Legislature(2015 - 2016)BARNES 124

02/03/2015 08:00 AM House COMMUNITY & REGIONAL AFFAIRS


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08:01:20 AM Start
08:03:40 AM Municipal Regulation of Marijuana Presentations
09:50:49 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Municipal Regulation of Marijuana: TELECONFERENCED
- Matanuska-Susitna Borough - Mayor Larry
DeVilbiss & Assemblyman Jim Sykes
- Municipality of Anchorage - Municipal Attorney
Dennis Wheeler & Assemblyman Ernie Hall
-- Testimony <Invitation Only> --
                    ALASKA STATE LEGISLATURE                                                                                  
    HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE                                                                   
                        February 3, 2015                                                                                        
                           8:01 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Cathy Tilton, Chair                                                                                              
Representative Paul Seaton, Vice Chair                                                                                          
Representative Shelley Hughes                                                                                                   
Representative Benjamin Nageak                                                                                                  
Representative Lora Reinbold                                                                                                    
Representative Harriet Drummond                                                                                                 
Representative Dan Ortiz                                                                                                        
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
MUNICIPAL REGULATION OF MARIJUANA PRESENTATIONS                                                                                 
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
HEATH HILYARD, Staff                                                                                                            
Representative Tilton                                                                                                           
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Provided remarks regarding the municipal                                                                 
regulation of marijuana.                                                                                                        
                                                                                                                                
LARRY DEVILBISS, Mayor                                                                                                          
Matanuska-Susitna Borough                                                                                                       
Palmer, Alaska                                                                                                                  
POSITION STATEMENT:  Provided comments regarding the municipal                                                                
regulation of marijuana.                                                                                                        
                                                                                                                                
NICHOLAS SPIROPOULOS, Borough Attorney                                                                                          
Matanuska-Susitna Borough                                                                                                       
Palmer, Alaska                                                                                                                  
POSITION STATEMENT:   Provided  comments regarding  the municipal                                                             
regulation of marijuana.                                                                                                        
                                                                                                                                
JIM SYKES, Member                                                                                                               
Matanuska-Susitna Borough Assembly                                                                                              
Matanuska-Susitna Borough                                                                                                       
Palmer, Alaska                                                                                                                  
POSITION STATEMENT:   Provided  comments regarding  the municipal                                                             
regulation of marijuana.                                                                                                        
                                                                                                                                
DELANA JOHNSON, Mayor                                                                                                           
City of Palmer                                                                                                                  
Palmer, Alaska                                                                                                                  
POSITION STATEMENT:   Offered  testimony regarding  the municipal                                                             
regulation of marijuana from the  perspective of a city within an                                                               
organized borough.                                                                                                              
                                                                                                                                
DENNIS WHEELER, Municipal Attorney                                                                                              
Municipality of Anchorage                                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   Provided  comments regarding  the municipal                                                             
regulation of marijuana.                                                                                                        
                                                                                                                                
ERNIE HALL, Member                                                                                                              
Anchorage Assembly                                                                                                              
Municipality of Anchorage                                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   Provided  comments regarding  the municipal                                                             
regulation of marijuana.                                                                                                        
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
8:01:20 AM                                                                                                                    
                                                                                                                                
CHAIR  CATHY  TILTON  called the  House  Community  and  Regional                                                             
Affairs  Standing  Committee  meeting   to  order  at  8:01  a.m.                                                               
Representatives  Drummond, Seaton,  Nageak, Reinbold,  Ortiz, and                                                               
Tilton were present at the  call to order.  Representative Hughes                                                               
arrived as the  meeting was in progress.  Also  in attendance was                                                               
Representative Millett.                                                                                                         
                                                                                                                                
^Municipal Regulation of Marijuana Presentations                                                                                
        Municipal Regulation of Marijuana Presentations                                                                     
                                                                                                                              
CHAIR TILTON announced  that the only order of  business would be                                                               
presentations regarding the municipal regulation of marijuana.                                                                  
                                                                                                                                
8:03:40 AM                                                                                                                    
                                                                                                                                
HEATH  HILYARD,   Staff,  Representative  Tilton,   Alaska  State                                                               
Legislature, informed  the committee  that prior to  this session                                                               
Representative Tilton was  in contact with a  number of municipal                                                               
officials who expressed that some  of the initiative language was                                                               
somewhat  vague or  unclear  regarding how  they  would have  the                                                               
ability   to   regulate  at   the   local   level.     Therefore,                                                               
Representative Tilton  introduced HB  75, which  he characterized                                                               
as largely placeholder  legislation.  The goal,  he explained, is                                                               
to  craft  legislation  that  is   responsive  to  the  testimony                                                               
received from stakeholders.  The  committee [over the course of a                                                               
few meetings] will  hear from five municipalities  and the Alaska                                                               
Municipal  League  (AML).   The  committee  will also  hear  from                                                               
representatives  from  the  Division   of  Community  &  Regional                                                               
Affairs  and the  executive director  of  the Alcoholic  Beverage                                                               
Control (ABC)  Board regarding  language in Title  4 that  may be                                                               
used as a basis to draft  legislation.  Mr. Hilyard noted that he                                                               
has been working with a  number of municipal attorneys throughout                                                               
the state that  have been providing background on the  issue.  He                                                               
expressed   the  intent   to   bring  before   the  committee   a                                                               
comprehensive committee  substitute to  HB 75 that  is responsive                                                               
to the testimony received.                                                                                                      
                                                                                                                                
8:06:42 AM                                                                                                                    
                                                                                                                                
LARRY  DEVILBISS,  Mayor,  Matanuska-Susitna  Borough,  began  by                                                               
highlighting  that   the  Matanuska-Susitna  Borough   has  three                                                               
incorporated  cities  within   the  municipality,  which  creates                                                               
challenges in terms of the marijuana regulations.                                                                               
                                                                                                                                
8:08:54 AM                                                                                                                    
                                                                                                                                
NICHOLAS   SPIROPOULOS,   Borough   Attorney,   Matanuska-Susitna                                                               
Borough, informed  the committee that Ballot  Initiative 2 failed                                                               
areawide in  the Matanuska-Susitna Borough, but  passed in Palmer                                                               
and Houston,  and failed in  Wasilla.   All the votes,  he noted,                                                               
were fairly close.                                                                                                              
                                                                                                                                
