Legislature(2015 - 2016)BUTROVICH 205

02/03/2015 09:00 AM Senate STATE AFFAIRS


Download Mp3. <- Right click and save file as

Audio Topic
09:02:12 AM Start
09:02:34 AM Continuing Discussion of the Implementation of Ballot Measure No. 2 (13psum) - an Act to Tax and Regulate the Production, Sale, and Use of Marijuana"
10:12:02 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ "Continuing Discussion of the Implementation of TELECONFERENCED
Ballot Measure No. 2 (13PSUM) - An Act to Tax
and Regulate the Production, Sale, and Use of
Marijuana"
<Invited Participant List Forthcoming>
                    ALASKA STATE LEGISLATURE                                                                                  
            SENATE STATE AFFAIRS STANDING COMMITTEE                                                                           
                        February 3, 2015                                                                                        
                           9:02 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Bill Stoltze, Chair                                                                                                     
Senator John Coghill, Vice Chair                                                                                                
Senator Charlie Huggins                                                                                                         
Senator Lesil McGuire                                                                                                           
Senator Bill Wielechowski                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
CONTINUING DISCUSSION OF THE IMPLEMENTATION OF BALLOT MEASURE                                                                   
NO. 2 (13PSUM) - AN ACT TO TAX AND REGULATE THE PRODUCTION~                                                                     
SALE~ AND USE OF MARIJUANA"                                                                                                     
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
See State Affairs minutes 1/22/15, 1/27/15, and 1/29/15                                                                         
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
JAY C. BUTLER, MD                                                                                                               
Chief Medical Officer, and Director                                                                                             
Division of Public Health                                                                                                       
Alaska Department of Health and Social Services                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Provided a medical perspective on marijuana.                                                              
                                                                                                                                
JEFF ROGERS, Manager                                                                                                            
Division of Administrative Services                                                                                             
Alaska Department of Environmental Conservation                                                                                 
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Explained the Department of Environmental                                                                 
Conservation's oversight for marijuana production.                                                                              
                                                                                                                                
ELAINE BUSSE FLOYD, Director                                                                                                    
Division of Environmental Health                                                                                                
Alaska Department of Environmental Conservation                                                                                 
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:  Explained  the Department  of  Environmental                                                            
Conservation's oversight for marijuana production.                                                                              
                                                                                                                                
MAJOR DENNIS CASANOVAS, Deputy Director                                                                                         
Division of Alaska State Troopers                                                                                               
Department of Public Safety                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT: Detailed  marijuana  criminal enforcement  by                                                            
the Alaska State Troopers.                                                                                                      
                                                                                                                                
CYNTHIA FRANKLIN, Executive Director                                                                                            
Alcoholic Beverage Control Board                                                                                                
Department of Commerce, Community, and Economic Development                                                                     
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:  Explained  the  Alcoholic  Beverage  Control                                                            
Board's involvement and oversight for marijuana licensing.                                                                      
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
9:02:12 AM                                                                                                                    
CHAIR  BILL  STOLTZE  called the  Senate  State  Affairs  Standing                                                            
Committee meeting  to order  at 9:02 a.m.  Present at the  call to                                                              
order  were Senators  Wielechowski,  Coghill,  Huggins, and  Chair                                                              
Stoltze.                                                                                                                        
                                                                                                                                
^Continuing  Discussion of  the Implementation  of Ballot  Measure                                                              
No.  2 (13PSUM)  - An  Act  to Tax  and  Regulate the  Production,                                                              
Sale, and Use of Marijuana"                                                                                                     
 Continuing Discussion of the Implementation of Ballot Measure                                                              
  No. 2 (13PSUM) - An Act to Tax and Regulate the Production,                                                               
                  Sale, and Use of Marijuana"                                                                               
                                                                                                                              
9:02:34 AM                                                                                                                    
CHAIR  STOLTZE announced  that  the  committee is  continuing  its                                                              
discussion  about   seeking  some   direction  on  the   citizen's                                                              
initiative that was approved by the voters on November 4, 2014.                                                                 
                                                                                                                                
9:05:01 AM                                                                                                                    
JAY C. BUTLER,  MD, Chief Medical Officer, and  Director, Division                                                              
of  Public  Health,   Alaska  Department  of  Health   and  Social                                                              
Services  (DHSS),  Anchorage,  Alaska,   noted  that  he  provided                                                              
testimony  the  previous  week   on  the  health  effects  of  the                                                              
recreational use of marijuana.                                                                                                  
                                                                                                                                
CHAIR STOLTZE  asked Dr. Butler  to review the recommendations  he                                                              
submitted to the committee.                                                                                                     
                                                                                                                                
DR.  BUTLER addressed  what the  legalization  of marijuana  means                                                              
for policy  development and implementation  with regard  to public                                                              
safety  and public  health. He noted  that Alaska  can learn  from                                                              
Colorado  and Washington  regarding  how marijuana  "edibles"  are                                                              
prepared and  marketed. The  states' allowed  Tetrahydrocannabinol                                                              
(THC)  concentrations  in edibles  are  very  high with  a  fairly                                                              
vague  definition  for  "serving;"  THC serving  sizes  have  been                                                              
reported to  be as high as 200  milligrams in a single  cookie. He                                                              
disclosed that  an appropriate  THC serving  size is somewhere  in                                                              
the  range of  5  to 10  milligrams,  a range  that  a feeling  of                                                              
intoxication begins.                                                                                                            
                                                                                                                                
