
MCB, if confirmed.
2:43:05 PM
CHAIR REINBOLD closed public testimony, then reopened public
testimony for the confirmation hearing for Christopher Jaime,
appointee to the Marijuana Control Board.
2:43:33 PM
RYAN TUNSETH, Owner, East-Rip, offered his support of appointee
Christopher Jaime to the Marijuana Control Board. He said he
owns a retail marijuana store in Kenai. He acknowledged that Mr.
Jaime has reached out to local marijuana businesses and they
informally related that their discussions were meaningful, and
that Mr. Jaime was willing to understand the inner workings of
the marijuana industry. He also received recommendations from a
friend. He asked his friend, who is a trooper, if Mr. Jaime
could be impartial and his friend answered, "You know we take an
oath for that."
He said he wanted to offer his support to demonstrate that
marijuana businesses are not against every appointee. He offered
his belief that Mr. Jaime is qualified for the seat and will
bring a sensible voice to the board. He said he deserves the
benefit of the doubt that he will make impartial decisions. He
echoed what Caleb Saunders said because he knows that board
meetings are time consuming. He appreciated the committee's
questions to candidates on whether they can be impartial.
2:45:33 PM
CHAIR REINBOLD, after first determining no one wished to
testify, closed public testimony on the confirmation hearing for
Christopher Jaime to the Marijuana Control Board and Charlie
Cross, to the Alcoholic Beverage Control Board.
2:45:51 PM
CHAIR REINBOLD clarified that Christopher Jaime is the appointee
to the Marijuana Control Board and Charlie Cross is the
appointee for the rural seat of the Alcoholic Beverage Control
Board.
2:46:36 PM
CHAIR REINBOLD stated that in accordance with AS 39.05.080, the
Senate Labor and Commerce Standing Committee reviewed the
following and recommends the appointments be forwarded to a
joint session for consideration:
Marijuana Control Board
Christopher Jaime - Soldotna
Alcoholic Beverage Control Board
Charlie Cross - Nome
[Signing the reports regarding appointments to boards and
commissions in no way reflects individual members' approval or
disapproval of the appointees; the nominations are merely
forwarded to the full legislature for confirmation or
rejection.]
2:47:05 PM
CHAIR REINBOLD reviewed upcoming committee announcements.
2:48:04 PM
There being no further business to come before the committee,
Chair Reinbold adjourned the Senate Labor and Commerce Standing
Committee meeting at 2:48 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Women and Entrepreneurship in Alaska - UAA Center for Economic Development - Nov. 2018.pdf |
SL&C 2/14/2019 1:30:00 PM |