Legislature(2015 - 2016)CAPITOL 106

02/03/2015 03:00 PM House HEALTH & SOCIAL SERVICES

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                  HB 59-MARIJUANA CONCENTRATES                                                                              
3:10:19 PM                                                                                                                    
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."                                                                                           
REPRESENTATIVE  VAZQUEZ moved  to  adopt  the proposed  committee                                                               
substitute, (CS) for HB 59,  labeled 29-LS0257\P, Martin, 1/29/15                                                               
as  the working  draft.   There  being no  objection,  it was  so                                                               
3:10:46 PM                                                                                                                    
The committee took a brief at-ease.                                                                                             
3:11:32 PM                                                                                                                    
TANEEKA HANSEN,  Staff, Representative Paul Seaton,  Alaska State                                                               
Legislature,  introduced HB  59 as  staff for  the bill  sponsor,                                                               
Representative  Seaton.   She explained  that the  intent of  the                                                               
proposed bill  was to give  the regulating entity,  the Alcoholic                                                               
Beverage Control Board, a safety net  to ensure they were able to                                                               
write  the new  regulations  while maintaining  commercialization                                                               
and sales  as detailed in the  initiative.  This would  delay the                                                               
implementation of regulations solely  on concentrates for no more                                                               
than one  year, if  necessary.  She  declared that  this proposed                                                               
bill  was focused  on health  concerns  and was  not intended  to                                                               
address any legal issues.                                                                                                       
3:12:54 PM                                                                                                                    
MS. HANSEN directed attention to  the Sectional Analysis, Version                                                               
P,  [Included in  members'  packets] and  stated  that Section  1                                                               
contained legislative  intent language,  which explained  that in                                                               
order  to  implement  the  marijuana  initiative  in  an  orderly                                                               
process, the  legislature intended to  focus first on  the growth                                                               
and  sale  of marijuana  and  to  delay regulations  relating  to                                                               
marijuana  concentrates for  not more  than a  year.   She stated                                                               
that during  the delay  period, these  activities related  to the                                                               
commercialization   of   marijuana  concentrates   would   remain                                                               
illegal.   Moving  on to  Sections 2  - 4,  she noted  that these                                                               
amended  the language  in AS  17.38.070(a) -  (c) to  clarify the                                                               
initiative  language  and  change   the  term  "registration"  to                                                               
"license."  She pointed to  Section 5, which amended the language                                                               
to also replace  "registration" with "license."   She stated that                                                               
Section 6 would require the  board to adopt regulations governing                                                               
marijuana concentrates, and would  include labeling and packaging                                                               
requirements,   prohibitions  on   combining  concentrates   with                                                               
nicotine   or  alcohol,   and  prohibitions   on   the  sale   of                                                               
concentrates in establishments  that sell or serve  alcohol.  She                                                               
directed attention to Sections 7  - 11, which amended language to                                                               
replace  "registration"   with  "license."    Section   12  added                                                               
subsection (i)  which stated  that a license  under AS  17.38 did                                                               
not authorize a marijuana  establishment to manufacture, deliver,                                                               
or   possess  marijuana   concentrates  or   products  containing                                                               
marijuana concentrates.   She  pointed out  that this  would keep                                                               
marijuana concentrates  illegal until regulations were  in place.                                                               
Addressing Sections 13  - 21, she stated that  these also amended                                                               
AS  17.38.110  to replace  "registration"  with  "license."   She                                                               
explained Section  22, which defined marijuana  concentrates as a                                                               
substance  created  by  extracting  cannabinoids  from  marijuana                                                               
using a  solvent other than  water for the purpose  of increasing                                                               
the concentration of  the cannabinoids.  She  stated that Section                                                               
23 replaced "registration" with  "license" in AS 43.61.030, while                                                               
Section 24 repealed subsection (i),  created earlier on page 6 of                                                               
the proposed bill,  effective on either November 24,  2016, or an                                                               
earlier  date  on  which the  Alcoholic  Beverage  Control  Board                                                               
completed  the  regulations  required  under  Section  6  of  the                                                               
proposed bill.  She concluded  with Section 25, which established                                                               
an immediate effective date for the proposed bill.                                                                              
3:16:52 PM                                                                                                                    
REPRESENTATIVE TARR  asked for clarification  of the dates.   She                                                               
relayed that  the initiative  would take  effect on  February 24,                                                               
2015, although  the Alcoholic Beverage Control  (ABC) Board would                                                               
draft regulations  for growth and sales  throughout the following                                                               
nine  months; during  the year  following this,  through November                                                               
24, 2016,  the board  would focus on  concentrates.   She offered                                                               
her belief  that the actual  delay was 1  year and 9  months from                                                               
the date of legalization.                                                                                                       
MS. HANSEN replied  that this would allow a  delay in regulations                                                               
for  an additional  year, although  this could  be sooner  if the                                                               
regulations were completed.                                                                                                     
CHAIR SEATON  clarified that this  did not delay  the regulations                                                               
for  growing or  processing operations,  or for  sales.   It just                                                               
delayed  for  up  to  one   year  the  regulations  for  chemical                                                               
extraction  and manufacture  of edible  and non-edible  products.                                                               
He said that  this was not a delay of  any regulations defined by                                                               
the initiative for growing, processing,  or sales.  He reiterated                                                               
that the  intent of  the legislation was  for an  orderly process                                                               
for  the  new  regulations,  whether  written  by  the  Alcoholic                                                               
Beverage Control Board or a new board.                                                                                          
3:19:13 PM                                                                                                                    