He stated  that packaging  is also  of concern.  He revealed  that                                                              
packaging  with  humorous  connotations   confuses  children  when                                                              
logos  are  almost  identical to  other  commercial  products.  He                                                              
stated that sometimes  edible products really seem  to be marketed                                                              
to children where  brightly colored packages can  look like candy,                                                              
particularly for  a child who cannot  read or is grabbing  a snack                                                              
in  a  hurry.   He  asserted  that  marijuana   edibles  are  best                                                              
addressed by  defining a serving  size in addition  to identifying                                                              
child-proof containers  that have  limited quantities or  a single                                                              
serving. He  stated that he has  no recommendation whether  one of                                                              
those approaches is better than the other.                                                                                      
                                                                                                                                
9:08:14 AM                                                                                                                    
CHAIR  STOLTZE   noted  that   dosage  is   an  issue   where  the                                                              
initiative's  sponsor  indicated  that safety  regulation  was  an                                                              
appropriate role  for the state.  He asked how dosage  is supposed                                                              
to  be  determined  if  the  Alaska  Department  of  Environmental                                                              
Conservation   (DEC)   cannot  provide   recommendations   because                                                              
marijuana  is  an  illegal  product   on  the  federal  level.  He                                                              
inquired  how dosage  will be  determined if  state entities  that                                                              
are  constitutionally responsible  to  protect  public health  and                                                              
the regulation do  not provide guidance. He asked  if the Governor                                                              
should  come   out  with  a   dosage  recommendation  or   if  the                                                              
Commissioner  of  the Department  of  Health and  Social  Services                                                              
should provide some  guidance. He noted that he  verified that the                                                              
state  has a  constitutional  responsibility  and the  departments                                                              
that were created are given that charge.                                                                                        
                                                                                                                                
9:09:12 AM                                                                                                                    
SENATOR MCGUIRE joined the committee meeting.                                                                                   
                                                                                                                                
DR. BUTLER responded  that the dosage question  is fairly complex.                                                              
He  asserted  that  data  and science  indicates  that  a  smaller                                                              
dosage range  is an appropriate  serving. He said  identifying who                                                              
would  actually  do  the  product  testing  to  document  what  is                                                              
claimed  is  not an  easy  question.  He  added  that one  of  the                                                              
department's  sister  agencies indicated  that  testing  resources                                                              
are not  currently present due  to shrinking resources.  He stated                                                              
that  packaging   with  labeling  and  dosage   identification  is                                                              
important.                                                                                                                      
                                                                                                                                
CHAIR STOLTZE  noted that his comment  was not a  singular request                                                              
to Dr.  Butler, but rather a  broadcast message to  other agencies                                                              
and the  Governor's  office. He  said the committee  is trying  to                                                              
get  regulatory assistance  to  draw the  fine  lines that  direct                                                              
traffic. He asserted  that the state gets one  shot at regulation.                                                              
He  pointed   out  that  alcohol   is  government   regulated  and                                                              
monitored.  He   summarized  that   the  Legislature   needs  more                                                              
involvement  and  direction  from the  Administration  before  the                                                              
Legislature can move forward with confidence.                                                                                   
                                                                                                                                
9:13:19 AM                                                                                                                    
SENATOR  MCGUIRE commented  that there  is a  right to privacy  in                                                              
the Alaska  Constitution for personal  use in the privacy  in your                                                              
own home  under the Ravin  Act. She noted  that for  public health                                                              
and  public safety  reasons,  marijuana has  been  regulated as  a                                                              
controlled  substance and  now the  state is  moving into  an area                                                              
that  is a  little bit  murkier.  She asserted  that Dr.  Butler's                                                              
testimony  and  work  is  going   to  be  very  important  to  the                                                              
Legislature  regarding  the  state's  compelling  interest  for  a                                                              
right to privacy.  She pointed out that any modifications  made to                                                              
the initiative  with respect  to minors,  public consumption,  and                                                              
dosages will  be subject to legal  challenge. She said  a court of                                                              
law is  going to look  specifically at  Dr. Butler's  testimony as                                                              
the Chief  Medical  Officer and  to the data  that the  committees                                                              
collect  to  see whether  or  not  that  test  has been  met.  She                                                              
asserted  that she  is only  interested  in regulating  individual                                                              
adult rights up  to the place where a person's  individual liberty                                                              
begins  to  ebb  into  someone  else's,  a  point  that  she  will                                                              
determine from medical and health data.                                                                                         
                                                                                                                                
SENATOR COGHILL  noted that dosage is  a big deal in  Colorado and                                                              
Washington.  He  said the  Legislature  will continue  to  address                                                              
what  a dosage  means  as well  as  proper packaging  and  legible                                                              
labeling. He asked  Dr. Butler if he has given  some consideration                                                              
to  a  symbol  that  might indicate  the  dosage.  He  noted  that                                                              
alcohol uses "proof" to identify the percentage of alcohol.                                                                     
                                                                                                                                
