Legislature(2021 - 2022)BELTZ 105 (TSBldg)
05/10/2022 09:00 AM Senate LABOR & COMMERCE
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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 to bill so 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, and 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 asked 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 and 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.
|HB 227 Amendment W.2.pdf||
SL&C 5/10/2022 9:00:00 AM