Legislature(2021 - 2022)ADAMS 519
04/20/2022 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB289 | |
| SB222 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 289 | TELECONFERENCED | |
| + | HB 350 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | HB 323 | TELECONFERENCED | |
| + | SB 222 | TELECONFERENCED | |
HOUSE BILL NO. 289
"An Act establishing the Alaska marijuana industry
task force; and providing for an effective date."
1:35:47 PM
Co-Chair Merrick shared that it was the second hearing on
the bill, which was first heard on March 18, 2022.
1:36:12 PM
Co-Chair Merrick OPENED public testimony.
DOLLY PHELPS, SELF, KENAI (via teleconference), spoke in
strong support of the bill. She believed that the action
was necessary for the growth and stability of the industry.
She indicated that the tax restructuring could not be done
by the Marijuana Control Board and the bill provided an
avenue for that to happen. She urged the committee to
support the legislation.
Representative Wool asked if Ms. Phelps was a member of the
Alaska Marijuana Industry Association (AMIA). Ms. Phelps
replied in the negative. She advocated for all licensees to
be given the opportunity to serve on the task force. She
believed that opening the task force up to all licensees
broadened its perspective and increased the pool of
qualified candidates. However, she did not want the bill to
fail because of the provision.
1:38:12 PM
SAMUEL HACHEY, TANANA HERB COMPANY, FAIRBANKS (via
teleconference), supported the bill. He informed the
committee that his business had 2 cultivation facilities, a
manufacturing facility, and a retail outlet. He supported
all the provisions of the bill and favored the structure of
the board.
1:39:10 PM
TRAVOR HAYNES, GOOD CANNABIS, FAIRBANKS (via
teleconference), testified in support of the legislation.
He shared that his business held retail, cultivation, and
manufacturing licenses. He indicated that he was the Vice-
President of AMIA. He spoke to the diversity of the
marijuana industry in license types and the backgrounds of
people involved in the industry. He emphasized that all the
industry participants agreed that taxes needed to be
addressed. The industry needed data and open dialogue to
help find a solution. He thanked the sponsor of the bill.
1:40:44 PM
AT EASE
1:41:09 PM
RECONVENED
JOAN WILSON, INCOMING DIRECTOR, ALCOHOL AND MARIJUANA
CONTROL OFFICE DIRECTOR, ANCHORAGE (via teleconference),
informed the committee that she was available for
questions.
1:41:53 PM
RYAN TUNSETH, SELF, KENAI (via teleconference), spoke in
support of the legislation. He shared that he owned a
retail business in Kenai called East Rip and served as
the Treasurer of AMIA. He believed HB 289 was a great way
to achieve collaborative discovery of data to assist
lawmakers on both sides of the aisle. He maintained that
taxation was the significant issue for the industry and
believed that changing the tax was critical to the
survival of many small businesses. He thought the bill was
timely.
1:43:18 PM
Co-Chair Merrick CLOSED public testimony.
Co-Chair Merrick recognized that the committee had been
joined by the bill sponsor, Representative Grier Hopkins.
Co-Chair Merrick noted that the committee briefly addressed
the fiscal note in the prior hearing and requested the
Department of Commerce, Community and Economic Development
(DCCED) review the fiscal note.
CARRIE CRAIG, ACTING DIRECTOR OF ALCOHOL AND MARIJUANA
CONTROL OFFICE, ANCHORAGE (via teleconference), offered to
answer any questions on the fiscal note.
REPRESENTATIVE GRIER HOPKINS, SPONSOR, spoke to the
changes to the fiscal note made in the prior committee
[House Labor and Commerce Committee (HLC)]. The committee
ensured that the task force meetings would be held
virtually, which cut the cost substantially.
1:44:51 PM
AT EASE
1:45:37 PM
RECONVENED
Co-Chair Merrick relayed that she had received two
amendments for HB 289.
Representative Rasmussen withdrew Amendment 1, 32-
LS1317\I.3 (Radford, 4/18/22) (copy on file):
1:46:12 PM
AT EASE
1:47:33 PM
RECONVENED
Representative Wool MOVED to ADOPT Amendment 2, 32-
LS1317\I.2 (Radford, 4/18/22) (copy on file):
Page 2, lines 20 - 23:
Delete all material and insert:
"(6) three members appointed by the board of directors
of the Alaska Marijuana Industry Association who meet
the following requirements:
(A) one member whose only registration under AS 17.38
is for the operation of a marijuana cultivation
facility;
(B) one member whose only registration under AS 17.38
is for the operation of a marijuana retail
establishment;
(C) one member who holds one or more registrations
under AS 17.38 to operate marijuana establishments;
(D) one member appointed under (A) - (C) of this
section shall represent a business that is not a
member of the Alaska Marijuana Industry Association;
and
(E) each member shall reside in a different judicial
district."