9:16:32 AM                                                                                                                    
DR. BUTLER  answered that there are  a number of proposals  and he                                                              
has no  recommendation in  terms of  what may  be best.  He agreed                                                              
that going the  direction of a recognizable logo  is the direction                                                              
to take  fairly quickly,  even though  there may not  be a  lot of                                                              
data regarding logo recognizability and communication.                                                                          
                                                                                                                                
SENATOR COGHILL  said the  Legislature will  look to the  Division                                                              
of Public Health  for assistance. He noted that Dr.  Butler gave a                                                              
clear recommendation  on impairment  levels and remarked  that DEC                                                              
and other  regulatory agencies  might be able  to assist  with the                                                              
dosage symbol.  He reiterated that  a dosage symbol  will identify                                                              
a healthy  dosage level that is  similar to alcohol  using "proof"                                                              
to  indicate alcohol  percentage.  He said  dosage  identification                                                              
sends a clear signal, especially to people under 21.                                                                            
                                                                                                                                
9:18:06 AM                                                                                                                    
CHAIR   STOLTZE   thanked   Senator   Coghill   and   stated   his                                                              
appreciation  for  Senator  McGuire's   references  regarding  the                                                              
importance  of  the  public  record.   He  pointed  out  that  the                                                              
marijuana  industry   advocates  have  not  just   suggested,  but                                                              
promised  lawsuits. He  asserted  that prior  to  moving the  bill                                                              
through  all of  the  committees,  there ought  to  be some  clear                                                              
public record  about the  suggested warnings  and not  strictly on                                                              
the  regulatory  process.  He  opined   that  the  public  has  an                                                              
expectation  for  the  Legislature  to  get  marijuana  regulation                                                              
right irrespective of the complexities.                                                                                         
                                                                                                                                
He  asked for  confirmation that  Dr.  Butler has  not been  given                                                              
authority  by the Administration  to  speak on  all of the  policy                                                              
aspects of marijuana with recommendations.                                                                                      
                                                                                                                                
DR. BUTLER agreed that was a fair assessment.                                                                                   
                                                                                                                                
CHAIR STOLTZE  stated that  the committee  will take Dr.  Butler's                                                              
testimony   as  DHSS's  medical   testimony   with  some   of  the                                                              
highlighted concerns.  He asked  Dr. Butler to  verify that  he is                                                              
not  prepared to  make  policy recommendations  at  this time  and                                                              
somebody else probably will.                                                                                                    
                                                                                                                                
DR. BUTLER clarified  that DHSS has a mandate  from the electorate                                                              
to implement the  voter initiative. He added that there  are a lot                                                              
of  details  to  sort  out  so  that  an  appropriate  balance  is                                                              
maintained  between  access  to  legal  marijuana  and  protecting                                                              
public safety and public health.                                                                                                
                                                                                                                                
9:20:50 AM                                                                                                                    
JEFF  ROGERS,   Manager,  Division  of  Administrative   Services,                                                              
Alaska  Department of  Environmental  Conservation (DEC),  Juneau,                                                              
Alaska, introduced himself.                                                                                                     
                                                                                                                                
CHAIR STOLTZE called  attention to previous testimony  that DEC is                                                              
fully capable of  regulating marijuana's food safety  aspects, but                                                              
noted that drug content provides DEC with a conundrum.                                                                          
                                                                                                                                
MR.  ROGERS  explained that  DEC's  challenge  is whether  or  not                                                              
marijuana is  a food,  drug, or  both. He said  if marijuana  is a                                                              
drug,  DEC  would  probably  have  next  to  nothing  to  do  with                                                              
regulation. If  marijuana is  a food, it  would fall  within DEC's                                                              
existing regulatory  regime. He said given that  marijuana will be                                                              
some  part  both food  and  drug,  or  a drug  additive  to  food,                                                              
marijuana is replete with regulatory challenges for DEC.                                                                        
                                                                                                                                
CHAIR STOLTZE  asked if  DEC has the  testing facilities  and what                                                              
is  the  fiscal  impact  for  DEC  to  provide  the  oversight  to                                                              
regulate marijuana as a drug or infused product.                                                                                
                                                                                                                                
9:22:48 AM                                                                                                                    
MR.  ROGERS  deferred  to  Director Busse  Floyd  to  address  the                                                              
question.                                                                                                                       
                                                                                                                                
CHAIR  STOLTZE  stated that  his  question  will not  be  answered                                                              
today  and  noted  his  expectation  that DEC  will  huddle  as  a                                                              
department to address it later.                                                                                                 
                                                                                                                                
