Legislature(2021 - 2022)BELTZ 105 (TSBldg)
05/10/2022 09:00 AM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB133 | |
| HB289 | |
| HB227 | |
| HB145 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 133 | TELECONFERENCED | |
| + | SB 181 | TELECONFERENCED | |
| *+ | HB 289 | TELECONFERENCED | |
| *+ | HB 145 | TELECONFERENCED | |
| += | HB 227 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
HB 289-AK MARIJUANA INDUSTRY TASK FORCE
5:38:21 PM
CHAIR COSTELLO reconvened the meeting and announced the
consideration of CS FOR HOUSE BILL NO. 289(FIN) "An Act
establishing the Alaska marijuana industry task force; and
providing for an effective date."
She noted that this was the first hearing and the intention was
to hear the introduction, take public testimony, and look to the
will of the committee.
5:38:50 PM
REPRESENTATIVE GRIER HOPKINS, Alaska State Legislature, Juneau,
Alaska, sponsor of HB 289, stated that this legislation
establishes the Alaska Marijuana Industry Task Force for the
purpose of taking an overall look at the state's regulations,
permitting, certificates, tax laws, and statutes relating to the
marijuana industry. The task force will meet for approximately
six months and bring its nonbinding recommendations to the
legislature next January for consideration. He highlighted that
the House Labor and Commerce Committee amended the bill to allow
the task force will meet virtually. The Marijuana Control Board
agreed with the amendment, which reduced the fiscal note about
$100,000. He paraphrased the sponsor statement as he described
the need for the legislation: It read as follows:
[Original punctuation provided.]
Since the 2014 legalization of recreational marijuana
by citizen initiative, the state of Alaska has sought
to create a vibrant, sustainable and responsible
marijuana industry. Under the oversight of the
Marijuana Control Board, marijuana businesses have
sprung up across Alaska putting Alaskans to work,
creating new revenue streams for local governments,
and moving an unregulated black market out of the dark
and into the public light.
While many businesses initially thrived under the
terms of Alaska's marijuana market, the ongoing
inequities and inflexible fiscal terms of the voter
initiative has left many marijuana businesses
struggling to comply with the letter and spirit of the
law. Limited scope of enforcement powers have resulted
in scattershot oversight, resulting in too many small
businesses running afoul of regulations.
With the wide, varied scope and size of the businesses
competing in Alaska's marijuana market, it is
difficult to find a single solution to stabilize our
business model, maintain revenue streams for state and
local governments and preserve our unique Alaskan-
controlled marijuana industry.
HB 289 would convene a task force of knowledgeable
Alaskans to analyze this problem, propose solutions,
create models to see how these proposed changes would
impact taxpayers, businesses and governmental
entities, and offer their findings to the next Alaska
legislature for action. Chaired by the head of the
Marijuana Control Board, the task force will be
composed of the heads of relevant state agencies,
local government leaders, representatives of the
marijuana industry, a public health representative and
an economist from the University of Alaska. Members of
the Alaska House and Senate will serve as ex-officio
task force members.
This task force will meet over the 2022 interim, and
make their recommendations for action to the Thirty-
Third Alaska Legislature. I urge your support for HB
289.
5:41:15 PM
CHAIR COSTELLO opened public testimony on HB 289.
5:41:35 PM}
LACY WILCOX, President, Alaska Marijuana Industry Association
(AMIA), Juneau, Alaska, stated enthusiastic support for HB 289.
She said the excise tax on marijuana at the point of cultivation
is destabilizing the industry. For example, the $800 per pound
excise tax in Alaska is the wholesale price of a pound of
marijuana in Oregon. She said AMIA has been analyzing potential
changes, but without access to tax experts and state data, it's
been like shooting darts at the wall. She expressed hope that
passage of HB 289 would result in robust, smart, and data-driven
conversations between the industry, regulators, tax experts,
municipal stakeholders, and the legislature.
She expressed appreciation that AMIA was named as a qualified
industry representative. She acknowledged that AMIA doesn't
represent the views of the entire industry, but pointed out that
it is the only statewide trade group in the state, so the
appointment was appropriate. AMIA's goal is to help identify a
sustainable, enforceable, and fair tax structure that allows for
growth and better compliance. She characterized the future of
the industry in Alaska as bright.
5:43:40 PM
SENATOR GRAY-JACKSON asked what marijuana costs pound.
MS. WILCOX replied it's about $3,400 and can be as low as $2,800
for lower quality, $800 of which goes to the excise taxe.
5:44:27 PM
SAM HACHEY, Owner, Tanana Herb Company (THC), Fairbanks, Alaska,
stated that as both a manufacturing and a retail operation, he
appreciates the opportunity to provide information and hopefully
find a solution to tax issues plaguing the industry. He looks
forward to the federal legalization of marijuana and wants
Alaska's tax structure to align with other states.