Co-Chair Merrick OBJECTED for discussion.
Representative Wool explained that the amendment further
described the three industry taskforce members. He
explained that the list included a cultivator, retailer,
and vertically integrated member, which meant owning more
than one license. The amendment provided that one of the
two or more license types held by the vertically integrated
member had to be a manufacturer license.
Representative Wool MOVED to ADOPT Conceptual Amendment 1
to Amendment 2.
Page 1, Line 10 of the Amendment
After "establishments"
Insert "of which one must be for a marijuana
manufacturing establishment"
Co-Chair Merrick OBJECTED for discussion.
Representative Wool explained that the conceptual amendment
further delineated the one industry task force member must
be in the marijuana manufacturing establishment. The
Subsections (A) and (B) in Amendment 2 ensured that a
cultivator and retailor were members of the task force and
subsection (C) mandated that a member had to hold more than
one license. Therefore, the conceptual amendment added the
manufacturing license to (C) pertaining to the vertically
integrated member. He wanted to ensure that all three
aspects of the industry were represented on the task force
as well as a vertically integrated member, which was common
in the industry and likely shared a different perspective
than single license holders. He had heard from industry
that taxation was a significant issue due to the flat tax
that was imposed by the ballot initiative and was
problematic due to the decreased price of marijuana.
Representative Rasmussen supported the amendment.
Co-Chair Foster asked Representative Wool to read his
conceptual amendment language. Representative Wool complied
with the request.
1:51:49 PM
Representative LeBon cited subsection (D) of Amendment 2
and read the following:
(D) one member appointed under (A) - (C) of this
section shall represent a business that is not a
member of the Alaska Marijuana Industry Association;
Representative LeBon wondered whether the provision was
part of the original bill. Representative Wool responded
that it was currently in the bill and rewritten in
Amendment 2 and reinserted. Amendment 2 deleted lines 20
through 23 where the language was originally contained in
the bill. He agreed with the intent of the language.
Co-Chair Merrick clarified that the conceptual amendment
only added the manufacturer license provision.
Representative LeBon asked what the percentage breakdown of
non-AMIA members in the industry was.
JOE HARDENBROOK, STAFF, REPRESENTATIVE GRIER HOPKINS,
answered that about one quarter of license holders in the
marijuana industry were AMIA members. He compared the
number to the percentage of Cabaret Hotel and Restaurant
Retail Association (CHARR) members at 35 percent and
deduced that it was roughly equivalent to AMIA.
1:53:42 PM
LACY WILCOX, PRESIDENT, ALASKA MARIJUANA INDUSTRY
ASSOCIATION, responded that AMIA represented roughly 35
percent of license holders. She indicated that some
licensees had multiple licenses and AMIA counted each
multiple license holders as one member. She deemed that the
calculation skewed the membership number. She voiced that
if they counted its membership by each of the 420 licenses
in the industry it would be a much higher percentage.
Co-Chair Merrick noted Representative Edgmon had joined the
meeting.
Co-Chair Foster asked for the sponsor's opinion on the
amendments.
Representative Hopkins supported both amendments. He
believed that the diversity it brought to the membership
was important.
Co-Chair Merrick withdrew her OBJECTION to Conceptual
Amendment 1.
There being NO further OBJECTION, Conceptual Amendment 1
was ADOPTED.
1:55:30 PM
Representative Rasmussen MOVED to ADOPT Conceptual
Amendment 2 to Amendment 2. She explained that Conceptual
Amendment 2 would only delete lines 11 through 13 on page
2.
Co-Chair Merrick OBJECTED for discussion.
Representative Rasmussen explained that the conceptual
amendment allowed non-AMIA members to participate on the
board.
Co-Chair Merrick asked Representative Rasmussen to repeat
what the amendment would do.
Representative Rasmussen complied and restated the
conceptual amendment deleted lines 11 through 13.
Representative Wool understood the conceptual amendment was
meant to ensure that a non-AMIA member could be appointed.