REPRESENTATIVE STUTES asked for  clarification whether this would                                                               
affect the dates for sales of marijuana.                                                                                        
MS. HANSEN, in  response, explained that the  proposed bill would                                                               
only affect  the dates for  sales of marijuana  concentrates, not                                                               
for  any other  marijuana products.   She  added that  should the                                                               
regulations  be  completed  sooner, then  marijuana  concentrates                                                               
would also  be available for retail  sale.  She pointed  out that                                                               
the title of  the proposed bill had necessitated  an expansion to                                                               
allow  a word  change,  as there  had been  a  request to  change                                                               
"registration" to "license."                                                                                                    
REPRESENTATIVE STUTES  offered her belief that  the proposed bill                                                               
related  to   marijuana  establishments  and  the   licensing  of                                                               
marijuana   establishments,  and   did  not   specifically  state                                                               
marijuana  concentrates.    She  opined that  the  proposed  bill                                                               
included all  the parameters,  and not  just those  for marijuana                                                               
MS.  HANSEN  replied that  the  only  changes to  the  initiative                                                               
language presented  in the proposed bill  related specifically to                                                               
the  marijuana concentrates,  and it  also substituted  "license"                                                               
for "registration."                                                                                                             
3:22:02 PM                                                                                                                    
CHAIR  SEATON clarified  that the  term "registration"  was often                                                               
used to  represent something which  was applied for  and obtained                                                               
simply   by   paying   a    fee,   whereas   "license"   included                                                               
qualifications,   provisions,  and   possible  endorsements   not                                                               
usually included  with "registration."   He stated that  this was                                                               
to ensure  regulatory alignment similar  to liquor  licenses, and                                                               
this  change necessitated  a  modification in  the  title to  the                                                               
proposed bill, as well.                                                                                                         
3:23:32 PM                                                                                                                    
REPRESENTATIVE  TARR  asked  how other  committees  listening  to                                                               
similar legislation  had reacted to "this  particular carve out,"                                                               
and then  questioned whether the  ABC board supported use  of the                                                               
same licensing model as currently used by the ABC.                                                                              
MS.  HANSEN replied  that the  ABC  board was  on-line to  answer                                                               
questions.   She  stated  that,  as the  board  had indicated  an                                                               
interest in moving  forward as quickly as  possible, the proposed                                                               
bill was "more  of a safety net."  She  directed attention to the                                                               
reference to effective  dates and the repeals in  Sections 24 and                                                               
25.  She pointed out that  one of the proposed changes in Version                                                               
P was  to ensure that  the board  could move forward  whenever it                                                               
was prepared.   She  reiterated that the  intent of  the proposed                                                               
bill was to  allow the Alcoholic Beverage Control  (ABC) Board to                                                               
focus  on  growth, manufacture,  and  retail  sale of  the  plant                                                               
products,  so as  to not  short change  that structure  and those                                                               
regulations before  moving on to  address the concentrates.   She                                                               
noted that there  had been more health  concerns for concentrates                                                               
in other states, and there were many necessary regulations.                                                                     
CHAIR  SEATON shared  that the  date in  the proposed  bill would                                                               
prevent  any   unnecessary  delay   for  the   implementation  of                                                               
concentrates, as it limited the extension to one year.                                                                          
3:26:44 PM                                                                                                                    
REPRESENTATIVE   WOOL  asked   to  clarify   that  the   sale  of                                                               
"vegetative  marijuana" would  be  legal in  November, 2015,  but                                                               
that there  would be postponement of  up to one year,  if needed,                                                               
for  the rest  of the  regulations.   He asked  if there  was any                                                               
reason   the   regulatory  agency   could   not   work  on   this                                                               
concurrently,  as there  were  already  ongoing discussions  with                                                               
states that had legalized sales.                                                                                                
MS. HANSEN replied that, although  there were ongoing discussions                                                               
with the  other states, there  were many complex  regulations and                                                               
that the  proposed bill would  ensure an orderly process  for the                                                               
testing  and packaging  regulations.   She pointed  out that  the                                                               
goal was to ensure that the  regulations for growing of the plant                                                               
products, as  this was the first  step for the industry,  were in                                                               
place first.                                                                                                                    
REPRESENTATIVE VAZQUEZ  pointed out  that the delay  was actually                                                               
for more  than a  year, as legality  was established  on February                                                               
24,  2015, with  the regulations  to  be issued  by November  24,                                                               
2015.   She  offered  her  belief that  this  extension could  be                                                               
perceived  by  a  court  to  be a  frustration  of  the  people's                                                               
initiative.   She opined  that this proposed  time frame  was too                                                               
long to  justify.  She  recognized a need  for time to  write the                                                               
regulations, and  she suggested that  a total of one  year seemed                                                               
to be more reasonable.  She  stated that she would need to review                                                               
the initiative  to determine whether  the proposed bill  would be                                                               
upheld by the court.  She  noted that it was their responsibility                                                               
to  implement  the  will  of  the  people,  regardless  of  their                                                               
personal feelings.                                                                                                              
CHAIR SEATON explained  that the intent of the  proposed bill was                                                               
to ensure  an orderly process.   He pointed out that  the maximum                                                               
duration  for  delay was  one  year  after the  commercial  sales                                                               
regulations were  established for  vegetative product.   He added                                                               
that there was  nothing in the proposed bill  that prohibited the                                                               
regulatory board from moving forward  on both sets of regulations                                                               