5:45:14 PM
SENATOR MICCICHE joined the meeting.
5:45:26 PM
TRAVOR HAYNES, representative, Good Cannabis, Fairbanks, Alaska,
stated that Good Cannabis holds a retail, cultivation, and
manufacturing license. He said he'd testified on the bill
several times before, but the perspective he was offering today
was about the economic viability of communities and the state.
He relayed that he spoke to someone recently who had a
pessimistic outlook about the Fairbanks economy. He recounted
the reasons. After some thought, he realized that those reasons
could be extrapolated to the entire state. He found this a
little disconcerting because the cannabis industry is growing.
It's a bright spot in the Alaska economy in a time when there
aren't as many as there could be, he said.
MR. HAYNES said this highlights the importance of getting the
tax structure for the industry right because it will literally
make or break some cannabis businesses. He stressed that the
task force has a great opportunity to help one bright spot in
the Alaska economy.
5:47:22 PM
BRANDON EMMETT, representing self, Fairbanks, Alaska, stated
that he is the owner/operator of a cannabis company called Good
Titrations and is on the board of directors for the Alaska
Marijuana Industry Association (AMIA). He described the bill as
well written and inclusive of a broad range of stakeholders. He
offered his perspective that the existing tax structure for
marijuana needs to be adjusted. The price has dropped
considerable since 2017 but the tax floor is immobile. He views
this as poor policy for an agricultural product in an emerging
market. HB 289 provides the structure to create a more equitable
tax for the industry.
5:48:45 PM
SARAH OATES, representing self, Anchorage, Alaska, advised that
she is the President and CEO of Alaska CHARR, but today she was
speaking as an individual. She related that when she worked for
the Alcohol and Marijuana Control Office in 2017, she was tasked
with implementing the regulated marijuana industry. She said the
tax structure that was implemented at the time is not working.
She stressed that restructuring is essential to preserve a
robust, legal, and regulated cannabis industry and to help small
Alaska cannabis businesses succeed. HB 289 works to this end by
authorizing a diverse group of stakeholders to meet and provide
recommendations to the state on how to help the existing, highly
regulated industry be successful. She urged passage of HB 289.
5:50:13 PM
CHAIR COSTELLO noted that Aaron Morse, CEO of Great Northern
Cannabis was available to answer questions. She asked if he
supported the legislation.
5:50:25 PM
AARON MORSE, CEO and Co-Owner, Great Northern Cannabis,
Anchorage, Alaska, answered that GNC is a vertically integrated
operation and he was speaking in support of HB 289.
5:50:57 PM
CHAIR COSTELLO closed public testimony on HB 289 and solicited
the will of the committee.
5:51:06 PM
SENATOR MICCICHE stated strong support for HB 289. He summarized
that there had been a good faith effort to follow the marijuana
initiative, but the tax structure was fundamentally flawed,
which was preventing businesses from succeeding. Thus it was
appropriate to convene a task force to adjust the tax structure
and get the industry back on track.
SENATOR GRAY-JACKSON stated support for convening the task
force, but questioned why it couldn't meet in person
5:52:07 PM
REPRESENTATIVE HOPKINS answered that it was a policy call by the
House Labor and Commerce Committee to save money. The committee
worked with the Alcohol and Marijuana Control Office (AMCO), the
board, and industry members and the meetings have been virtual
for several years. He offered his understanding that AMCO has a
conference room that could be available but that would add cost.
He relayed that the six-month task force is paid for with
designated general fund (DGF) dollars from industry licensing
fees.
SENATOR GRAY-JACKSON clarified that she likes Zoom meetings as
opposed to in-person, she was just curious.
5:53:23 PM
CHAIR COSTELLO asked if task forces must meet in person unless
specifically authorized to meet virtually.
REPRESENTATIVE HOPKINS said he wasn't aware of any such
limitation. The bill specifically provides for virtual meetings
to save money.
CHAIR COSTELLO voiced support for subsection (f) on page 3, line
17 that specifically states the meetings may not take place in
person.
SENATOR REVAK provided supportive quips about the bill, the task
force, and the industry.
5:54:35 PM
SENATOR REVAK moved to report the committee substitute (CS) for
HB 289, work order 32-LS1317\G, from committee with individual
recommendations and attached fiscal note(s).
CHAIR COSTELLO found no objection, and CSHB 289(FIN) was
reported from the Senate Labor and Commerce Standing Committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 227 Amendment W.2.pdf |
SL&C 5/10/2022 9:00:00 AM |
HB 227 |