MR.  ROGERS asserted  that DEC's  Environmental Health  Laboratory                                                              
(EHL) can perform  or certainly has the expertise  with the proper                                                              
equipment  to perform  the  necessary testing  on  marijuana as  a                                                              
product.  He added  that  DEC has  an  agency that  can  act as  a                                                              
referee lab  for certifying private  laboratories. He  pointed out                                                              
that DEC Commissioner  Hartig explained in a recent  letter to the                                                              
committee  that EHL  has an  official  governmental capacity  that                                                              
normally looks  toward standards that  have been adopted  by other                                                              
government  agencies, the  federal  government, or  by a  commonly                                                              
accepted  scientific practice  for  certifying to  a standard.  He                                                              
pointed out  that marijuana  standards do not  exist so  DEC would                                                              
be developing a scientific standard for marijuana testing.                                                                      
                                                                                                                                
CHAIR  STOLTZE  asked  Mr.  Rogers  if  he  was  comfortable  with                                                              
outsourcing a health related issue to private labs.                                                                             
                                                                                                                                
MR.  ROGERS  replied   that  he  does  not  have   any  particular                                                              
recommendation from the department.                                                                                             
                                                                                                                                
CHAIR STOLTZE stated that testing should be addressed by DEC.                                                                   
                                                                                                                                
MR. ROGERS noted  that private testing labs in the  state do a lot                                                              
of testing on  air, water, and other materials  that are regulated                                                              
by DEC.  He stated that  DEC and EHL do  not have any  interest in                                                              
filling a  role that private industry  can fill. He  revealed that                                                              
EHL  certifies  private  laboratories   with  the  knowledge  that                                                              
results are reliable and scientifically accurate.                                                                               
                                                                                                                                
CHAIR STOLTZE  asked that  DEC define its  position as  to whether                                                              
the  Administration  wants  to outsource  the  health  and  safety                                                              
testing to  the industry  itself. He asserted  that DEC's  role is                                                              
an important policy consideration.                                                                                              
                                                                                                                                
9:25:50 AM                                                                                                                    
MR. ROGERS agreed.                                                                                                              
                                                                                                                                
SENATOR  COGHILL  called  attention  to  a letter  from  DEC  that                                                              
addressed a regulatory  scheme for marijuana. He  pointed out that                                                              
DEC  will have  to  address  policy  matters on  inspection,  time                                                              
frames,  sanitary growing,  and  if there  are  discharges from  a                                                              
growing  field. He  stated that  DEC is basically  dealing  with a                                                              
whole new manufacturing  industry for its food  service issues. He                                                              
remarked  that DEC  will  be working  closely  with the  Alcoholic                                                              
Beverage Control (ABC) Board on regulations.                                                                                    
                                                                                                                                
MR. ROGERS  replied that  DEC is  definitely participating  in the                                                              
workgroup  led by  the  ABC Board's  Cynthia  Franklin. He  stated                                                              
that Ms.  Franklin  is an expert  that is  leading the  regulatory                                                              
effort.  He opined  that as  more  becomes clear  for the  working                                                              
group,  DEC  will be  able  to  offer  more  to the  committee  on                                                              
specific legislation.                                                                                                           
                                                                                                                                
SENATOR COGHILL  said DEC will be  asked to come back  and address                                                              
how  it  expects  to  inspect  facilities  and  regulate  possible                                                              
discharge.                                                                                                                      
                                                                                                                                
CHAIR STOLTZE asked for a closing statement.                                                                                    
                                                                                                                                
MR.  ROGERS stated  that  Director Floyd  may  have some  comments                                                              
about food safety and the lab.                                                                                                  
                                                                                                                                
CHAIR  STOLTZE  remarked that  he  believes  the committee  has  a                                                              
handle on food safety.                                                                                                          
                                                                                                                                
SENATOR COGHILL  asked how the potency  levels of edibles  will be                                                              
measured. He  encouraged DEC to  work with the Division  of Public                                                              
Health to  come up with a  way to clearly indicate  potency levels                                                              
in  edibles. He  said  he is  concerned that  people  will have  a                                                              
problem reading the  fine print on packaging. He  pointed out that                                                              
alcohol  clearly and  legibly indicates  potency  levels with  the                                                              
term "proof."                                                                                                                   
                                                                                                                                
9:29:33 AM                                                                                                                    
CHAIR  STOLTZE  pointed  out  that   the  Administration  and  the                                                              
state's  public health  entities  must determine  and explain  why                                                              
potency  levels and  dosages  are appropriate.  He  said there  is                                                              
going to  be litigation and having  a clear public record  of what                                                              
is driving potency  levels and dosages are not  arbitrary numbers.                                                              
He  remarked  that  creating  an arbitrary  number  would  not  be                                                              
responsible.  He said  he  does  not want  to  guess just  because                                                              
Colorado has  10 milligrams.  He asked that  DEC and  the Division                                                              
of Public Health  provide a clear record in writing  on why public                                                              
safety  and  health  standards were  set,  especially  for  public                                                              
awareness.                                                                                                                      
                                                                                                                                
SENATOR  MCGUIRE  added that  the  Senate Judiciary  Committee  is                                                              
addressing  the term "edible"  in the  marijuana criminal  bill, a                                                              
concern that  has been  expressed by Cynthia  Franklin and  by the                                                              
public.  She  asked   that  the  working  group   provide  refined                                                              
testimony  on specific  concerns about  edibles and  what will  be                                                              
helpful to include in its definition.                                                                                           
                                                                                                                                