8:09:57 AM                                                                                                                    
                                                                                                                                
MAYOR DEVILBISS related  that shortly after the  vote, the mayors                                                               
in  [the borough]  gathered  to determine  how  to move  forward.                                                               
They immediately  realized there were issues  with Ballot Measure                                                               
2  that  needed to  be  resolved  at  the  state level  prior  to                                                               
beginning  [to address  the initiative  at the  municipal level].                                                               
Following  the meeting  of the  mayors, a  town hall  meeting was                                                               
held to take public testimony.   The issues brought forth through                                                               
the public testimony  were included in the  resolution, which was                                                               
forwarded to the committee.   He noted that the Matanuska-Susitna                                                               
Borough  Assembly formed  an advisory  committee  to continue  to                                                               
address  this  issue.   He  further  noted that  [the  Matanuska-                                                               
Susitna Borough  Assembly] met with Taylor  Bickford, Campaign to                                                               
Regulate  Marijuana Like  Alcohol, and  Bruce Schulte,  Coalition                                                               
for  Responsible Cannabis  Regulation, which  shared some  of the                                                               
same concerns.   Most  recently, there was  a meeting  with Lance                                                               
Kitterling,  Alaska  State  Trooper,  who had  recently  been  to                                                               
Arizona and could provide information  as to how the legalization                                                               
of  marijuana  was  progressing  in Arizona.    He  reminded  the                                                               
committee that the language of  Ballot Measure 2 was very similar                                                               
to that of Arizona's language.                                                                                                  
                                                                                                                                
8:13:33 AM                                                                                                                    
                                                                                                                                
MR.  SPIROPOULOS  explained  that  one  of  the  issues  for  the                                                               
Matanuska-Susitna  Borough   is  that  it's   not  a   home  rule                                                               
municipality but  rather a  second class  borough, a  general law                                                               
municipality, such  as Fairbanks,  Ketchikan, Kenai,  and Kodiak.                                                               
The Matanuska-Susitna Borough has  cities within its borough, and                                                               
therefore  for the  marijuana  regulations  the question  becomes                                                               
whether the  borough's powers extend  into the cities  within it,                                                               
an   areawide   power.     Although   the   law  specifies   that                                                               
municipalities can vote to ban  growing, processing, testing, and                                                               
selling of marijuana, further  clarification is necessary because                                                               
it's a  planning function.   In terms  of the  planning function,                                                               
the  concern  is  with  regard to  land  use  patterns,  impacts,                                                               
compatibility with surrounding areas,  and whether it fits within                                                               
the  comprehensive  plan.     He  pointed  out   that  there  are                                                               
regulations  at  the  local level  for  alcohol,  regarding  both                                                               
package  stores  and  liquor dispensaries.    In  the  Matanuska-                                                               
Susitna  Borough, a  conditional  use permit  is  required.   Mr.                                                               
Spiropoulos  directed attention  to the  third Whereas  clause of                                                               
Matanuska-Susitna  Borough Resolution  15-006, which  express the                                                               
need for  clarification regarding the powers  granted to boroughs                                                               
and cities within  those boroughs.  He then  highlighted that the                                                               
Matanuska-Susitna   Borough  is   a   strong   manager  form   of                                                               
government, and thus the manager  is the day-to-day administrator                                                               
unlike  Fairbanks and  Kenai.   He  related  that the  Matanuska-                                                               
Susitna  Borough  manager's  preference  is for  this  to  be  an                                                               
areawide power and  for the borough to work with  the cities.  He                                                               
then provided  the example of  the sale of fireworks  in Houston.                                                               
The sale of fireworks is a  non areawide power, and the situation                                                               
is one  in which Houston  allows the  sale of fireworks,  but the                                                               
surrounding areas do not.   Therefore, the 400,000 people between                                                               
Anchorage and the Matanuska-Susitna Borough  can go to Houston to                                                               
purchase fireworks [and  take them back to other  areas whey they                                                               
may be  illegal].  The  borough wants  to avoid such  a situation                                                               
with marijuana  and wants  to have some  coordination and  say in                                                               
what happens.   Although cities may be resistant  to [an areawide                                                               
power], he opined  that it could be worked out.   Mr. Spiropoulos                                                               
clarified  that  the   Matanuska-Susitna  Borough  prefers  [that                                                               
marijuana  regulation be  an  areawide power]  and  if not,  that                                                               
there be clarification at the legislative level.                                                                                
                                                                                                                                
8:17:13 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  NAGEAK inquired  as  to whether  each city  could                                                               
make its own rules within its city limits.                                                                                      
                                                                                                                                
MR. SPIROPOULOS  specified that the Matanuska-Susitna  Borough is                                                               
requesting  clarification on  that  matter as  the initiative  is                                                               
only  a broad  framework.   Specifically, he  inquired as  to the                                                               
outcome of  a situation in which  a city and the  borough, both a                                                               
local government, want to allow  limit, restrict, or prohibit the                                                               
growing,  processing, testing,  and  retail  differently for  the                                                               
same area.   When looking  at it as a  land use issue,  it's more                                                               
appropriately  an areawide  power,  he opined.   Mr.  Spiropoulos                                                               
stressed that in either case,  whether it's viewed as an areawide                                                               
or non areawide power, clarification is necessary.                                                                              
                                                                                                                                
8:18:56 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  asked, drawing a parallel  between alcohol                                                               
and marijuana,  whether Mr. Spiropoulos intends  for all boroughs                                                               
to have  the ability  to dictate  whether the  communities within                                                               
the borough are dry, wet, or damp.                                                                                              
                                                                                                                                
MR. SPIROPOULOS opined  that alcohol is somewhat  different as it                                                               
and  the  rules surrounding  it  have  long  been present.    The                                                               
numerical limits  are set  by state law,  while the  local option                                                               
goes before  voters.   The local  option for  marijuana, however,                                                               
does  not have  to go  before voters  as it  can be  done by  the                                                               
assembly.   In  the  Matanuska-Susitna  Borough, planning  powers                                                               
were delegated to the cities.   Therefore, so long as the cities'                                                               
plans  and  laws fit  within  the  overall borough  comprehensive                                                               
plan, the borough has delegated to  the cities the power to zone,                                                               
plan, and  set permits.  The  borough reserves the right  to take                                                               
actions  if something  in  the city  is  impacting major  traffic                                                               
patterns or  overall growth and  development.  He  reiterated the                                                               
need for  clarification in this area  whether through legislation                                                               
or the administrative board overseeing marijuana.                                                                               
                                                                                                                                
8:21:29 AM                                                                                                                    
                                                                                                                                
CHAIR  TILTON  reminded the  committee  that  it isn't  going  to                                                               
address the criminal aspect of  marijuana rather only with regard                                                               
to the local governing agencies.                                                                                                
                                                                                                                                