at the same time.   He offered his hope that it  would be an open                                                               
and transparent  public process,  and that  the added  time would                                                               
allow the process  to work without any rush.   He opined that the                                                               
worst case would  be from problems due  to inadequate regulations                                                               
which  had been  rushed.   He  pointed out  that  there were  two                                                               
industries  to regulate:  growth,  processing, and  sales of  raw                                                               
product; and  the chemical extraction, infusion,  and manufacture                                                               
of edible and non-edible products.                                                                                              
REPRESENTATIVE WOOL asked to clarify  that, although the proposed                                                               
bill would allow  the legal sale of concentrates  on November 24,                                                               
2016, the  possession of concentrates  would be illegal  prior to                                                               
that time.                                                                                                                      
MS. HANSEN  offered her belief  that the proposed bill  would not                                                               
have  any effect  on personal  use, and  would only  be concerned                                                               
with commercial production and sale.                                                                                            
REPRESENTATIVE  WOOL asked  if there  was an  increased risk  for                                                               
incendiary  accidents because  of unregulated  use as  opposed to                                                               
the opportunity to purchase the concentrate legally.                                                                            
MS.  HANSEN, in  response, said  that  the bill  sponsor had  not                                                               
reviewed this  specific issue, although  this had  been discussed                                                               
in other  committees.   She allowed that,  although there  was an                                                               
understandable concern,  there were  other safer  process options                                                               
for   extraction.     She   reiterated   that  legalization   for                                                               
concentrates  would be  shortly after  the legalization  of plant                                                               
products, no  more than one  year.   She offered her  belief that                                                               
the risk for accidents should be  weighed against the risk from a                                                               
rush to regulations.                                                                                                            
CHAIR   SEATON,  referencing   butane   explosions  during   home                                                               
processing  in Colorado  after legalization,  opined that  people                                                               
may  not  have  wanted  to  pay  the fees  and  the  taxes.    He                                                               
questioned any direct  connection between commercial availability                                                               
and price with the actions of individuals.                                                                                      
3:35:23 PM                                                                                                                    
REPRESENTATIVE TARR  expressed her  concern for  the difficulties                                                               
to  local control  due  to a  domino effect  from  delays by  the                                                               
legislature.    She asked  if  any  local government  groups  had                                                               
responded to the proposed bill.                                                                                                 
MS. HANSEN replied that there  had not been any specific response                                                               
from  municipal organizations,  although  there was  a letter  in                                                               
support  of the  proposed  bill from  the  Alaska Peace  Officers                                                               
Association (APOA)  [Included in members' packets].   She allowed                                                               
that  the proposed  bill would  not affect  municipal ability  to                                                               
have marijuana  retail, growth,  or processing  operations within                                                               
the city  limits.  She  pointed out  that the licensing  would be                                                               
expanded,  per  approval  by  the   regulatory  board,  when  the                                                               
regulations became effective.                                                                                                   
REPRESENTATIVE  TARR  opined that  this  could  force a  decision                                                               
without  all the  necessary information,  potentially influencing                                                               
local sales  and restrictions.   She suggested that  there needed                                                               
to  be  careful  consideration   for  these  interfaces  and  the                                                               
CHAIR SEATON expressed  his agreement with the  complexity of the                                                               
issue,  pointing out  that these  were  very different  products,                                                               
including  edibles, salves,  infusions, and  patches.   He stated                                                               
that   there   were   a   lot   of   ramifications   beyond   the                                                               
commercialization of the plant products.   He reiterated that, as                                                               
there were  many complex  issues, the  proposed bill  would allow                                                               
for  a focus  on  regulations for  the  growing, processing,  and                                                               
retail  sales  of the  plant  product,  to be  initiated  without                                                               
delay.  He  allowed that, although the second  set of regulations                                                               
could be  pursued concurrently, the  proposed bill  allowed these                                                               
regulations to be delayed.                                                                                                      
3:41:18 PM                                                                                                                    
CHAIR SEATON,  directing attention to the  labeling and packaging                                                               
requirements in  Version P, Section  24, said that there  was not                                                               
an intent  to establish details  for these requirements,  as this                                                               
task was  more appropriate  for the regulatory  board.   He noted                                                               
that  page 4  of  the  proposed bill  did  prohibit  the sale  of                                                               
marijuana concentrates  combined with  nicotine and alcohol.   He                                                               
expressed his desire that availability  of this product for self-                                                               
medication would result in a  switch from alcohol, as alcohol had                                                               
more down  side consequences.   He acknowledged that  many people                                                               
could mix  alcohol with  THC.   He explained  that, as  there was                                                               
physical addiction  with nicotine,  the proposed  bill prohibited                                                               
its mix with  marijuana.  He reminded the committee  that, as the                                                               
sale of  nicotine products had  been prohibited to  minors, there                                                               
was  not going  to  be  any mechanism  for  the  further sale  of                                                               
addictive products,  page 4, line  30.  On  page 5, line  1 there                                                               
was  a prohibition  on the  sale of  marijuana in  establishments                                                               
that  sell alcohol,  so that  people who  might be  changing from                                                               
self-medicating  with alcohol  will  not be  surrounded by  their                                                               
previous addiction when they go to purchase marijuana.                                                                          
CHAIR SEATON,  in response to Representative  Wool, expressed his                                                               
agreement  that the  intent was  to prohibit  the combination  of                                                               