9:32:48 AM                                                                                                                    
CHAIR STOLTZE announced  that the committee will not  just rely on                                                              
the testimony  of state agencies.  He said the marijuana  industry                                                              
as well as  the public will  certainly weigh in. He  asserted that                                                              
public testimony  will be a robust  part of the process.  He noted                                                              
that the committee  requires a bill for public  testimony. He said                                                              
taking public testimony prior to a bill would be unfair.                                                                        
                                                                                                                                
9:34:36 AM                                                                                                                    
ELAINE BUSSE  FLOYD, Director,  Division of Environmental  Health,                                                              
Alaska  Department   of  Environmental  Conservation,   Anchorage,                                                              
Alaska,  stated  that  Mr.  Rogers  has done  a  terrific  job  in                                                              
summing up  DEC's concerns  and capabilities.  She explained  that                                                              
DEC is  working closely  with fellow state  agencies to  carve out                                                              
different  roles.  She  asserted  that  DEC  is  very  capable  in                                                              
handling food safety  and processed food inspections.  She pointed                                                              
out  that  certifying  commercial   laboratories  addresses  DEC's                                                              
ability  or necessity  to  actually be  the  tester. She  remarked                                                              
that private  labs are new commerce  and a great  opportunity. She                                                              
noted  that  Colorado and  Washington  do  not test,  but  certify                                                              
private labs to  do the potency testing. Both  states started with                                                              
potency  testing  and slowly  worked  towards  testing  microbial,                                                              
residual  solvents, and  metals.  She revealed  that Colorado  has                                                              
approximately  15 private labs  and noted  the necessity  to drive                                                              
product to  the testing  labs. She  pointed out that  transporting                                                              
product for testing will be a big challenge in Alaska.                                                                          
                                                                                                                                
CHAIR STOLTZE asked  her to clarify that the  transportation issue                                                              
was a federal obstacle or requirement.                                                                                          
                                                                                                                                
MS. BUSSE FLOYD responded that she agreed.                                                                                      
                                                                                                                                
CHAIR STOLTZE  reiterated that the  transportation issue is  not a                                                              
roadblock  that  the  Legislature  is  putting  up  through  state                                                              
regulations or statutes.                                                                                                        
                                                                                                                                
9:37:30 AM                                                                                                                    
MS. BUSSE  FLOYD summarized  that meetings  are scheduled  between                                                              
DEC and the  ABC Board, allowing  for DEC to specify its  role and                                                              
make recommendations.                                                                                                           
                                                                                                                                
CHAIR STOLTZE pointed  out that DEC's challenge  is working within                                                              
the  department  to prepare  a  preliminary fiscal  commentary  of                                                              
what DEC  believes the costs will  be. He asserted that  even with                                                              
outsourcing, DEC will have department costs.                                                                                    
                                                                                                                                
MS.  BUSSE  FLOYD replied  that  DEC  can  do what  Chair  Stoltze                                                              
requires.                                                                                                                       
                                                                                                                                
SENATOR  HUGGINS  called  attention   to  the  possibility  for  a                                                              
cleanup fund for the marijuana industry.                                                                                        
                                                                                                                                
MS.  BUSSE FLOYD  replied that  there are  a lot  of ways  funding                                                              
could be used.                                                                                                                  
                                                                                                                                
SENATOR  HUGGINS pointed  out that  an added  tax is  used in  the                                                              
petroleum industry  to address cleanup, a concept  that might have                                                              
to be considered for marijuana.                                                                                                 
                                                                                                                                
CHAIR STOLTZE noted  that Senator Huggins' suggestion  sounds like                                                              
an  impact fund.  He asked  who the  members are  for the  working                                                              
group.                                                                                                                          
                                                                                                                                
9:41:24 AM                                                                                                                    
MS. BUSSE FLOYD  detailed that the group consists  of Lacey Wilcox                                                              
from  the  Governor's  office,   Cynthia  Franklin,  Major  Dennis                                                              
Casanovas,  several people  from  the Department  of Revenue,  Dr.                                                              
Butler, and herself.                                                                                                            
                                                                                                                                
CHAIR STOLTZE  asked that  the committee  receive a working  group                                                              
members list. He  inquired if the working group  meetings are open                                                              
to the public.                                                                                                                  
                                                                                                                                
MS. BUSSE FLOYD answered that she did not know.                                                                                 
                                                                                                                                
CHAIR  STOLTZE  pointed  out  that a  level  of  transparency  and                                                              
openness  was promised.  He  opined that  the  first lawsuit  will                                                              
address the  working group's  policy development  recommendations.                                                              
He stated that  the working group  might as well get it  out right                                                              
now.                                                                                                                            
                                                                                                                                
MS.  BUSSE FLOYD  stated  that Cynthia  Franklin  or Lacey  Wilcox                                                              
would  know. She added  that the  Department  of Law also  attends                                                              
the working group meetings.                                                                                                     
                                                                                                                                