8:22:14 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  NAGEAK,  highlighting  that Alaska  has  had  the                                                               
personal use clause for marijuana  since the 1970s, asked whether                                                               
there will be any change in  terms of the possession limits under                                                               
the initiative.                                                                                                                 
                                                                                                                                
MR.  SPIROPOULOS related  his  understanding  that [the  existing                                                               
possession clause]  allows for the  possession of four  ounces of                                                               
marijuana in  the home, whereas the  initiative allows possession                                                               
of  one ounce  of marijuana  anywhere.   This  is a  new type  of                                                               
business, and  the focus for  the Matanuska-Susitna  Borough will                                                               
be in terms of land use and business districts.                                                                                 
                                                                                                                                
8:24:30 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE ORTIZ  inquired as  to whether the  commercial and                                                               
zoning  laws  vary  between the  communities  in  the  Matanuska-                                                               
Susitna Borough.   If  that is  the case,  then he  surmised that                                                               
each  community  could   have  its  own  rules   related  to  the                                                               
commercial activity of marijuana.                                                                                               
                                                                                                                                
MR. SPIROPOULOS agreed  that if the term local  government in the                                                               
initiative  means   cities  can   make  their  own   rules,  then                                                               
potentially  every city  in the  Matanuska-Susitna Borough  could                                                               
have  different rules  as well  as the  borough having  different                                                               
rules.   He opined that  the aforementioned  may not be  the best                                                               
path in  terms of  businesses, land  use patterns,  commerce, and                                                               
activity because  it could lead to  inconsistencies when crossing                                                               
borders.   He informed the  committee that  the Matanuska-Susitna                                                               
Borough has delegated  to the cities the power to  do their local                                                               
land use  and planning.   However, the  Matanuska-Susitna Borough                                                               
didn't  give the  power to  subdivide to  the cities,  it remains                                                               
with the  borough.   Furthermore, several  years ago  the borough                                                               
revoked the  cities' planning powers  for power plants  to ensure                                                               
that the  rules were  consistent as the  effects of  power plants                                                               
reach outside  of the cities.   Although the effects of  the sale                                                               
of  fireworks goes  well  beyond Houston,  the  borough can't  do                                                               
anything about it since it's a non areawide power.                                                                              
                                                                                                                                
8:26:58 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  ORTIZ  asked  whether  it  would  be  within  the                                                               
purview  of  the  state  to  develop  a  uniform  regulation  for                                                               
marijuana that  would apply [throughout the  state] regardless of                                                               
how an area is organized or not.                                                                                                
                                                                                                                                
MR.  SPIROPOULOS  explained  that the  unorganized  boroughs  are                                                               
generally governed  by the legislature,  and therefore  the rules                                                               
passed by  the legislature apply  there.  The  initiative clearly                                                               
specifies that  municipalities can prohibit, limit,  and regulate                                                               
numbers and  quantities, which is  what the legislature  would do                                                               
for the unorganized areas.  How  the rules reach into the general                                                               
law boroughs would be dependent  upon the legislature's rules, he                                                               
opined.    He  related  his  understanding  that  the  initiative                                                               
contemplated that  boroughs would retain some  authority to limit                                                               
or prohibit [activities], depending upon the regulations.                                                                       
                                                                                                                                
8:28:58 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HUGHES  asked if  consideration has been  given to                                                               
what  might  make  sense  for  the  division  of  powers  between                                                               
boroughs  and cities  for marijuana  if  the legislature  doesn't                                                               
have an appetite for boroughwide control.                                                                                       
                                                                                                                                
MR.  SPIROPOULOS reminded  the  members of  the mayors'  meetings                                                               
during which  there was the  opportunity to have a  dialogue with                                                               
their citizens  and city councils.   Therefore, the  dialogue has                                                               
started and  hopefully after clear  rules are established  by the                                                               
state, the [local governments] can work within those.                                                                           
                                                                                                                                
8:32:39 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NAGEAK questioned whether  the marijuana issue may                                                               
be an impetus  for unorganized boroughs to organize  so that they                                                               
don't fall under the state's control.                                                                                           
                                                                                                                                
MAYOR DEVILBISS agreed that this  issue could be an incentive for                                                               
an unorganized area to organize.                                                                                                
                                                                                                                                
8:34:36 AM                                                                                                                    
                                                                                                                                
MAYOR  DEVILBISS, continuing  his testimony,  expressed the  need                                                               
for  the state  to clarify  what  one ounce  of marijuana  means.                                                               
Strictly following the initiative  language, he surmised that one                                                               
ounce could include  an ounce of raw fiber or  an ounce of liquid                                                               
concentrate.   The  aforementioned is  the definition  in Arizona                                                               
and  it's  a  problem  because   one  dose  of  marijuana  is  10                                                               
milligrams  of  Tetrahydrocannabinol  (THC) while  one  ounce  of                                                               
liquid  concentrate is  28,300 grams  of  THC.   He related  that                                                               
discussions  with those  who promoted  the initiative  found that                                                               
the  initiative   promoters  agreed  the  aforementioned   is  an                                                               
unreasonable  range to  be included  in [the  definition] of  one                                                               
ounce of  marijuana.   Mayor DeVilbiss  then suggested  the state                                                               
prohibit  non  Alaska  produced marijuana  in  order  to  promote                                                               
Alaska agriculture  and business.   He pointed out that  there is                                                               
ambiguity with regard to the  per person definition, particularly                                                               
in terms of the personal use  allowance of one ounce of marijuana                                                               
and six plants.  He posed a  scenario in which six adults over 21                                                               
years  of  age live  in  one  residence  and questioned  how  the                                                               
[personal use  allowance] would be applied,  particularly if some                                                               
of those  residents work on  the North  Slope and are  absent for                                                               
chunks of time.                                                                                                                 
                                                                                                                                
8:37:15 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DRUMMOND inquired  as to whether there  is a limit                                                               
on  the amount  of alcohol  one living  in the  Matanuska-Susitna                                                               
Borough can possess in their home.                                                                                              
                                                                                                                                
MAYOR DEVILBISS replied no.                                                                                                     
                                                                                                                                
8:37:34 AM                                                                                                                    
                                                                                                                                
MAYOR  DEVILBISS  related that  although  users  have said  there                                                               
won't be a  problem with the per person rules,  he believes there                                                               
is  room for  abuse since  these  are living  plants rather  than                                                               
liquid.  He  then emphasized the need to  restrict packaging that                                                               
entices  minors.   The state  should  also differentiate  between                                                               
medicinal  and  recreational  marijuana and  industrial  hemp  in                                                               
terms  of  both definition  and  regulation.     Mayor  DeVilbiss                                                               
opined that taxes on the  different products should be different.                                                               
The  state,   he  further  suggested,  needs   to  offer  minimum                                                               
standards in  terms of contaminants  and potency  and appropriate                                                               
labeling.                                                                                                                       
                                                                                                                                