marijuana and nicotine in "a cocktail."                                                                                         
CHAIR SEATON, in response to  Representative Wool, explained that                                                               
the   proposed  bill   would  require   the  sale   of  marijuana                                                               
concentrate  products  at  separate  venues  from  those  selling                                                               
alcohol.   He  expressed  his agreement  that  the proposed  bill                                                               
would offer an  indication to the regulatory board  of its intent                                                               
for health and  social issues.  He expressed his  desire for full                                                               
discussion of this  aspect, as it was now included  in Version P,                                                               
Section 6.                                                                                                                      
3:47:39 PM                                                                                                                    
REPRESENTATIVE STUTES  asked if the  intent was to not  allow the                                                               
usage of marijuana in an establishment selling alcohol.                                                                         
CHAIR  SEATON replied  that  the proposed  bill  did not  address                                                               
usage, and that  he was unsure of the use  of marijuana in public                                                               
establishments under the initiative.                                                                                            
3:49:11 PM                                                                                                                    
The committee took a brief at-ease.                                                                                             
3:50:05 PM                                                                                                                    
CHAIR SEATON opened public testimony.                                                                                           
3:50:29 PM                                                                                                                    
RACHELLE  YEUNG, Legislative  Analyst, Marijuana  Policy Project,                                                               
explained that the Marijuana Policy  Project was a national, non-                                                               
profit  organization  based in  Washington,  D.C.,  and that  the                                                               
organization had  been working with  local Alaskan  activists for                                                               
many years.  She shared that  they had served as legal and policy                                                               
council for  the Campaign to  Regulate Marijuana Like  Alcohol in                                                               
Alaska  in   support  of   the  recent   ballot  measure.     She                                                               
acknowledged the intent  of the proposed bill  for thoughtful and                                                               
deliberate rule making, and declared  confidence in the abilities                                                               
of  the  Alcoholic Beverage  Control  (ABC)  Board to  adequately                                                               
undertake  the  mandate under  Measure  2  while abiding  by  its                                                               
timeline.   She pointed  out that  Cynthia Franklin,  director of                                                               
the  ABC board,  had already  begun research  and appeared  to be                                                               
willing and  able to  abide by the  deadlines by  the initiative.                                                               
She expressed  that the primary  concern with proposed HB  59 was                                                               
for any delay that would contradict  the will of the voters.  She                                                               
declared  that marijuana  concentrates  were  included under  the                                                               
definition  of marijuana  in Measure  2, and  that manufacturers'                                                               
sale  and possession  of these  products should  be treated  with                                                               
parity.   She stated  that the position  of the  Marijuana Policy                                                               
Project  was  that   HB  59,  as  currently   drafted,  would  be                                                               
unconstitutional.   She emphasized that the  initiative expressly                                                               
specified that the state had no  later than nine months after the                                                               
effective date to  craft regulations to implement  the law, which                                                               
applied  to   all  aspects  of  marijuana,   including  marijuana                                                               
concentrate.  She  pointed out that proposed  HB 59 fundamentally                                                               
altered  the time  line for  implementation, as  approved by  the                                                               
voters of Alaska.  She added  that, other than concern for points                                                               
of  the   proposed  bill  being   unconstitutional  due   to  the                                                               
alteration  of the  time line,  marijuana concentrates  currently                                                               
existed in Alaska, and would  continue to exist even with passage                                                               
of  the proposed  bill  in its  current form.    She stated  that                                                               
proposed HB  59 would simply  ensure that control over  the sales                                                               
and production  of these concentrates  would remain on  the black                                                               
market for  another year,  and allow  for criminals  to recognize                                                               
these profits.   She added that this could increase  the risk for                                                               
explosions  or  other  incidences by  unlicensed  businesses,  as                                                               
these  businesses  did not  have  the  specialized equipment  and                                                               
safeguards of a licensed, accountable business.                                                                                 
3:55:30 PM                                                                                                                    
REPRESENTATIVE TARR  asked whether her  organization participated                                                               
in the implementation  of bills and engaged in law  suits if they                                                               
determined that the law was  not being properly implemented.  She                                                               
asked about the longevity for her organization within Alaska.                                                                   
3:56:05 PM                                                                                                                    
MS.  YEUNG, in  response, said  that her  organization envisioned                                                               
continual  assistance with  the  Alaska  campaign throughout  the                                                               
implementation process.  She noted  that its role depended on the                                                               
needs  of the  activist, and  she  shared that  the campaign  had                                                               
requested support  during the implementation  process.   She said                                                               
that she  had never  personally been involved  in a  lawsuit, and                                                               
she expressed  her hope that there  was not a lawsuit  in Alaska.                                                               
She  declared  that should  any  bill  fundamentally violate  the                                                               
intent of the voters under the  initiative, then a lawsuit may be                                                               
an  option  to consider,  although  her  organization would  much                                                               
prefer not to go down that path.                                                                                                
3:57:12 PM                                                                                                                    
CYNTHIA  FRANKLIN,  Director,  Alcoholic Beverage  Control  (ABC)                                                               
Board, expressed her understanding  for the motivation behind the                                                               
proposed bill, as her recent  visit to Colorado had revealed that                                                               
many   of  their   issues  for   the   implementation  of   legal                                                               
recreational marijuana had centered on  the edible products.  She                                                               
reported  that  she  did,  however, have  some  issues  with  the                                                               