9:43:41 AM                                                                                                                    
MAJOR  DENNIS  CASANOVAS,  Deputy  Director,  Division  of  Alaska                                                              
State Troopers,  Department of  Public Safety, Anchorage,  Alaska,                                                              
introduced himself.                                                                                                             
                                                                                                                                
CHAIR STOLTZE stated  that one of the major roles  Major Casanovas                                                              
will  have  is   on  the  issue  of  impairment.   He  noted  that                                                              
Washington  State   seems  to  be   the  leader   on  establishing                                                              
impairment  policies  and  asked if  Major  Casanovas  recommended                                                              
using Washington as a prototype or a guide for Alaska.                                                                          
                                                                                                                                
MAJOR CASANOVAS  replied that  he is  not extremely familiar  with                                                              
what Washington has  other than both Washington  and Colorado have                                                              
a 5  nanograms per millimeter  (5 ng/ml) per  se limit for  THC in                                                              
blood  samples  of  subjects  that are  driving.  He  stated  that                                                              
Alaska could entertain 5 ng/ml or one that is less.                                                                             
                                                                                                                                
CHAIR STOLTZE  asserted that potency  levels will be  an important                                                              
policy issue  and one the committee  will need prior  to finality.                                                              
He stated  that the Department of  Public Safety is going  to have                                                              
to  make  a  specific  recommendation.   He  remarked  that  every                                                              
Legislature  he  has  been  a member  of  has  had  an  incredible                                                              
deference to  the opinion of the  Department of Public  Safety. He                                                              
stated that  DPS has a responsibility  to provide  the Legislature                                                              
with  its  expert  testimony  on  the  appropriate  public  policy                                                              
approach because  the State Troopers and local  constabularies are                                                              
going to implement  whatever the Legislature decides.  He asserted                                                              
that  the Legislature  is going  to  need a  lot of  help to  draw                                                              
clear  statutory  lines. He  assumed  that  litigation  is just  a                                                              
default  position  and  is  going  to occur.  He  noted  having  a                                                              
discussion  with an individual  from the  Washington State  Patrol                                                              
who indicated  that  they had a  pretty good  handle on  marijuana                                                              
and alcohol  regulation. He stated  that there are critics  in the                                                              
marijuana  industry of  Washington's  approach.  He asserted  that                                                              
the Legislature  is going  to expect  a more detailed  interaction                                                              
with the Department  of Public Safety's objective  policy thoughts                                                              
and recommendations.                                                                                                            
                                                                                                                                
9:47:17 AM                                                                                                                    
CYNTHIA FRANKLIN,  Executive Director, Alcoholic  Beverage Control                                                              
(ABC)  Board,  Department  of Commerce,  Community,  and  Economic                                                              
Development,   Anchorage,  Alaska,   noted   that  the   committee                                                              
requested  in a  previous meeting  that the  ABC Board  work on  a                                                              
document  from  the  Administration  to address  the  ABC  Board's                                                              
positions on  many issues, including  serving sizes.  She revealed                                                              
that some  recommendations do  not contain  or cite references  to                                                              
any scientific  studies or information  the committee  was seeking                                                              
from  Dr.  Butler.  The  ABC Board  is  working  with  its  fellow                                                              
agencies  to  compile  information   about  specific  topics  that                                                              
relate to the various agencies' work.                                                                                           
                                                                                                                                
9:50:02 AM                                                                                                                    
SENATOR  WIELECHOWSKI  asked  for  a review  of  the  initiative's                                                              
timelines as far as personal use, sale, and other timelines.                                                                    
                                                                                                                                
MS.  FRANKLIN  specified   that  the  act  becomes   effective  on                                                              
February  24,  90  days  after  election  certification.  Personal                                                              
marijuana use and  possession in AS 17.38.020 will  take effect on                                                              
February  24.  The  ABC  Board   expects  to  seek  one  emergency                                                              
regulation  on February  24 to  get  a definition  of "public"  in                                                              
place.  She  stated that  the  ABC  Board believes  the  emergency                                                              
regulation process  was created  for just the scenario  previously                                                              
noted where  the public and law  enforcement are in need  of a law                                                              
clarification that  is taking effect essentially in  the middle of                                                              
Session.  She  revealed  that the  ABC  Board  cannot  statutorily                                                              
enact the  emergency regulation process  until February 24  due to                                                              
the  ABC Board's  authority over  alcohol and  not marijuana.  She                                                              
specified that  the marijuana rulemaking  timeline is  February 24                                                              
to November  24, as designated  in AS 17.38  for the ABC  Board or                                                              
the Marijuana Control  Board to work on the 9  areas of rulemaking                                                              
set forth  in AS 17.38.090. She  said the next  significant period                                                              
of  time is  February 24,  2016, the  ABC Board  or the  Marijuana                                                              
Control Board  are expected to  begin taking license  applications                                                              
set forth in AS  17.38 to be issued by May 2016.  He detailed that                                                              
initiative  set  forth  the  timeline, but  noted  that  one  bill                                                              
moving through  the Legislature  purposes to change  the timelines                                                              
with regard to marijuana concentrates.                                                                                          
                                                                                                                                