8:39:35 AM                                                                                                                    
                                                                                                                                
MR. SPIROPOULOS stressed  the need for a clear  definition of the                                                               
term  "public"  as the  consumption  of  marijuana in  public  is                                                               
prohibited.   He pointed out  that the  Matanuska-Susitna Borough                                                               
is a second class borough  that doesn't have a police department,                                                               
and  thus  doesn't perform  criminal  law  enforcement.   If  the                                                               
definition is going to be  promulgated through an agency, the ABC                                                               
Board has  a definition of "public"  for purposes of this  law on                                                               
its web site.   Mr. Spiropolous requested  the legislature ensure                                                               
that  agency has  the authority  to define  the language  because                                                               
that  isn't  entirely   clear  at  this  point.     However,  the                                                               
Matanuska-Susitna  Borough  would  prefer  that  the  legislature                                                               
define the term "public."                                                                                                       
                                                                                                                                
8:41:38 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  NAGEAK  expressed  concern with  controlling  the                                                               
contaminants  in marijuana  as well  as marijuana  that is  laced                                                               
with other drugs.                                                                                                               
                                                                                                                                
MAYOR  DEVILBISS suggested  that  the  contaminants in  marijuana                                                               
could be addressed in the same  manner as with food products such                                                               
that  a  minimum  level  of  contaminants  are  allowed  or  some                                                               
contaminants are  disallowed.  He related  his understanding that                                                               
Colorado   has  addressed   contaminants   after   the  fact   by                                                               
prohibiting the use  of butane as an extraction medium  as it's a                                                               
source of explosions.                                                                                                           
                                                                                                                                
8:43:46 AM                                                                                                                    
                                                                                                                                
JIM   SYKES,   Member,    Matanuska-Susitna   Borough   Assembly,                                                               
Matanuska-Susitna Borough,  expressed hope that Alaska  can learn                                                               
from  the other  states who  have legalized  marijuana.   To that                                                               
end, Mr.  Sykes highlighted  Eagle County,  Colorado, which  is a                                                               
rural   community  with   highly   populated   areas  and   rural                                                               
unpopulated areas similar  [to Alaska].  With  regard to comments                                                               
that  the industry  needs to  be  small, home  grown, and  Alaska                                                               
based, he related  his understanding that there is  the desire to                                                               
have a vertically integrated business  in which there is growing,                                                               
manufacturing, processing,  and sales in one  location.  Although                                                               
the aforementioned may make sense  for a very small business, the                                                               
vertical  integration that  allows an  industrial corporation  to                                                               
enter the market  would be a different matter.    He then related                                                               
the  need  to  establish  regulations sooner  rather  than  later                                                               
because the longer it takes  to establish regulations, the longer                                                               
the  black  market will  continue.    Mr.  Sykes noted  that  the                                                               
committee will be  provided with an audio file  and transcript of                                                               
the public comments to the  [Matanuska-Susitna Borough].  He then                                                               
directed  attention to  the membership  of the  Matanuska-Susitna                                                               
Borough's  proposed Marijuana  Advisory Committee,  as listed  in                                                               
Resolution 15-007.  In closing,  Mr. Sykes said he looked forward                                                               
to  working  with the  legislature  and  having  a good  flow  of                                                               
information.                                                                                                                    
                                                                                                                                
8:48:30 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DRUMMOND  related that  after she and  her husband                                                               
visited  marijuana  dispensaries   in  Seattle,  Washington,  she                                                               
surmised that the  largest problem is going to be  the cash basis                                                               
of these  systems.  Because  marijuana is illegal at  the federal                                                               
level,  these businesses  operate on  a cash  basis.   Washington                                                               
marijuana dispensaries  all use  the same sophisticated  point of                                                               
sale  (POS) system  through  which the  State  of Washington  can                                                               
enter for review.  There is  no [private information] in terms of                                                               
customer names  because it's  a cash  system that  doesn't accept                                                               
credit  cards  or  checks.    In  Alaska,  where  63  percent  of                                                               
residents carry guns, a cash-based system needs to be addressed.                                                                
                                                                                                                                
MAYOR  DEVILBISS   pointed  out   that  the   Marijuana  Advisory                                                               
Committee  includes  a member  from  the  financial community  in                                                               
order  to  address  that  perspective.   However,  since  it's  a                                                               
federal  problem,  the issue  isn't  included  in the  resolution                                                               
because he wasn't sure the state could solve that problem.                                                                      
                                                                                                                                
MR. SYKES informed  the committee that during  discussions on the                                                               
banking aspect,  he learned there are  two state-chartered credit                                                               
unions  in   Washington  that  only  do   in-state  business  and                                                               
contemplate using  a two-step  process [with  marijuana revenue].                                                               
North Dakota  has its  own sovereign bank,  which he  didn't know                                                               
what that  means.  There  is at least one  state-chartered credit                                                               
union in  Alaska that  may or may  not be an  answer.   Mr. Sykes                                                               
noted his agreement that this aspect needs to be addressed.                                                                     
                                                                                                                                
8:51:51 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DRUMMOND  described  the dispensaries  as  having                                                               
heavy metal doors that were pulled  down in front of the windows.                                                               
Although   the   dispensaries   were   not   in   a   ghetto-like                                                               
neighborhood, it  looked as  if it was  in a  ghetto neighborhood                                                               
that  needed to  arm  itself.   The  surrounding businesses  were                                                               
normal looking  without all the visible  [heavy security measures                                                               
of the  marijuana dispensaries].   She attributed the  cash basis                                                               
of  the  marijuana dispensaries  as  the  reason for  them  being                                                               
heavily  armed.     She  further   related  that   the  marijuana                                                               
dispensary employees are paid in cash.                                                                                          
                                                                                                                                
8:52:55 AM                                                                                                                    
                                                                                                                                
MAYOR DEVILBISS,  in response to  Chair Tilton, related  that the                                                               
bulk of  the testimony  [the Matanuska-Susitna  Borough Assembly]                                                               
received  was  for the  creation  of  a  separate board  for  the                                                               
regulation and control of marijuana.                                                                                            
                                                                                                                                