proposed  bill,  noting  that  she was  not  satisfied  that  the                                                               
definition  of concentrates,  as  it would  raise more  questions                                                               
than  it solved.   She  stated  that the  methodology for  making                                                               
marijuana concentrate  observed in Colorado was  in contrast with                                                               
these definitions.   She offered  her belief that the  ABC Board,                                                               
as well  as a marijuana  control board, were capable  for getting                                                               
rules in  place for concentrates  during the timeframe  set forth                                                               
in the  initiative, although she  understood the "spirit  of this                                                               
bill in  the sense that  if we ran  into problems, that  it would                                                               
permit us to  go past the timeline."  She  questioned whether the                                                               
intent  of the  proposed  bill  was for  a  separate license  for                                                               
concentrates, as AS 17.38 did  not have a separate definition for                                                               
marijuana  concentrate.   She stated  that  neither Colorado  nor                                                               
Washington had a  separate license for edibles.   She pointed out                                                               
that, as  there was a  federal prohibition for  transportation of                                                               
marijuana, there was a  possibility for unnecessary complications                                                               
with many  licenses in Rural  Alaska.  She referenced  Version P,                                                               
Section  6, and  opined  that  it appeared  that  the writing  of                                                               
prohibition  for  combinations  of  marijuana  concentrates  with                                                               
nicotine and  tobacco, or for having  marijuana concentrates sold                                                               
on the  same premises as alcohol,  were being foisted on  a state                                                               
agency, whereas  it should  be the  responsibility of  the Alaska                                                               
State  Legislature to  make this  determination.   She  expressed                                                               
support   for  the   allowance  of   a  shortened   timeline  for                                                               
regulations if they  were ready to be put into  place, as she was                                                               
confident that the timeline as  expressed by the initiative could                                                               
be achieved.   She  offered her  belief that  many of  the issues                                                               
regarding marijuana  concentrate products arose from  the medical                                                               
marijuana  dispensaries  in  Colorado, which  offered  very  high                                                               
potency products  for patients with  a very high tolerance.   She                                                               
pointed  out that  the more  recent legalization  of recreational                                                               
marijuana in Colorado had increased  the market which had in turn                                                               
created these issues.  She pointed  out that Alaska, as the state                                                               
did not  have medical marijuana  dispensaries, was able  to learn                                                               
from Colorado and  had the advantage for making  the rules before                                                               
the market was  created.  She expressed her  appreciation for the                                                               
intent of proposed HB 59 to  ensure that good regulations were in                                                               
place prior to  the public availability for these  products.  She                                                               
opined that  the regulations could  still be completed  along the                                                               
original timelines.                                                                                                             
4:05:16 PM                                                                                                                    
MS. FRANKLIN,  in response to Representative  Stutes, stated that                                                               
she was  the Director  of the  Alcoholic Beverage  Control Board.                                                               
She pointed out that the  agency was currently responsible, under                                                               
AS  17.38, for  the rules  and implementation  to the  commercial                                                               
marijuana operations.                                                                                                           
REPRESENTATIVE TARR asked  to clarify that the ABC  Board felt it                                                               
could implement  all necessary  regulations within  the currently                                                               
allotted time frame.                                                                                                            
MS. FRANKLIN concurred.                                                                                                         
REPRESENTATIVE  TARR  asked  if   the  proposed  substitution  of                                                               
"license" for "registration" was an appropriate model.                                                                          
MS. FRANKLIN expressed  her agreement, noting that  this had been                                                               
requested by the board.   She explained that liquor licenses were                                                               
a privilege,  not a right;  whereas, the term  "registration" was                                                               
not in sync with the process for this substance.                                                                                
REPRESENTATIVE  TARR  asked  whether  the  proposed  process  for                                                               
marijuana licenses  would be similar  to the issuance  of alcohol                                                               
MS. FRANKLIN  replied that the  marijuana license rules  were yet                                                               
to  be  written, and  that  there  could be  different  licensing                                                               
methods,  including for  the transferability  of  licenses.   She                                                               
explained  that,  in  the  experience   of  the  ABC  board,  the                                                               
secondary  market  value  of  liquor  licenses  had  caused  many                                                               
issues.   She  suggested that  the method  for license  selection                                                               
could be different  than population based.  She  pointed out that                                                               
there were other methods in  other states, noting that Nevada had                                                               
a  high standard  merit selection  process without  limits.   She                                                               
acknowledged that  the board  would discuss  the type  of license                                                               
selection   process,   and   whether  the   licenses   would   be                                                               
transferable.    She allowed  that  the  previous experience  for                                                               
liquor licensing  would be  informative, but  would not  be "knee                                                               
jerk  mirroring of  liquor  licensing."   She  stated that  there                                                               
would not  be a "this  is what we  do with alcohol,  so therefore                                                               
this  is what  we're  gonna  do with  marijuana"  approach.   She                                                               
declared   that  it   would  be   a   situation  for   evaluating                                                               
cultivation,   processing,   and   sales,  and   then   reviewing                                                               
situations that have  arisen with the liquor  licensing system to                                                               
find the best possible path.                                                                                                    
4:10:13 PM                                                                                                                    
CHAIR  SEATON asked  whether the  ABC  Board had  the ability  to                                                               
design those licenses outside of statute.                                                                                       
MS.  FRANKLIN, in  response, stated  that the  regulation writing                                                               
process  was already  set  forth in  AS  44, and  that  it was  a                                                               
process which  allowed public  input.   She anticipated  that the                                                               
