HB 59-MARIJUANA CONCENTRATES; LICENSES  CHAIR SEATON announced that the next order of business would be HOUSE BILL NO. 59, "An Act relating to marijuana concentrates; and providing for an effective date." 4:17:51 PM REPRESENTATIVE VAZQUEZ moved to adopt the proposed committee substitute (CS) for HB 59, labeled 29-LS0257\S, Martin, 2/24/15, as the working draft. 4:18:04 PM CHAIR SEATON objected for discussion. 4:18:22 PM TANEEKA HANSEN, Staff, Representative Paul Seaton, Alaska State Legislature, explained the changes contained in the proposed CS, paraphrasing from a prepared statement, which read: Section 5:  Page 4, line 7 & 11 Registration is replaced with license. Section 6:  Page 4, lines 26 - page 5, line 2 Language requiring the regulations to include prohibitions on the combination of marijuana with alcohol and nicotine has been deleted. Language requiring the regulations to prohibit the sale of marijuana in an establishment which sells alcohol has also been removed. New language was added which states that the regulations created by the board may include prohibitions on combining marijuana concentrates with other addictive substances or requirements that new products be certified before they are available for retail. Section 12:  Page 6, lines 8 - 15 Subsections (j), (k), and (l) have been added. Subsection (j) allows the board by regulation to create the number or type of licenses necessary for implementation. Subsection (k) prohibits the issues of a license for a marijuana retail store to a person who holds a license under AS 04. Subsection (l) states that a license issued to a marijuana manufacturing facility does not authorize the facility to combine marijuana with tobacco, nicotine, or alcohol or products containing them. Section 22  Page 8, lines 23 -25 The words 'through the use of a solvent other than water' have been removed from the definition of concentrates. 4:22:12 PM CHAIR SEATON removed his objection, therefore, the proposed committee substitute (CS) for HB 59, labeled 29-LS0257\S, Martin, 2/24/15, was adopted as the working draft. 4:22:30 PM REPRESENTATIVE WOOL objected and, referring to page 6, line 12, asked about the license requirement. CHAIR SEATON relayed that an amendment would be included to correct that language. REPRESENTATIVE STUTES said that her question was similar to that of the previous member's and offered her understanding that the proposed bill did not prohibit a liquor license holder from holding a license for the sale of marijuana, although these could not necessarily be sold in the same establishment. MS. HANSEN, in response, offered her belief that subsection (k), as written, could be interpreted in that way; therefore, Amendment S.1 would be proposed for clarification. 4:24:40 PM REPRESENTATIVE WOOL removed his objection. There being no further objection, CSHB 59, Version S, was adopted as the working draft. 4:25:01 PM REPRESENTATIVE VAZQUEZ moved to adopt an amendment, labeled 29- LS0257\S.1, Martin, 2/25/15, which read: Page 1, line 2, following "establishments;": Insert "relating to alcoholic beverages and  marijuana;" Page 2, following line 3: Insert a new bill section to read: "* Sec. 2. AS 04.16 is amended by adding a new section to read: Sec. 04.16.165. Restriction on sale of marijuana  on licensed premises. A licensee may not sell, offer for sale, furnish, or deliver marijuana on licensed premises." Renumber the following bill sections accordingly. Page 6, lines 10 - 12: Delete all material and insert: "(k) A marijuana retail store license issued under this section does not authorize the sale, offering for sale, furnishing, or delivery of alcoholic beverages on licensed premises." CHAIR SEATON objected for discussion. 4:27:16 PM CHAIR SEATON labeled this Amendment S.1, and reviewed it as a means for removing the person and placing the burden on an establishment in order to address the issue of self-medication by individuals. This would prohibit individuals from purchasing recreational marijuana in an alcohol sales establishment. CHAIR SEATON removed his objection. 4:28:11 PM REPRESENTATIVE WOOL objected, asking for clarification that Section 12, subsection (k) would not authorize the sale of alcoholic beverages in a marijuana retail sale store, or vice versa. He reflected that previous testimony by Ms. Franklin, [Director of the Alcoholic Beverage Control Board] had suggested that licensing that would allow on premise consumption of marijuana could occur in the future. He asked if the proposed amendment only addressed purchases or if it also applied to on the premise consumption. CHAIR SEATON explained that the on the premise consumption would be allowed for either marijuana or alcohol, but not for both products under the proposed bill. The proposed bill did not prevent a license for usage or sale on premise, it only maintained a separation of usage in the same establishment. REPRESENTATIVE WOOL asked if this was a concurrent issue in another committee. 