8:54:14 AM                                                                                                                    
                                                                                                                                
MAYOR  DEVILBISS, concluding  his testimony,  expressed the  need                                                               
for the  state to clarify whether  the farm use tax  exemption is                                                               
to  include  the   growth  and  production  of   marijuana.    He                                                               
recommended that taxation  on the state level  be for prevention,                                                               
treatment,  testing,   enforcement,  and   security.     He  then                                                               
emphasized  the need  for the  state to  establish rules  for the                                                               
unorganized borough as it would  impact the borough.  Since other                                                               
states have found infused edible  products to be problematic, the                                                               
state  regulations  should  clearly   address  the  matter.    He                                                               
reiterated earlier  testimony relating that the  preponderance of                                                               
testimony the Matanuska-Susitna  Borough Assembly heard requested                                                               
an unlimited  number of  small vertically  integrated operations,                                                               
for which  the assembly asked.   The aforementioned is  the model                                                               
that works best for agriculture in  Alaska.  He related there was                                                               
general agreement  that public  advertising shouldn't  be allowed                                                               
if  marijuana  is  being  treated  like  pornography.    He  then                                                               
requested  the state  establish  business hours  [if the  borough                                                               
cannot].  Mayor  DeVilbiss informed the committee  that there was                                                               
the suggestion  for the  state to  consider allowing  permits for                                                               
cultivation facilities four months prior  to retail sales.  Mayor                                                               
DeVilbiss  emphasized that  [the borough]  hasn't even  discussed                                                               
commercialization of marijuana  as it wants to  see the landscape                                                               
prior to any decisions regard commercialization.                                                                                
                                                                                                                                
8:57:45 AM                                                                                                                    
                                                                                                                                
MR.  SPIROPOULOS highlighted  the need  to consider  the Landlord                                                               
Tenant Act and whether a landlord  can tell a tenant he/she can't                                                               
possess marijuana in the rental.   He then reminded the committee                                                               
that  the  initiative  was  put   forth  as  marijuana  would  be                                                               
regulated like alcohol.  However,  there are severe limits on the                                                               
ability to tax  alcohol at the local level such  that alcohol can                                                               
only  be  taxed by  a  sales  tax that  matches  the  rate.   The                                                               
Matanuska-Susitna  Borough, he  related, would  like to  preserve                                                               
all  the local  options for  taxation.   The assembly  could then                                                               
decide  how  to  allocate  those   tax  funds  for  education  or                                                               
treatment.     As  the  legislature  considers   definitions,  he                                                               
encouraged  the committee  to  define  "assist," particularly  in                                                               
terms  of business  transporters who  "assist" various  customers                                                               
and thus are in possession of more than one ounce of marijuana.                                                                 
                                                                                                                                
9:00:00 AM                                                                                                                    
                                                                                                                                
MR.   SPIROPOULOS,  in   response  to   Representative  Drummond,                                                               
explained that there is a state  law specifying that the only tax                                                               
that can be levied  on alcohol is a sales tax.   There is also an                                                               
Alaska Supreme Court ruling that  the sales tax rate [on alcohol]                                                               
must match  the other  sales tax  rate.   In further  response to                                                               
Representative  Drummond, Mr.  Spiropoulos specified  that cities                                                               
within the Matanuska-Susitna Borough each  have a sales tax while                                                               
the borough  has a bed  tax of 5  percent that is  considered the                                                               
sales tax for purposes of taxing alcohol.                                                                                       
                                                                                                                                
REPRESENTATIVE  DRUMMOND  surmised   then  that  Anchorage's  tax                                                               
structure is  different since  a recent increase  in the  bed tax                                                               
was dedicated  to the construction  of a convention center.   All                                                               
of  the  sales taxes  in  Anchorage  must  be placed  before  the                                                               
voters, she noted.                                                                                                              
                                                                                                                                
9:01:50 AM                                                                                                                    
                                                                                                                                
MR. SYKES informed  the committee that those  who are considering                                                               
business  models to  grow marijuana  have encouraged  not setting                                                               
the tax rate too high because  it could continue the influence of                                                               
the black market.  There was  also the suggestion that if another                                                               
medical marijuana section of the law  is created, the tax rate on                                                               
it should be addressed because  in other states medical marijuana                                                               
use  rose since  it  was  cheaper.   The  expected  need to  fund                                                               
regulations, inspections, enforcement,  education, public health,                                                               
and  other aspects  of marijuana  are upfront  costs.   Since the                                                               
state doesn't  allow dedicated funds,  he suggested  that perhaps                                                               
licensing regulations  can address paying for  services the state                                                               
and local governments  need to provide to implement the  law.  He                                                               
noted that  Colorado has had  some success  in that area.   While                                                               
there is differing  opinion as to whether to limit  the number of                                                               
licenses, there  is widespread agreement that  licenses shouldn't                                                               
become an  economic asset like  liquor licenses.   In conclusion,                                                               
he  told   the  committee  that   the  State  of   Washington  is                                                               
instituting   an    evaluation   process   that    monitors   the                                                               
effectiveness of  the laws  they are creating.   He  further told                                                               
the committee that  Colorado reported decreases in  some areas of                                                               
crime, but increases in medical responses.                                                                                      
                                                                                                                                
9:04:26 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NAGEAK expressed concern  with airport security in                                                               
Alaska  and questioned  what happens  if a  traveler is  found in                                                               
possession marijuana, which is federally prohibited.                                                                            
                                                                                                                                
MR. SYKES said he didn't know what would happen.                                                                                
                                                                                                                                
MR. SPIROPOULOS interjected that a lot  of that will be driven by                                                               
federal  policymakers,   the  U.S.  attorney  general,   and  the                                                               
secretary  of Homeland  Security.   He related  his understanding                                                               
that   U.S.   Attorney  General   Holder   has   said  he   won't                                                               
substantially  interfere  with  the  legal  operations  in  those                                                               
states that  have legalized  marijuana.   However, banks  and air                                                               
carriers  aren't willing  to risk  their charters.   The  current                                                               
nominee  for  the  U.S.  Attorney  General,  Loretta  Lynch,  has                                                               
testified in opposition to the legalization of marijuana.                                                                       
                                                                                                                                
9:07:59 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON noted  that  the House  Health and  Social                                                               
Services  Standing  Committee is  hearing  HB  59 that  addresses                                                               
health  and social  services issues,  including mixing  marijuana                                                               
with other drugs.                                                                                                               
                                                                                                                                