9:53:54 AM                                                                                                                    
SENATOR WIELECHOWSKI  noted  a news report  about an  organization                                                              
in  Anchorage that  will start  marijuana  dispensing on  February                                                              
24. He said there  seems to be some confusion in  the public about                                                              
what can  happen on February 24.  He asked if an  organization can                                                              
start  selling marijuana  on  February 24  or  is just  possession                                                              
legal on February 24.                                                                                                           
                                                                                                                                
MS. FRANKLIN  answered that the ABC  Board has made it  very clear                                                              
that no  one can start legally  selling marijuana on  February 24.                                                              
She said  there are a couple  of individuals in the  Anchorage and                                                              
Wasilla area who  seem to be insisting on making  their own rules,                                                              
noting  that one of  the businesses  was busted  by the  Anchorage                                                              
Police  Department in  the last  couple of  weeks. She  summarized                                                              
that AS 17.38.020  becomes law on February 24.  She explained that                                                              
less than one ounce  of marijuana is allowed for  personal use and                                                              
possession  in addition  to personal  growing to  some extent.  AS                                                              
17.38.020 codifies  rules that  the Alaska  Supreme Court  has had                                                              
in place  for years.  She affirmed  that the  law absolutely  does                                                              
not  create a  situation  where  there is  any  kind of  legalized                                                              
market  before the  rules  are written  by  a  combination of  the                                                              
Legislature and whatever regulatory agency is assigned the job.                                                                 
                                                                                                                                
9:57:09 AM                                                                                                                    
SENATOR  WIELECHOWSKI asked  what  date marijuana  can be  legally                                                              
sold  in  the  state  of Alaska  so  that  people  of  Alaska  can                                                              
understand.                                                                                                                     
                                                                                                                                
MS.  FRANKLIN answered  that  the date  is  going to  be when  the                                                              
first  licenses  are issued,  possibly  May 2016.  She  emphasized                                                              
that  the first  marijuana sold  legally is  going to  have to  be                                                              
marijuana  that was  grown legally.  She noted  that other  states                                                              
have  awarded licenses  to  growers prior  to  dispensaries for  a                                                              
proper rollout.                                                                                                                 
                                                                                                                                
CHAIR STOLTZE  asked if the stated  goal is to  regulate marijuana                                                              
like alcohol and that alcohol requires a license for sales.                                                                     
                                                                                                                                
MS.  FRANKLIN answered  yes.  She specified  that  Title 4  states                                                              
that selling alcohol  without a license is a  Class A misdemeanor,                                                              
punishable by up to a year in jail and a $10,000 fine.                                                                          
                                                                                                                                
CHAIR STOLTZE remarked  that regulating marijuana  like alcohol is                                                              
what the marijuana industry asked for.                                                                                          
                                                                                                                                
9:59:21 AM                                                                                                                    
SENATOR  WIELECHOWSKI  asked  that  Ms. Franklin  talk  about  the                                                              
permits. He noted  that there is a provision in  AS 17.38.090 that                                                              
says  the application  fee will  be $5,000  unless the  regulatory                                                              
board determines  a greater fee  is necessary. He inquired  if Ms.                                                              
Franklin  believes  it  will  be necessary  to  charge  more  than                                                              
$5,000.                                                                                                                         
                                                                                                                                
MS. FRANKLIN answered  that licenses will depend on  what types of                                                              
licenses  are established.  She noted that  licensing for  smaller                                                              
communities   may    have   challenges   due   to    issues   with                                                              
transportation.  She said  there may be  situations where  license                                                              
"stacking" may  be required in  smaller communities  for different                                                              
types of  licenses. She noted that  Colorado has a system  where a                                                              
business can  apply for, receive, and  hold more than one  type of                                                              
license.  She  detailed  that businesses  in  smaller  communities                                                              
might   need   to   hold  multiple   licenses   due   to   federal                                                              
transportation prohibition  via plane or ferry. She  remarked that                                                              
the $5,000  fee is  in line  with the  type of  fees that  the ABC                                                              
Board  charges  for  alcohol  or   liquor  related  licenses.  She                                                              
revealed  that  half  of  the  license   fees  goes  back  to  the                                                              
municipalities and  noted the ABC Board has a  similar fee sharing                                                              
or  refund  system  for  alcohol  with  the  idea  that  some  law                                                              
enforcement will fall to local law enforcement.                                                                                 
                                                                                                                                
10:01:35 AM                                                                                                                   
SENATOR WIELECHOWSKI  noted  that some alcohol  licenses  can sell                                                              
for hundreds  of thousands  of dollars and  asked Ms.  Franklin if                                                              
she envisioned  a scenario where  that can happen  with marijuana.                                                              
He inquired  if there is any  way to ensure Alaskans  get licenses                                                              
or receive  priority over  large, outside  corporations that  plan                                                              
on coming in.                                                                                                                   
                                                                                                                                
MS. FRANKLIN  explained that the  secondary liquor  license market                                                              
was  created  by  the ability  for  licensees  to  transfer  their                                                              
licenses. She  explained that one of  the easiest ways  to avoid a                                                              
lot of  headaches is  to make  marijuana licenses  nontransferable                                                              
and have  the licenses  return to  the state.  She noted  that the                                                              
money  from the secondary  liquor  license market  does not  go to                                                              
the city  or the state  of Alaska. She  revealed that  a secondary                                                              
market value is due to limited licenses based on population.                                                                    
                                                                                                                                