board would wrestle  with the decisions and  would include public                                                               
input.   She shared  that, generally speaking,  AS 17.38  did not                                                               
give  much authority  to the  board beyond  making the  rules, so                                                               
that  a job  for the  legislature was  to determine  whether this                                                               
would be written  by the ABC Board or a  marijuana control board,                                                               
and then  outlining the  authority of that  board.   This outline                                                               
would  allow  the  Alaska  State  Legislature  to  determine  any                                                               
amendments  to the  statute for  further definition  to types  of                                                               
licenses and  transferability of licenses.   She stated  that the                                                               
board believed that many of  these decisions were appropriate for                                                               
the regulation making process, as  this was a public process, and                                                               
that any  changes were  more easily  made through  the regulation                                                               
4:13:59 PM                                                                                                                    
CHAIR SEATON asked about the idea  for one license, which did not                                                               
segregate  sales, cultivation,  product manufacture,  extraction,                                                               
or infusion.                                                                                                                    
MS. FRANKLIN replied that the  board anticipated several tiers of                                                               
licenses,  including cultivation,  retail sales,  and processing,                                                               
similar to the alcohol licenses.   She relayed that the board had                                                               
not anticipated  a separate license or  endorsement for marijuana                                                               
concentrates, although the board  agreed that cultivation, retail                                                               
sales,  and some  type of  processors licenses  were appropriate.                                                               
She  reported that  businesses in  other states  could hold  more                                                               
than one type  of license.  She reiterated that  she hesitated to                                                               
create a  separate licensing category for  marijuana concentrates                                                               
because the  definition for marijuana in  the initiative included                                                               
the entire  plant.  She reminded  the committee that all  of this                                                               
was still speculative as the rules were not yet written.                                                                        
4:17:23 PM                                                                                                                    
REPRESENTATIVE TARR  referenced confusion by the  public for what                                                               
was  legal, what  an individual  could  do, and  what required  a                                                               
license.  She  asked if there was a vision  for additional public                                                               
meetings to  ensure a lot  of feedback and understanding  for the                                                               
impacts to Alaskans.                                                                                                            
MS. FRANKLIN  replied that  the ABC  Board had  posted frequently                                                               
asked questions on its website, as  well as a form for the public                                                               
to  request additional  updates.   She relayed  that the  board's                                                               
staff were available to answer  questions, noting there were only                                                               
10 employees statewide.                                                                                                         
4:20:21 PM                                                                                                                    
REPRESENTATIVE  WOOL  asked  about   consumption  on  a  licensed                                                               
premise,  similar to  wholesale  and retail,  and  the way  other                                                               
states had handled this.                                                                                                        
MS.  FRANKLIN replied  that initial  consideration was  given for                                                               
the interaction  of smoking, a  common use, and smoking  rules in                                                               
semi-public  places,  and that  it  was  determined it  would  be                                                               
difficult to  establish marijuana smoking premises.   She offered                                                               
her  belief  that this  would  happen  eventually, whether  these                                                               
licenses  were issued  initially or  later.   She noted  that the                                                               
only  mention  for  consumption  in  AS  17.38  was  to  prohibit                                                               
consumption in public.  She  suggested that the board may address                                                               
the  definition  for public,  in  this  case, as  consumption  of                                                               
marijuana  with  others  in  an  invited  public  place  was  not                                                               
specifically addressed.   She opined that it may  not be licensed                                                               
in the initial round.                                                                                                           
4:23:00 PM                                                                                                                    
REPRESENTATIVE  VAZQUEZ  asked  how  many  states  had  legalized                                                               
MS. FRANKLIN  replied that there  were four states:   Washington,                                                               
Alaska,  Oregon, and  Colorado.   She reported  that she  and her                                                               
group, the Coalition of Legalized  Marijuana States, had met with                                                               
the  Colorado  regulators to  compare  and  discuss ideas.    She                                                               
relayed that Alaska did not have  many of the problems and issues                                                               
which  Colorado had,  whereas Oregon  was moving  in a  different                                                               
regulatory direction, not allowing any  local controls.  She said                                                               
that Alaska  would be  the first state  to write  regulations for                                                               
legalized marijuana operations from ground zero.                                                                                
REPRESENTATIVE  VAZQUEZ asked  whether  other  states had  issued                                                               
regulations on marijuana concentrates.                                                                                          
MS. FRANKLIN replied that Colorado  had to re-write its rules for                                                               
concentrates during  its first year  of legalization, 2014.   She                                                               
explained that edible  products, as well as  other products, used                                                               
concentrates,  but  that some  products  needed  more rules  than                                                               
others.    She offered  her  belief  that the  motivation  behind                                                               
proposed  HB  59  was  because edibles  needed  the  most  rules.                                                               
Noting that  these were  new in a  retail setting,  she discussed                                                               
the importance  for defining  a serving  size and  for certifying                                                               
the  level  of  THC  in  each serving.    She  pointed  out  that                                                               
consumers needed to  have a good understanding of  what they were                                                               
eating and what  effects it could have.  She  reported that other                                                               
marijuana concentrate products, such  as tinctures or homeopathic                                                               
drops, were more  straightforward as they did not  enter the body                                                               
through the stomach.  She stated  that, as the edibles often took                                                               
longer to  act, larger than  necessary doses were ingested.   She                                                               