4:30:59 PM MS. HANSEN offered her belief that SB 62 had similar language restricting the sale of marijuana in an establishment licensed for alcohol sale, and that it may be more restrictive by limiting the ownership of licenses for sales of both. 4:31:24 PM REPRESENTATIVE WOOL removed his objection. There being no further objection, Amendment S.1 was adopted. 4:31:49 PM REPRESENTATIVE VAZQUEZ moved to adopt an amendment, labeled 29- LS0257\S.1, Martin, 2/25/15, which read: Page 2, line 5: Delete "Notwithstanding any other provision of law, the" Insert "The [NOTWITHSTANDING ANY OTHER PROVISION OF LAW, THE]" Page 2, line 6: Delete ", and permitted by," Page 2, line 24: Delete "Notwithstanding any other provision of law, the" Insert "The [NOTWITHSTANDING ANY OTHER PROVISION OF LAW, THE]" Page 2, line 25: Delete ", and permitted by," Page 3, line 11: Delete "Notwithstanding any other provision of law, the" Insert "The [NOTWITHSTANDING ANY OTHER PROVISION OF LAW, THE]" Page 3, line 12: Delete ", and permitted by," CHAIR SEATON labeled this Amendment 2 and objected for discussion. 4:33:32 PM MS. HANSEN explained Amendment 2, which was primarily conforming language to SB 30 dealing with the criminal statutes, and deleting the language for "notwithstanding any other provisions of law." She noted the removal of "and permitted by" which had allowed a temporary delay for the concentrates, stating that it was no longer necessary with the deletion of the aforementioned language for notwithstanding. 4:34:43 PM CHAIR SEATON removed his objection. There being no further objection, Amendment 2 was adopted. 4:35:13 PM CHAIR SEATON opened public testimony. 4:36:35 PM TIM HINTERBERGER, Ph.D., Chair, Campaign to Regulate Marijuana Like Alcohol in Alaska, stated opposition to proposed HB 59. He pointed out that Ballot Measure 2 had been approved by 53 percent of Alaska voters on November 3, and would effectively replace the unregulated, underground market for marijuana with a regulated system of tax paying businesses. He noted that the legislature's ability to modify this initiative was restricted for two years, and he expressed confidence in the Alcoholic Beverage Control Board for undertaking a mandate to provide regulations under the timelines required by the ballot measure. He stated that delay of any implementation would contradict the will of the voters, declaring that concentrates were included under the definition of marijuana in Ballot Measure 2, and the manufacture, sales, and possession of these products should be treated with parity to marijuana flower products. He stated that the campaign maintained the position that proposed HB 59 was unconstitutional as currently drafted. He directed attention to the handout titled "Specific Concerns With the Current Version of HB 59" [Included in members' packets]. 4:38:53 PM RACHELLE YEUNG, Legislative Analyst, Marijuana Policy Project, directed attention to the handout titled "Specific Concerns With the Current Version of HB 59" [Included in members' packets] and stated that it was substantively quite similar to an earlier memo. She emphasized that the campaign wanted to clarify its concerns for the intent and the effect of HB 59, as it appeared the intent was not aligned with the will of the voters. She offered the campaign's belief that the proposed bill was not constitutional in its intent. She stated that concentrates were included under the definition of marijuana in Ballot Measure 2, and, as it was not distinguished from the marijuana plant or flower, the mandate to the legislature was to not interfere with or alter the timeline for implementation of the marijuana regulations. She declared that neither the proposed committee substitute nor these amendments had altered the concerns and that the bill remained inconsistent with the initiative passed by the voters. She offered support for discussion to the concerns of potential dangers with production of concentrates and to address the concerns in a constitutional manner that was consistent with Ballot Measure 2. 4:42:16 PM CHAIR SEATON closed public testimony. 