9:08:46 AM                                                                                                                    
                                                                                                                                
DELANA  JOHNSON,  Mayor,  City   of  Palmer,  speaking  from  the                                                               
perspective of a  city within an organized  borough, informed the                                                               
committee  that  cities  have   police  powers.    Mayor  Johnson                                                               
emphasized   the   importance   of  self-determination   of   the                                                               
communities, which she  opined is the intent of  the reference to                                                               
local government  in the initiative.   She then pointed  out that                                                               
cities  have  health powers  within  public  spaces in  terms  of                                                               
smoking, vaping,  and other methods  of inhalation and  those are                                                               
already  covered in  city code.   Therefore,  she encouraged  the                                                               
committee  not  to  allow  the   borough  to  change  the  city's                                                               
regulations that are already in place.                                                                                          
                                                                                                                                
9:11:56 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NAGEAK  noted that  he had received  concerns with                                                               
regard to  the municipality overriding what  the local government                                                               
[city/village] had voted in terms of legalization of marijuana.                                                                 
                                                                                                                                
MAYOR  JOHNSON  recalled that  Palmer  voted  in support  of  the                                                               
legalization  of marijuana  while most  of the  borough did  not.                                                               
Mayor  Johnson   cautioned  against  broad   stroke  regulations,                                                               
particularly  for  the  cities.   The  cities  do  have  planning                                                               
powers.   In  fact, Palmer  had planning  and zoning  powers long                                                               
before statehood.   She opined  that no  one outside of  the city                                                               
council and planning  and zoning understand where  sales might be                                                               
intrusive  and  what  marketing   should  look  like.    Speaking                                                               
personally,  she  agreed with  the  notion  of not  allowing  the                                                               
marketing of  marijuana just  anywhere.   She expressed  the need                                                               
for cities  to have the choice  with regard to marijuana.   Mayor                                                               
Johnson  opined that  a  separate board  [for  the regulation  of                                                               
marijuana] is essential.  She  pointed out that since cities have                                                               
police powers  and boroughs  do not, the  finances of  the cities                                                               
will be impacted.   Ultimately, no one knows a  community as well                                                               
as those local residents.                                                                                                       
                                                                                                                                
9:15:36 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  NAGEAK  informed  the committee  that  the  North                                                               
Slope Borough has a boroughwide police force.                                                                                   
                                                                                                                                
MAYOR   JOHNSON  pointed   out  that   Anchorage  is   a  unified                                                               
municipality and  thus has both  city and borough powers  as does                                                               
Sitka  and Juneau.   She  related her  understanding that  police                                                               
powers  are  generally designated  to  cities,  which she  opined                                                               
would be helpful for whomever  is making decisions at the borough                                                               
level.                                                                                                                          
                                                                                                                                
REPRESENTATIVE NAGEAK  related that  the only powers  cities have                                                               
in the North Slope Borough are boats, parks, and cemeteries.                                                                    
                                                                                                                                
MAYOR JOHNSON  remarked that the City  of Palmer has a  number of                                                               
powers, including  planning powers delegated  to the city  by the                                                               
borough.   She emphasized the importance  of local determination,                                                               
particularly  since  it's difficult  to  address  the details  of                                                               
various communities from a 10,000 foot level.                                                                                   
                                                                                                                                
9:18:35 AM                                                                                                                    
                                                                                                                                
DENNIS  WHEELER, Municipal  Attorney, Municipality  of Anchorage,                                                               
identified the need  to define "public" and  "consume in public".                                                               
The  Municipality of  Anchorage recently  passed an  ordinance to                                                               
address the aforementioned because  the assumption is that people                                                               
will  begin  to  consume  on  February  24,  2015.    Anchorage's                                                               
ordinance copied  the criminal code  definition from  the state's                                                               
criminal  code  with  an  exception  for  those  things  properly                                                               
permitted  or licensed  per state  or  municipal code.   He  then                                                               
expressed the  need to define  the terms  "marijuana concentrate"                                                               
and "marijuana products."  With  regard to the issues surrounding                                                               
the  number  of plants  per  person  per household,  Mr.  Wheeler                                                               
related his understanding that in  Colorado the medical marijuana                                                               
[possession]   limits  were   combined   with  the   recreational                                                               
marijuana  [possession] limits,  which  resulted  in a  loophole.                                                               
Additionally, the  tax rate for  medical marijuana  was different                                                               
than  that for  recreational marijuana.   Therefore,  individuals                                                               
could have  more marijuana plants  than they anticipated  and the                                                               
use of  medical marijuana increased significantly  because of the                                                               
significant  price difference.    The aforementioned  is why  the                                                               
existing medical marijuana  statutes will have to  be reviewed as                                                               
well.   He then expressed  concern with a  cohabitation situation                                                               
in  which multiple  individuals have  multiple plants  that could                                                               
reach the level of a grow  operation.  Another area of concern is                                                               
the term  "display" and  what it  means to  display one  ounce of                                                               
marijuana.   He noted that  there is a provision  specifying that                                                               
marijuana plants  can't be grown within  public view.  If  one is                                                               
allowed to display  marijuana, it would seem  that open exchanges                                                               
of marijuana  in public  places could  occur, he  surmised, which                                                               
would need to be addressed.                                                                                                     
                                                                                                                                
9:23:13 AM                                                                                                                    
                                                                                                                                
MR.  WHEELER then  turned to  the home  processing of  marijuana,                                                               
particularly  the  use  of  flammable  gases.    He  related  his                                                               
understanding  that there  were  about 30  house fires  resulting                                                               
from  individuals  trying  to  use   this  method  of  processing                                                               
marijuana   on   their   kitchen   stove.      To   address   the                                                               
aforementioned, the  Municipality of Anchorage is  introducing an                                                               
ordinance to ban [butane processing]  locally.  He then expressed                                                               
concern   with   regard   to  open   containers   of   marijuana,                                                               
particularly within  a vehicle.   He suggested that  perhaps open                                                               
marijuana  containers would  have to  be  out of  arm's reach  of                                                               
those in  the vehicle.  Mr.  Wheeler then related the  need for a                                                               
public  education  campaign,  such  as Colorado's  Good  to  Know                                                               
campaign, so  that people understand  the rules.  With  regard to                                                               
statewide data collection, he acknowledged  that there would be a                                                               
cost but  there needs  to be  some method  of data  collection in                                                               
order to understand  what is and is not working  well.  In regard                                                               
to taxation,  he reiterated  the concern  with regard  to pushing                                                               
people toward medical marijuana use  as was the case in Colorado.                                                               
Furthermore,  when   regulations  are   layered  an   expense  is                                                               
associated  with that  and  increases the  cost  of the  product,                                                               
which drives  the black market.   The black market  for marijuana                                                               
in  Colorado  is thriving.    In  fact,  two states  adjacent  to                                                               
Colorado have  sued Colorado because  of the amount  of marijuana                                                               
transported out  of Colorado and  into those states.   Therefore,                                                               
it's a balancing act between  the regulations, the costs, and the                                                               
black  market.     Mr.  Wheeler   then  turned  to   the  concern                                                               
surrounding  edibles, including  the amount  of THC,  the serving                                                               
size, packaging, testing, and work  environment.  With respect to                                                               
licensing,  Colorado  has  a two-year  residency  requirement  in                                                               
order to obtain a business  license.  Although Mr. Wheeler wasn't                                                               
sure  Alaska could  impose a  two-year residency  requirement, he                                                               
felt there  is merit in  [a residency requirement] if  the desire                                                               
is to create a home grown environment.                                                                                          
                                                                                                                                