He agreed with Representative Rasmussen, and it was the
reason he retained the language on lines 11 through 13 that
mandated a non-AMIA member a seat on the task force. He
emphasized the language on line 12 represent a business
that was not a member of AMIA. He pointed to Page 2, line
21 of the bill and read, businesses appointed by the board
of directors of the Alaska Marijuana Industry Association.
He doubted that AMIA would appoint three members, and none
would be a member of AMIA. He was concerned that by
removing the section it meant AMIA could appoint three AMIA
members. He wanted to ensure that a non-member of AMIA was
represented on the task force. He was in favor of allowing
more than one non-member, but he did not want to completely
eliminate the language to ensure non-AMIA membership on the
task force. He commented that since AMIA had the
appointment authority he was leery of eliminating any
reference to non-members. He also favored language stating
at least one member was a non-member of AMIA.
1:58:31 PM
Co-Chair Merrick asked to hear from Ms. Wilcox.
Ms. Wilcox responded that in the House Labor and Commerce
Committee there had been a testifier with the same concern
that the task force was not open to all. She concurred that
AMIA was the appointing committee. She shared that AMIAs
groundwork for the bill included an invitation to all 420
license holders to submit interest in serving on the
taskforce. She did not recall a submission by a non-member
but if non-members were interested, she would consider a
person's willingness to collaborate and if they shared the
collective concerns of the industry. She did not believe
that AMIA membership was vital for the process. She
understood the testifiers concern was that if no AMIA
members wanted a seat on the task force it should be open
to non-AMIA industry participants.
2:00:30 PM
Representative Wool understood someone had called in
supporting the bill and non-AMIA membership. He emphasized
that he did not question the integrity of AMIA or Ms.
Wilcox, but the industry would survive Ms. Wilcoxs tenure.
He shared from his experience of industry trade groups the
scenario where the trade group represented a percentage of
the group, and the industry group favored a decision that
many from the trade did not support. He wondered what would
happen in subsequent years, but he realized the task force
had a limited lifespan. He noted that the provision in the
bill addressed the concern and deemed that out of all the
non-members, one licensee could be found to serve on the
task force. He retained his concern that by removing the
reference to non-members all the seats could be appointed
to AMIA members. Ms. Wilcox replied that she was nervous
that she may not receive any applicants from non-AMIA
members and preferred language that included the word
may. She emphasized that thus far people involved in
marijuana regulatory meetings tended to be AMIA members.
She reiterated her concern over what would happen if no
non-member applied and that she did not have anyone
interested that was not a member. Representative Wool
countered that 3 out of 420 license holders was achievable.
He did not want her reason to be a limiting factor and
reminded Ms. Wilcox that the language he proposed was for
at least one member. He thought that finding one person
was possible.
Ms. Wilcox replied that she would comply with the outcome.
She opined that the provision had been crafted for the
one testifiers concern.
2:04:00 PM
Representative Carpenter asked why Section D of the bill
was included to require AMIA to bring forward a non-member.
He deduced that it was for diversity of thought and
representation. He thought it seemed like a conflict of
interest that a board would be recommending a person that
was a non-member. He thought the non-AMIA member should not
be included in the section. He suggested that if diversity
of thought was the goal, a non-AMIA member should be able
to apply for the board without AMIA having a say in the
matter.
Mr. Hardenbrook answered that Representative Carpenter hit
the nail on the head. He elucidated that the sponsor was
attempting to ensure diversity of thought and good
representation. He noted the provision providing for the
three members each resided in a different judicial
district. The purpose of the task force was to examine
industry data so it could propose reasonable
recommendations to establish the industry on a stable
economic footing going forward. He stressed that the
taskforce was merely advisory, and any recommendation would
require further action from entities of state government;
executive or legislative, in order to implement any
recommendations.
2:07:07 PM
Representative Carpenter suggested that the first duty of
the task force would have it choose the one non-member and
therefore, eliminate the conflict of interest in having
AMIA appoint a non-member. Mr. Hardenbrook thought that he
made a fine point. He explained that the reason for the
proposed structure was the very short timeframe given the
task force to produce a report back to the legislature over
the interim. The taskforce would cease to exist the next
time the legislature met, and the sponsor thought it best
to streamline the process.
2:08:34 PM
Representative Rasmussen thought the point was to allow for
flexibility to get the most qualified applicants to come
forward. She acknowledged the desire for a diverse view.
