Legislature(2021 - 2022)ADAMS 519
03/18/2022 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB149 | |
| HB289 |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 281 | TELECONFERENCED | |
| += | HB 282 | TELECONFERENCED | |
| += | HB 149 | TELECONFERENCED | |
| + | HB 289 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 9 | TELECONFERENCED | |
HOUSE BILL NO. 289
"An Act establishing the Alaska marijuana industry
task force; and providing for an effective date."
3:30:28 PM
REPRESENTATIVE GRIER HOPKINS, SPONSOR, provided an
of the bill and read from a prepared
Good afternoon members of the committee and Co-Chairs
Foster and Merrick, for the record, Representative
Grier Hopkins representing Northwest Fairbanks, Ester,
Goldstream, Steese, Farmers Loop, Birch Hill and
Downtown Fox. With me today is my staffer, Joe
Hardenbrook.
Thank you for hearing House Bill 289 today. This bill
would establish the Alaska Marijuana Industry Task
Force to take a holistic look at our state's growing
marijuana industry, analyze its strengths and
weaknesses, and propose a package of reforms. These
proposed reforms would be submitted to the Marijuana
Control Board, the Governor and the Legislature for
consideration and possible action in part or in
whole.
Why is this legislation necessary?
In 2014, Alaska voters legalized recreational
marijuana. Since that time, thousands of Alaskans
have sought to participate in this new industry as
business owners, workers, investors, consumers and
more. This industry is a uniquely Alaskan one state
law requires that license holders be Alaska residents,
resulting in an Alaska marijuana market owned and
operated by Alaskans selling products grown, tested,
processed and purchased here in the Last Frontier.
The industry which has emerged from the passage of the
voter initiative in 2014 is supported by Alaskans
across the state but it is facing some challenges.
Many business owners are struggling to comply with the
letter and spirit of the law, and several factors
including taxation, licensing and enforcement continue
to challenge the industry. Recent reporting by the
Anchorage Daily News articles which are included in
the bill packet - shows ongoing frustration amongst
the Alaskan entrepreneurs who've invested time,
resources, and energy in this new market.
While I'm a firm believer in free markets and the
inevitable sorting of winners and losers in a
capitalist system, Alaska's marijuana industry is
OURS, and we elected officials can and should set the
rules for the thousands of Alaskans who've seen fit to
invest their hard-earned dollars, time, and energy
into this new market. We can and should ensure that
the rules WE set to govern OUR industry are fair and
reasonable and offer those Alaskans who pursue a
career or business investment in Alaska can achieve
success while playing by the rules. We can and should
ensure that local governments continue to play a role
in authorizing, monitoring, and generating revenue
from this new industry.
Make no mistake, there are solutions to these
problems - but they involve give and take amongst
members of the industry, state regulators and local
governments. In order to pursue a strategy that
strengthens our Alaska businesses, protects local
control and places our industry on a firmer economic
footing, HB 289 proposes that this task force review
the issue, develop ideas for industry reform, utilize
state resources to model how those changes would
affect businesses, local governments and state
revenue. Additionally, I think it is fitting that the
cost of these efforts will be borne by license
receipts from Alaska's marijuana industry. That's
correct the cost of this task force will be paid for
by the thousands of Alaskans who've invested in
Alaska's marijuana industry.
At this point, I'll turn to Mr. Hardenbrook to walk
the committee through the bill.
JOE HARDENBROOK, STAFF, REPRESENTATIVE GRIER HOPKINS, read
from a prepared statement. He explained how the task force
would operate.
The selection process for the thirteen members of the
task force has been crafted to ensure representation,
expertise, and geographic diversity.
The task force will be chaired by the chair of the
Marijuana Control Board. The two state agencies most
closely involved in Alaska's marijuana industry
Commerce and Revenue - will be represented by their
commissioners or their designees. Because so many of
these questions are economic in nature, we've reserved
a seat for an economist from the University of Alaska.
Because the voter initiative carved out specific roles
and rights for local governments, we've included three
municipal government representatives, with a
requirement that those officials come from different
judicial districts and represent the breadth of
Alaska's local governments cities and boroughs.
Because those most affected by a decision should have
a role in making that decision, we've reserved three
seats a quarter of the task force's membership for
representatives of the Alaska marijuana industry.
Like the local government seats, these task force
members must hail from different judicial districts
and represent the breadth of industry cultivators,
processors, and retailers. The governor will appoint a
member representing public health interests. Finally,
there are two legislative seats, in the hopes that the
input and advice of legislators can help craft a final
product with a greater chance of enactment.
As Rep. Hopkins mentioned, this task force is not a
permanent creation. Rather, it must meet four times
over the interim, conduct their work, craft their
proposals, model their data, and submit their findings
to the executive and legislative branches for
consideration and potential action. This legislation
does not create a new, permanent position but rather
relies on a temporary position to assist the task
force in crafting its final product. The findings of
this task force are, first and foremost non-binding,
and are not limited to suggestions for legislative
fixes suggestions may include statutory, regulatory,
and administrative changes.
A top-down, "one-size-fits-all" solution to this
complex issue will most likely result in additional
challenges to the industry and may cause unforeseen
circumstances which compound problems instead of
rectifying them. As we've repeatedly heard from
representatives of all the different businesses and
resource development activities in Alaska, fiscal
certainty and good data are essential components of
any successful business enterprise.