shared that  Colorado had  to re-write its  rules, and  the state                                                               
had removed all  of the higher strength edibles,  those with more                                                               
than 100  milligram (mg) of  THC, from the shelves,  leaving only                                                               
the lower concentrate products.   The serving sizes could contain                                                               
no more than 10 mg of THC.   She said that Colorado had discussed                                                               
5  mg serving  sizes, with  a maximum  of 50  mg in  the package,                                                               
which  was  a  serving  size  that Alaska  was  reviewing.    She                                                               
mentioned  the Colorado  campaign,  "Start low,  go slow,"  which                                                               
suggested  to start  with  a low  amount of  THC,  and go  slowly                                                               
before you  consume any more.   She compared this to  the effects                                                               
of alcohol on the system.                                                                                                       
4:30:20 PM                                                                                                                    
CHAIR SEATON referred  to the vision for one  retail license, and                                                               
asked whether communities  would then be able  to select options.                                                               
He offered  his belief  that the  license would  allow everything                                                               
retail that  can be sold  would be permitted  to be sold  at that                                                               
MS.  FRANKLIN  explained that,  although  this  was the  Colorado                                                               
system,  it  was still  to  be  determined whether  Alaska  would                                                               
follow this format.   She offered her belief that  there would be                                                               
more rules for the processing,  serving size, and labeling of the                                                               
edibles, than for the processing of  the leaves.  She shared that                                                               
the local  governing bodies would  still be able to  require that                                                               
all goods sold  be approved through all  the regulatory channels.                                                               
She said that  "there was no distinction between the  bud and the                                                               
leaves and  any of  the other  products containing  marijuana" so                                                               
the licensing for retail sale  applied to all products containing                                                               
marijuana in the Colorado shops.                                                                                                
4:33:18 PM                                                                                                                    
CHAIR SEATON  asked whether  the single  license form  would work                                                               
well with local communities.   He referenced earlier testimony in                                                               
the House Community and Regional  Affairs Standing Committee that                                                               
there  were  instances of  marijuana  in  combination with  other                                                               
drugs,  and  he  asked  if  the ABC  Board  was  reviewing  other                                                               
delivery  restrictions for  the use  of THC  in combination  with                                                               
other drugs.                                                                                                                    
MS. FRANKLIN replied that the  board had not yet considered this,                                                               
although  they anticipated  testing  requirements and  a need  to                                                               
determine  who  would conduct  the  testing.   She  reminded  the                                                               
committee that there was the  technology to track the plants from                                                               
first growth  to point  of sale.   She  suggested that  there was                                                               
"little chance  of it being  contaminated or combined  with other                                                               
drugs  because  it  is  quite  recognizable  in  its  bud  form."                                                               
Regarding the mix of marijuana  concentrate with other drugs in a                                                               
food product,  she declared the need  to rely on lab  testing and                                                               
the  licensee not  to contaminate  or  adulterate their  product.                                                               
She  said that  she was  not  aware that  this had  been a  major                                                               
4:36:36 PM                                                                                                                    
REPRESENTATIVE  TARR  referenced  on-line reports  [indisc]  that                                                               
were found to  be untrue.  She asked if  these reports of adverse                                                               
health reactions were occurring at  a frequency [indisc] and even                                                               
an  infrequent event  received a  lot  of attention.   She  asked                                                               
whether  the number  of  incidents had  reached  a public  health                                                               
MS. FRANKLIN reported that her  conversations with doctors at the                                                               
Children's Hospital in Colorado  revealed that the statistics for                                                               
children having a "bad trip"  from edibles showed that the actual                                                               
numbers reported went  from zero to 14 over a  three year period.                                                               
She  relayed that  the doctors  had stated  that there  were many                                                               
more children admitted to the  emergency room with poisoning from                                                               
ibuprofen, house  hold chemicals, or their  parents' prescription                                                               
drugs.   She reflected  that numbers  were sometimes  reported by                                                               
news agencies as  a percentage of increase, which  would make the                                                               
number of children admitted appear to be much larger.                                                                           
4:39:34 PM                                                                                                                    
REPRESENTATIVE  WOOL asked  whether there  had been  research for                                                               
the sales and use of marijuana in Amsterdam.                                                                                    
MS.  FRANKLIN replied  that, as  her  agency had  not received  a                                                               
supplemental budget for  a visit to Amsterdam, she  had only been                                                               
able to study this from afar  and she did not anticipate a visit.                                                               
She acknowledged  that, although Amsterdam  had had its  rules in                                                               
place  for a  long  period,  there was  a  different rule  making                                                               
process and  she had not gleaned  as much from Amsterdam  as from                                                               
other states in the United States.                                                                                              
4:40:53 PM                                                                                                                    
REPRESENTATIVE VAZQUEZ  asked whether  Washington and  Oregon had                                                               
issued separate regulations for marijuana concentrates.                                                                         
MS. FRANKLIN  replied that  she was not  aware that  either state                                                               
had  separated  marijuana  concentrates from  its  definition  of                                                               
marijuana.   She noted that  the ballot  measure in Alaska  had a                                                               
similar definition for marijuana as  the definition in both those                                                               
states.   She  reiterated that,  as  these were  the first  rules                                                               
which Colorado  had to revise,  Alaska now had the  advantage and                                                               
benefit of reviewing the revised rules from Colorado.                                                                           
REPRESENTATIVE  VAZQUEZ  asked   whether  all  marijuana  edibles                                                               
contained concentrates.                                                                                                         