SENATOR  WIELECHOWSKI  noted  that  he  was  concerned  about  new                                                              
individuals coming  in for licenses  and forever  being prohibited                                                              
in getting one.  He addressed "Alaskans first" and  asked if there                                                              
is a way to  see that Alaskans get the licenses  instead of large,                                                              
outside corporations.                                                                                                           
                                                                                                                                
10:04:01 AM                                                                                                                   
MS.  FRANKLIN  answered yes.  She  noted  that both  Colorado  and                                                              
Washington  have  residency  requirements  associated  with  their                                                              
licenses. She  stated that the  ABC Board believes  that residency                                                              
requirement  is a  good  way to  keep  the marijuana  business  as                                                              
Alaska-based  businesses. She  said  residency verification  could                                                              
be relatively  easy to  designate, similar  to PFD  qualifications                                                              
or requirements for  fishing and hunting licenses.  She noted that                                                              
recent  legislative   testimony  and  anecdotal   information  has                                                              
indicated  that most marijuana  currently  available in Alaska  is                                                              
grown in Alaska.                                                                                                                
                                                                                                                                
She  mentioned  that some  questions  will  come  up in  terms  of                                                              
corporations  and noted  liquor  licenses  have corporate  owners.                                                              
She  suggested   that  marijuana   licenses  designate   ownership                                                              
percentage  and transfer  rules as  to how much  of a  corporation                                                              
can be  moved about  without causing a  business to  surrender its                                                              
license.  She noted  that the  ABC Board  has a  lot of  precedent                                                              
with regard  to liquor licensing  and a way to  approach residency                                                              
and corporate transfer issues.                                                                                                  
                                                                                                                                
She opined that  because of transportation issues and  how far the                                                              
state  is from  the rest  of the  country, Alaska  is unlikely  to                                                              
become a  mecca for  big marijuana businesses.  She said  in terms                                                              
of   a   combination    of   residency   requirements    and   the                                                              
impracticality of  moving marijuana  to Alaska from  other states,                                                              
diverting  marijuana   must  absolutely   be  made   illegal.  She                                                              
asserted  that marijuana  must  be  grown and  sold  in the  state                                                              
without diversion from  another state in order to  comply with the                                                              
Cole Memorandum  regarding federal  enforcement rules  dictated by                                                              
the Controlled Substance Act.                                                                                                   
                                                                                                                                
10:07:15 AM                                                                                                                   
CHAIR STOLTZE  asked her to confirm  that there are  no interstate                                                              
commerce prohibition by nature of the initiative, only instate.                                                                 
                                                                                                                                
MS. FRANKLIN agreed.  She noted that the Cole  Memorandum outlines                                                              
the  federal   areas  of   priority  for  marijuana   enforcement,                                                              
including  any type of  diversion between  states. She  summarized                                                              
that the  federal government has  essentially said that it  is not                                                              
going  to bother a  state regulated  business  if it is  complying                                                              
with state  regulations; however,  the federal government  will be                                                              
involved with marijuana moving across state lines.                                                                              
                                                                                                                                
CHAIR STOLTZE  commented that  there was  a directive  to regulate                                                              
marijuana  like alcohol  from the  initiative. He  noted that  the                                                              
initiative's sponsors  directed the  regulatory agency  by default                                                              
as the ABC Board.  He remarked that one challenge  the Legislature                                                              
should take is  not to regulate marijuana like  alcohol. He opined                                                              
that federal  alcohol laws and  regulations have so  much embedded                                                              
interest  for the  industry and  how it  is sold.  He pointed  out                                                              
that Senator  McGuire recounted  the challenges  from the  brewpub                                                              
statutes. He  opined that  the push  for the commercialization  of                                                              
marijuana  that  "regulate  it   like  alcohol"  was  a  political                                                              
statement  campaign,   not  a  directive   to  take  all   of  the                                                              
bafflingly   confusing   and   almost    nonsensical   ways   that                                                              
protectionism  is  embedded  in  alcohol  regulation  and  statute                                                              
throughout  the country. He  stated that  he is  going to  ask the                                                              
sponsors to  come back  briefly to  give the Legislature  guidance                                                              
and  recommendations. He  summarized  that  public testimony  will                                                              
depend on a bill coming to the committee.                                                                                       
                                                                                                                                
10:12:02 AM                                                                                                                   
There  being no  further business  to come  before the  committee,                                                              
Chair  Stoltze   adjourned  the  Senate  State   Affairs  Standing                                                              
Committee hearing at 10:12 a.m.                                                                                                 

Document Name Date/Time Subjects
DEC - Marijuana Regulation Letter - 2 2 2015.pdf SSTA 2/3/2015 9:00:00 AM
Marijuana
Northern Industrial Training - Committee Follow-Up - DOT Drug Compliance Policy - 1.29.2015.pdf SSTA 2/3/2015 9:00:00 AM
Marijuana