And to reiterate what Rep. Hopkins mentioned - the
cost of these efforts will be borne by program
receipts and licensing fees from Alaska's marijuana
industry. That's correct the cost of this task
force will be paid for by the Alaskans who've invested
in Alaska's marijuana industry.
Chair Merrick, two amendments were adopted by the
Labor & Commerce Committee. One change moves the
proposed task force from in-person meetings to remote,
video conferenced meetings, resulting in a substantial
savings in travel and lodging costs. Another amendment
added a public health seat to the task force.
Chair Merrick, I'd also like to note for the committee
that we have Glen Klinkhart, the Director of the
Alcohol and Marijuana Control Office online for
questions about the fiscal note. Thank you, and I'll
conclude my presentation.
3:35:30 PM
Co-Chair Merrick asked the department to review the fiscal
note.
GLEN KLINKHART, DIRECTOR, ALCOHOL AND MARIJUANA CONTROL
OFFICE, DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC
DEVELOPMENT (via teleconference), spoke to the fiscal note
[FN 2 (CED)]. He indicated that the board was going to be a
part of the task force and the Alcohol and Marijuana
Control Office (AMCO) would act as the conduit to support
its work. The fiscal note envisioned $52 thousand for a
long-term non-permanent Project Assistant (Range 16) to
assist with meetings, research, compiling information, and
report finalization for eight months (June through
January). In addition, travel was reduced to the bare
minimum due to the positive use of Zoom meetings. He noted
that AMCO was supported by program receipts and in some
years, they returned some revenue to the general fund. He
believed that the fiscal note was sufficient to support the
bill. He furthered that the idea of the taskforce was that
the Marijuana Control Board was a licensing and enforcing
board. The larger issues were often not dealt with because
they were trying to deal with day to day issue and ensuring
public safety. The larger issues with the industry were not
within its purview, but the board indicated it desired to
address the issue.
3:38:21 PM
Representative Wool applauded the efforts of the bill's
sponsor and staff. He had several constituents approach him
about the marijuana tax burden due to the flat tax
structure of $800 per pound. He recalled that when the tax
structure was adopted the wholesale price had been about
$5,000 per pound and now it was approximately $2,000 per
pound. He exemplified the Title 4 re-write and noted that
it was difficult to find agreement among a large group;
the task force had 13 members. He expressed concern that at
first glance it seemed excessive and thought that the issue
was confined to taxes. He worried that the task force was
too large.
Mr. Hardenbrook answered that the task force would
primarily address the economic issues of the industry. He
noted that the wholesale tax "incentivized and
disincentivized certain behaviors within the industry." He
elaborated that the task force wanted to take a 'holistic
look" at the industry and try to put it on firm economic
footings. He characterized the industry as "uniquely
Alaskan." He respected the concern about the number of
"cooks in the kitchen." He quoted the book of proverbs,
"without advice plans go wrong but with many advisors they
can succeed." He expressed hope that a group of well-
informed people could find solutions to the problem.
Representative Hopkins interjected that the task force
would not only discuss economic issues, but also examine
licensing, regulation, enforcement, as well as ways the
industry could maintain its Alaskan owned and operated
structure.
3:42:28 PM
Representative Wool remarked that if the federal law was
changed the industry could be nationalized. He deduced that
the task force may not have so much control over
nationalization.
Mr. Hardenbrook replied that the task force was
specifically charged with finding ways to maintain Alaska's
marijuana industry. Currently, a marijuana license holder
had to receive an Alaska Permanent Fund Dividend (PFD). He
agreed that national legalization would pose a challenge
for Alaska. The task force would address how the state
could protect the industry should the national paradigm
shift. Representative Wool thought that the market should
also have a voice.
HB 289 was HEARD and HELD in committee for further
consideration.
Co-Chair Merrick reviewed the schedule for the following
meeting.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 289 - Research - ADN Article on Alaska Marijuana Industry - 11.07.2021.pdf |
HFIN 3/18/2022 1:30:00 PM |
HB 289 |
| HB 289 - Research - ADN Article on Alaska Marijuana Industry - 11.30.2021.pdf |
HFIN 3/18/2022 1:30:00 PM |
HB 289 |
| HB 289 - Sectional Analysis version I 2.17.2022.pdf |
HFIN 3/18/2022 1:30:00 PM |
HB 289 |
| HB 289 - Sponsor Statement version I 2.17.2022.pdf |
HFIN 3/18/2022 1:30:00 PM |
HB 289 |
| HB 289 Letter of Support AMIA 1.31.2022.pdf |
HFIN 3/18/2022 1:30:00 PM |
HB 289 |
| HB 149 Amendments 1 - 2 031622.pdf |
HFIN 3/18/2022 1:30:00 PM |
HB 149 |
| HB 149 Public Testimony Rec'd by 031722_.pdf |
HFIN 3/18/2022 1:30:00 PM |
HB 149 |
| HB 149 Supporting Document Letters of Support as of 3.18.2022.pdf |
HFIN 3/18/2022 1:30:00 PM |
HB 149 |
| HB 149 Supporting Document ADN Alaska Must Address Child Care Crisis 3.18.2022.pdf |
HFIN 3/18/2022 1:30:00 PM |
HB 149 |