9:28:35 AM                                                                                                                    
                                                                                                                                
MR. WHEELER then  turned to the question as  to whether marijuana                                                               
should have  its own control  board.  He  opined that there  is a                                                               
need  for  some state  level  centralized  authority.   Generally                                                               
speaking, the ABC  Board model works well,  particularly since it                                                               
allows  a local  government to  protest the  issuance of  a state                                                               
level  license.   He said  he has  heard discussions  about using                                                               
some of the same ABC Board  staff to support the marijuana board,                                                               
which  may have  some merit  as those  existing staff  would have                                                               
experience investigating  individual cases,  reviewing individual                                                               
licenses, and processing  [licenses].  Using the  ABC Board model                                                               
for a marijuana  board would be of particular merit  if the model                                                               
for  marijuana incorporates  similar  concepts  from the  alcohol                                                               
model.   With  regard  to  the notion  of  having local  advisory                                                               
boards,  Mr. Wheeler  pointed out  that in  the Matanuska-Susitna                                                               
Valley that  would place quite  a demand on resources  whether it                                                               
was one local  advisory board on one in  each local jurisdiction,                                                               
all  the cities  and  the  borough.   He  opined  that it's  very                                                               
difficult  to consistently  staff advisory  boards and  there are                                                               
costs  associated  with providing  support  staff.   Because  the                                                               
assembly or  city council  is very  accessible in  the Matanuska-                                                               
Susitna  Valley,  he  wasn't  convinced   an  advisory  board  is                                                               
necessary.  Therefore,  he said he was more  comfortable with the                                                               
city council  or city assembly  addressing issues as  they arise.                                                               
Mr.  Wheeler said  that he  concurred with  today's testimony  as                                                               
well  as  the comments  submitted  in  the Fairbanks  North  Star                                                               
Borough  letter,  particularly  with respect  to  consumption  in                                                               
private clubs  and local  government control  in terms  of zoning                                                               
and land use.   The Municipality of Anchorage has  local land use                                                               
powers and with  respect to alcohol has a  conditional use permit                                                               
process  in which  every alcohol  license provided  by the  state                                                               
must be  accompanied by a  local conditional use permit  that has                                                               
been approved by  the assembly.  The Anchorage  Assembly can deny                                                               
the  conditional  use permit  after  reviewing  how a  particular                                                               
establishment   fits  in   a   particular   neighborhood.     The                                                               
Municipality  of Anchorage,  he said,  would like  to retain  its                                                               
power with respect to conditional use permits.                                                                                  
                                                                                                                                
9:32:46 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON inquired as  to whether the conditional use                                                               
permit  requirement is  through the  local option  or a  specific                                                               
state statute for alcohol licenses.                                                                                             
                                                                                                                                
MR.  WHEELER  answered that  it's  part  of  Title 29  for  local                                                               
government  land  use  powers.    He  explained  that  there  are                                                               
conditional  use permit  processes  for all  types  of land  use,                                                               
alcohol just happens to one of them.                                                                                            
                                                                                                                                
REPRESENTATIVE  SEATON surmised  then that  if the  state doesn't                                                               
prohibit that Title  29 power, the local  government would retain                                                               
it.                                                                                                                             
                                                                                                                                
MR. WHEELER  replied yes,  in so much  as the  initiative doesn't                                                               
explicitly  prohibit the  exercise of  the power.   However,  Mr.                                                               
Wheeler  said  he prefers  [language]  that  is more  direct  and                                                               
explicit  such   that  local   government  planning   powers  are                                                               
retained.                                                                                                                       
                                                                                                                                
9:34:07 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  REINBOLD  asked  if Anchorage  has  reviewed  the                                                               
various  fines in  Chapter  38 and  determined  whether they  are                                                               
reasonable or not.                                                                                                              
                                                                                                                                
MR.  WHEELER explained  that when  the Municipality  of Anchorage                                                               
adopted a definition of public  place in its ordinance, the state                                                               
fine  provisions  were  also incorporated.    Therefore,  someone                                                               
caught consuming  marijuana in a  public place would face  a $100                                                               
citation.  Mr.  Wheeler didn't recall the  assembly commenting on                                                               
whether  that fine  [schedule] is  high  enough or  too high  but                                                               
rather would follow  it and determine how it works.   Although he                                                               
suspected that the  $100 citation may not be high  enough to keep                                                               
people  from consuming  in public,  he wasn't  sure there  is the                                                               
latitude to increase the fine.                                                                                                  
                                                                                                                                
9:36:19 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  REINBOLD expressed  the  need  to maintain  local                                                               
control, particularly in terms of Section 3, which read:                                                                        
                                                                                                                                
     The  provisions   of  this  Act  are   independent  and                                                                    
     severable,  and, except  where  otherwise indicated  in                                                                    
     text,  shall  supersede   conflicting  statutes,  local                                                                    
     charter, ordinance, or resolution,  and other state and                                                                    
     local provisions.   If  any provision  of this  Act, or                                                                    
     the application thereof to  any person or circumstance,                                                                    
     is  found  to  be   invalid  or  unconstitutional,  the                                                                    
     remainder of this  Act shall not be  affected and shall                                                                    
     be given effect to the fullest extent possible.                                                                            
                                                                                                                                
MR. WHEELER  confirmed that he  is aware  of Section 3  and added                                                               
that it's not  uncommon language.  He said  that the municipality                                                               
doesn't want to create conflict  that invites litigation.  Still,                                                               
the municipality, to the extent  possible, wants to exercise some                                                               
local  control  or  control  either  through  the  recommendation                                                               
process that  is used  for alcohol licensing  or the  ability for                                                               
the  municipality to  enact its  own provisions  not inconsistent                                                               
with the initiative.                                                                                                            
                                                                                                                                
9:38:20 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   DRUMMOND,  noting   that  many   of  Anchorage's                                                               
conditional use  permit files  have been  lost, opined  that this                                                               
will  provide  Anchorage the  opportunity  to  track all  of  its                                                               
conditional use permits.   She also reiterated  her concerns with                                                               
regard to the cash basis of the marijuana industry.                                                                             
                                                                                                                                