MS. FRANKLIN  replied that there  was no effect from  chopping up                                                               
the  marijuana bud  or  leaf and  baking  it into  a  food.   She                                                               
explained  that  the  THC had  to  be  heated  in  an oil  to  be                                                               
effective as an edible.   She described the trichomes, or glands,                                                               
in the marijuana plant which  contained a higher concentration of                                                               
THC.  In order to most  effectively remove the THC, the marijuana                                                               
could be  simmered in  butter or  coconut oil  for 15  hours, and                                                               
then strained, before  using the butter or oil for  cooking.  She                                                               
said  it  was  also  possible   to  extract  the  trichomes  with                                                               
chemicals, CO2,  butane, or ice water.   She said that  her group                                                               
had witnessed CO2 and ice water  extraction in Colorado, and in a                                                               
licensed  facility there  was a  safe, regulated  environment for                                                               
this  extraction.   She noted  that  these dangerous  extractions                                                               
which often resulted in explosions  were performed in homes after                                                               
watching a You Tube video for the process.                                                                                      
4:45:20 PM                                                                                                                    
BRUCE  SHULTE, Spokesperson,  Coalition for  Responsible Cannabis                                                               
Legislation,  directed attention  to a  summary handout  from the                                                               
Coalition  [Included  in  members'  packets] and  said  that  the                                                               
coalition  respectfully  disagreed  with  the  sponsor  statement                                                               
which  asserted that  the regulation  of concentrates  was overly                                                               
complex and should  be delayed.  He expressed  agreement with the                                                               
testimony  from  Ms.  Franklin  that  the  regulations  could  be                                                               
finalized in the  timeframe specified in the ballot  measure.  He                                                               
expressed  concern  with the  proposed  bill  as it  appeared  to                                                               
redefine  marijuana and  its concentrate  derivatives separately.                                                               
He   pointed  out   that,  as   the  ballot   initiative  clearly                                                               
articulated the  products under consideration, the  proposed bill                                                               
would be contrary  to the intent of the initiative.   He reminded                                                               
the  committee  that  the  discussion  was  for  an  agricultural                                                               
product  and  that  each  plant produced  a  core  material,  the                                                               
flowers,  as well  as  a significant  portion  of byproduct,  the                                                               
trim.  He  relayed that the trim could represent  30 - 50 percent                                                               
of  the total  product volume  and was  used in  the creation  of                                                               
concentrates  and edibles,  a significant  secondary market  from                                                               
the growers  to the processors.   He offered his belief  that the                                                               
delay of this segment of the  market for one year would force the                                                               
growers to destroy 30 - 50  percent of the crop, which could make                                                               
the industry  economically untenable.   He  opined that  this was                                                               
not in line  with the initiative, which he read,  in part:  "such                                                               
regulations  shall  not  prohibit   the  operation  of  marijuana                                                               
establishments either expressly or  through regulations that make                                                               
the  operation unreasonably  impracticable."   He contended  that                                                               
this enforcement  for the destruction of  30 - 50 percent  of the                                                               
crop with  no compensation  was contrary to  the initiative.   He                                                               
stated  that this  was the  main concern  of the  coalition.   He                                                               
reiterated  that the  marijuana flower  had direct  marketability                                                               
and  that the  rest of  the plant  was a  secondary product.   He                                                               
reported  that Alaska  marijuana  was renowned  for its  quality,                                                               
and, as  it was  grown indoors  under controlled,  but expensive,                                                               
circumstances, it was  economically necessary to have  use of the                                                               
entire  plant.    He  suggested  that  the  proposed  bill  could                                                               
effectively kill the industry.                                                                                                  
CHAIR SEATON  asked whether the  marijuana industry had  not been                                                               
economically viable in  the past, as it was not  possible for the                                                               
concentrate  extractions.     He  expressed  surprise   that  the                                                               
proposed bill would create an economically unviable situation.                                                                  
MR. SHULTE  replied that the industry  was presently economically                                                               
viable,  although,  as it  was  not  currently regulated  in  any                                                               
manner, the black  market was processing all parts  of the plant.                                                               
He pointed out  that, as this very large industry  was now moving                                                               
toward  a  regulated,  legitimate business  model,  those  people                                                               
participating  in  a  legitimate   industry  were  bound  by  the                                                               
regulations and would be affected.                                                                                              
REPRESENTATIVE  WOOL   asked  to   clarify  whether  a   lack  of                                                               
regulations  would  allow  the  price to  absorb  the  loss  from                                                               
disposal of  product, or that  there was processing and  sales on                                                               
the  black  market.    He  opined that  the  price  was  able  to                                                               
compensate for the loss.                                                                                                        
MR. SHULTE  replied that  it was  "probably a bit  of both."   He                                                               
offered his  belief that the  black market had less  incentive to                                                               
re-capture the value of the trim,  as there was not an excise tax                                                               
and  other   costs  associated  with  regulated   industry.    He                                                               
expressed agreement that  the trim did get  used, often processed                                                               
into hash and hash oil for sales.                                                                                               
4:53:04 PM                                                                                                                    
[HB 59 was held over.]                                                                                                          

Document Name Date/Time Subjects
HB 59_Ver E.PDF HHSS 2/3/2015 3:00:00 PM
HB 59
HB 59_Draft Proposed Blank CS Ver P.pdf HHSS 2/3/2015 3:00:00 PM
HB 59
HB 59 Sectional Analysis_ Ver P.pdf HHSS 2/3/2015 3:00:00 PM
HB 59
HB 59 Letter of support_APOA.pdf HHSS 2/3/2015 3:00:00 PM
HB 59
HB059-LAW-CRIM-01-30-15.pdf HHSS 2/3/2015 3:00:00 PM
HB 59
HB059-DCCED-ABC-01-30-15.pdf HHSS 2/3/2015 3:00:00 PM
HB 59
HB 59_Sponsor Statement.pdf HHSS 2/3/2015 3:00:00 PM
HB 59
CRCL WhitePaper Jan28-2015.pdf HHSS 2/3/2015 3:00:00 PM
HB 59
HB 59_Opposition Testimony_Marijuana Policy Project.pdf HHSS 2/3/2015 3:00:00 PM
HB 59
HB 59_opposition_CRCL-CommentsOnHB59-Feb-2-2015.pdf HHSS 2/3/2015 3:00:00 PM
HB 59
HB 59 Explanation of changes_ver E to P_draft.pdf HHSS 2/3/2015 3:00:00 PM
HB 59