4:43:02 PM CHAIR SEATON asked for an opinion on the provision of the bill which separated the combining of nicotine with marijuana. He opined that this was the mixing of an addictive product with a product that may have psychological dependence and questioned whether a prohibition should be implemented. ALLISON KULAS, Program Manager, Tobacco Prevention and Control, Division of Public Health, Department of Health and Social Services, stated that the division had not taken an official position, and, although they were tracking the science, they had not come across anything discussing the combination of nicotine or tobacco or alcohol with marijuana. 4:44:26 PM REPRESENTATIVE VAZQUEZ asked about the combination of cannabis and alcohol. MS. KULAS replied that, although there was not any specific science for the combination of the two, it would most likely result in greater impairment, and that there was a concern for the addictive properties of marijuana. REPRESENTATIVE VAZQUEZ asked if Department of Health and Social Services had a position on the proposed bill. MS. KULAS replied that the department did not have a position, at this point. 4:45:13 PM REPRESENTATIVE WOOL asked if there was anyone who could provide a response regarding the combination aspect. MS. KULAS explained that the evidence was being considered and the department was following the lead of Colorado, as that state had done an extensive literature review for marijuana addiction. 4:46:07 PM CHAIR SEATON reported that the proposed bill was designed to address a developing industry. He shared that the ABC Board anticipated successful completion of the regulations. They had requested additional staff, although given the current financial situation, authorization was not ensured. The purpose of the proposed bill was to ensure full regulations on cultivation, processing, and retail sales by the industry. If necessary, a delay could be placed on the manufacture and sale of new products. He pointed out that the delay would be based on the implementation of recommendations by the board and could not exceed the projected timeframe. 4:48:18 PM REPRESENTATIVE WOOL disclosed that he was currently a license holder under AS 04. He mused that these restrictions, as they were not in the last version of the bill, prompted further questioning. He shared that the ABC Board representatives had stated they were prepared to write regulations and restrictions on marijuana use based on their experiences with the control and regulation for the use of alcohol. He noted that members of the licensing world also declared a readiness for these issues regarding systems of control and regulations. 4:49:56 PM REPRESENTATIVE WOOL asked about the ABC Board's position regarding the restriction of license holders under AS 04 with relationship to the potential sale of marijuana. CYNTHIA FRANKLIN, Director, Alcoholic Beverage Control (ABC) Board, in response, explained that most of the restrictions related to alcohol were centered on a premises based approach with control of the area of sales, manufacture, or delivery, and there were not any restrictions on other businesses by alcohol licensees. She stated that the application to qualify for liquor licenses was "a fairly straightforward process." She offered her hope that the regulations for the application and licensing process for obtaining a marijuana based license would be left to the ABC Board or a newly created marijuana control board. She opined that it was difficult for the legislature "to find your spot in this voter initiative" and she expressed appreciation for the effort to allow for additional time, as well as concern for the constitutionality requirements. She stated that the specifications for who may or may not get marijuana business licenses begs the need for the regulatory agency to develop the regulations with an extended public input period. She acknowledged the earlier statements for consideration that changes may occur as the industry progresses and those details would need to be addressed during the regulatory process, as statutes were much harder to change. She opined that a prohibition for certain people to obtain marijuana licenses "might be risky business." 4:53:19 PM CHAIR SEATON clarified that the proposed bill had been amended to address establishments and not persons, and that it prohibited the sale of both alcohol and marijuana in an establishment. MS. FRANKLIN acknowledged the amendment, although she had understood the question to be for the simultaneous holding of licenses. 4:54:28 PM The committee took a brief at-ease. 4:55:14 PM CHAIR SEATON stated that HB 59 would be held over.