She shared that she was a member of an industry group and
understood the issue. She did not want to unnecessarily
micromanage the industry. She wanted to defer to the
industry on what qualifications a person had to offer
regardless of their affiliation to an organization.
Representative Wool referenced Mr. Hardenbrook' s point
that the task force would merely make recommendations. He
pointed out that other task forces made recommendations and
even if no statutory action was taken the recommendations
were held up as the voice of the entire industry. He
emphasized the importance for a non-AMIA member for
diversity of representation and believed that any license
holder was qualified for membership.
2:11:43 PM
Co-Chair Merrick asked committee members to tread lightly
on other members' motives.
Ms. Wilcox shared that she invited all license holders to
engage in the process and wanted to hear from everyone. She
understood the history of other task forces and advisory
boards. She was uncertain which type of license holder
should not be chosen by AMIA. She opined that the best and
the brightest in the industry were all licensees, but not
everyone had the time to participate. She offered that
assessing current interest, she had a small pool of
interested candidates.
Representative Wool asked if the language were to be
removed could Ms. Wilcox do her utmost to see that one
person was an AMIA member. Ms. Wilcox agreed and believed
it would be detrimental to not do that. She wanted to grow
trust in the industry and AMIA membership.
Co-Chair Merrick withdrew her objection to conceptual
Amendment 2.
Representative Wool objected.
A roll call vote was taken on the motion.
IN FAVOR: Rasmussen, Carpenter, Merrick
OPPOSED: Thompson, Wool, Edgmon, Josephson, LeBon, Ortiz,
Foster
The MOTION to adopt conceptual Amendment 2 FAILED (3/7).
2:15:09 PM
Co-Chair Merrick withdrew her objection to Amendment 2 as
amended.
There being NO further OBJECTION, Amendment 2 was ADOPTED
as amended.
Representative Edgmon supported the bill. He believed that
the timeline was extremely short to deal with a taxation
issue. He asked if it was reasonable to extend the
timeline. He believed that it was difficult to get a
taxation bill passed in the legislature and was likely a
two session endeavor.
Representative Hopkins agreed that it was an expedited
timeframe. He summarized that everyone on the taskforce had
time and expertise and it was only advisory in capacity. He
pointed out that the current timeframe was important
because many license holders were financially struggling
with the current system. He believed that moving forward
with the current termination date was critical.
2:19:12 PM
Representative Carpenter asked what would happen if the
legislature had questions of the taskforce. He noted that
the taskforce would be disbanded by the next legislative
session.
Mr. Hardenbrook referred to Page 3, line 5 of the bill and
read, the taskforce shall ensure members were available
for legislative hearings. Representative Carpenter
restated his concern and wondered how that would work if
the taskforce was disbanded. Mr. Hardenbrook hoped that the
members would remain engaged and advocate for their
findings in the next legislature and administration.
Representative Hopkins thanked the committee for hearing
the bill.
Co-Chair Foster MOVED to REPORT CSHB 289(FIN) out of
committee with individual recommendations and the
accompanying fiscal note.
CSHB 289(FIN) was REPORTED out of committee with eight "do
pass" recommendations and two "no recommendation"
recommendations and with one new fiscal impact note from
the Department of Commerce, Community and Economic
Development.
2:21:31 PM
AT EASE
2:24:05 PM
RECONVENED
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 289 Amendment 1-2 041922.pdf |
HFIN 4/20/2022 1:30:00 PM |
HB 289 |
| HB 350 Sponsor Statement.pdf |
HFIN 4/20/2022 1:30:00 PM |
HB 350 |
| HB 350 Sectional.pdf |
HFIN 4/20/2022 1:30:00 PM |
HB 350 |
| HB 350 Supporting Docs.pdf |
HFIN 4/20/2022 1:30:00 PM |
HB 350 |
| SB 222 Audit Report 02.17.2022.pdf |
HFIN 4/20/2022 1:30:00 PM |
SB 222 |
| SB 222 Letters of Support received as of 3.4.22.pdf |
HFIN 4/20/2022 1:30:00 PM |
SB 222 |
| SB 222 Sectional Analysis.pdf |
HFIN 4/20/2022 1:30:00 PM |
SB 222 |
| Sponsor Statement for Senate Bill 222.pdf |
HFIN 4/20/2022 1:30:00 PM |
SB 222 |
| HB 289 Conceptual Amendment 1 to Amendment 2 Wool 042022.pdf |
HFIN 4/20/2022 1:30:00 PM |
HB 289 |