MR. WHEELER  related his understanding that  Colorado experienced                                                               
an increase in  crime related to the cash basis  of the marijuana                                                               
industry  and is  working with  state-chartered credit  unions to                                                               
address  the  reluctance  of  the   banking  industry  to  become                                                               
involved with  the marijuana  industry.   He then  mentioned that                                                               
armored   car  carriers   initially   wouldn't  serve   marijuana                                                               
dispensaries,  but  now are  coming  around  to  the idea.    Mr.                                                               
Wheeler agreed with [Representative  Drummond's concern] and said                                                               
he didn't  know how to  address it since  [the cash basis  of the                                                               
marijuana industry]  is due to  the concern with the  federal law                                                               
and their  ability to operate.   A further chilling  effect could                                                               
result from  the new  U.S. Attorney  General's comments  that she                                                               
isn't in  favor of  the legalization of  marijuana.   Although he                                                               
said he didn't know how these  concerns could be addressed at the                                                               
local  level, he  did specify  that in  terms of  land use  there                                                               
would be concerns  with regard to security,  lighting, and secure                                                               
doors.     However,  the  aforementioned  doesn't   address  when                                                               
consumers,  employees, or  the owner  of the  establishment leave                                                               
the  establishment.    The  aforementioned may  be  a  reason  to                                                               
consider  where marijuana  [dispensaries]  should  be located  to                                                               
reduce the chances of the aforementioned crimes.                                                                                
                                                                                                                                
REPRESENTATIVE  DRUMMOND   opined  that   it  will   behoove  the                                                               
legislature  to pay  close  attention  to the  cash  side of  the                                                               
marijuana industry,  including the tax payments  that will likely                                                               
also be made in cash.                                                                                                           
                                                                                                                                
9:41:35 AM                                                                                                                    
                                                                                                                                
ERNIE   HALL,  Member,   Anchorage   Assembly,  Municipality   of                                                               
Anchorage,  informed  the  committee  that  the  Municipality  of                                                               
Anchorage will continue  to follow the leadership  of Mr. Wheeler                                                               
and the municipality's legal department  as they continue to do a                                                               
good job  raising red flags.   He recalled when  the municipality                                                               
was  considering  opting-out there  was  a  tremendous amount  of                                                               
testimony  that  the  municipality   would  be  able  to  develop                                                               
regulations  and  collect a  lot  of  tax  revenue to  solve  the                                                               
state's fiscal gap.  However, once the decision was made to opt-                                                                
in, the  messages almost  immediately changed  to one  saying the                                                               
initiative  language  shouldn't  be   changed  since  the  public                                                               
approved it as it is and the  taxes should be kept low enough for                                                               
[businesses]  to  operate.   Therefore,  the  local  assembly  is                                                               
looking  to the  state to  do  a good  job and  handle the  heavy                                                               
lifting  in   terms  of   establishing  a   good  set   of  state                                                               
regulations.   He  then pointed  out that  the marijuana  statute                                                               
doesn't refer  to a  license but rather  says "register  with the                                                               
state".   He  expressed  concern  with regard  to  the number  of                                                               
licenses that will  be issued and the process for  licensure.  He                                                               
said he  considered Mr.  Wheeler's earlier  comment about  a two-                                                               
year residency  requirement as appropriate.   Mr.  Hall indicated                                                               
[his agreement]  with an  earlier suggestion  that people  not be                                                               
allowed  to actually  own [a  marijuana  dispensary] license  and                                                               
thus avoid  financial value  accruing to the  license.   There is                                                               
already  an   issue  with  this   with  liquor  licenses.     The                                                               
Municipality  of   Anchorage,  he   related,  is   interested  in                                                               
continuing to  use its land  use and conditional use  [powers] as                                                               
that's how the  municipality was able to interject  itself in the                                                               
alcohol process.     He emphasized the need  for everyone to play                                                               
by the same  rules, which is why the vast  majority of [rules and                                                               
regulations  for  marijuana] should  be  addressed  at the  state                                                               
level in order to avoid  local level confusion while allowing the                                                               
local governments discretion only  with the local conditional use                                                               
permits.   In  closing,  Mr. Hall  said he  didn't  envy the  job                                                               
before  the legislature,  but opined  that Cynthia  Franklin with                                                               
the ABC  Board is  definitely an  asset.   He then  expressed his                                                               
desire  to  have any  regulations  put  forth  by the  ABC  Board                                                               
approved by the legislature prior to their implementation.                                                                      
                                                                                                                                
9:48:22 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  highlighted the need for  the committee to                                                               
discuss the  definition of marijuana  in the law, which  seems to                                                               
exclude fiber and  such things when growing hemp.   The question,                                                               
he  opined, is  whether hemp  without  THC will  be regulated  as                                                               
marijuana or  not as it  could have  some impacts with  this dual                                                               
definition of what is and is not marijuana.                                                                                     
                                                                                                                                
9:49:54 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DRUMMOND  noted  that the  testing  issue  wasn't                                                               
addressed today,  which she attributed  to the fact that  it will                                                               
likely be heard in the  House Health and Social Services Standing                                                               
Committee in terms of definitions and amounts.                                                                                  
                                                                                                                                
9:50:49 AM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Community  and Regional  Affairs Standing  Committee meeting  was                                                               
adjourned at 9:50 a.m.                                                                                                          

Document Name Date/Time Subjects
News Articles, Marijuana and municipalities.pdf HCRA 2/3/2015 8:00:00 AM
Municipal regulation of marijuana
Ballot Measure2, text.pdf HCRA 2/3/2015 8:00:00 AM
Text of Ballot Measure 2
2015-09, FNSB Draft Ordinance.pdf HCRA 2/3/2015 8:00:00 AM
Draft Ordinance, Fairbanks North Star Borough
O2015-02, KPB Draft Ordinance.pdf HCRA 2/3/2015 8:00:00 AM
Draft Ordinance, Kenai Peninsula Borough
MatSuBoroughRes15-006.pdf HCRA 2/3/2015 8:00:00 AM
MatSu Borough, Resolution 6
MatSuBoroughRes15-007.pdf HCRA 2/3/2015 8:00:00 AM
MatSu Borough, Resolution 7
MunicipalAttorneysLegalMemo, 01262015.pdf HCRA 2/3/2015 8:00:00 AM
Legal Memorandum
FNSBLegalMemo, 01302015.pdf HCRA 2/3/2015 8:00:00 AM
Faribanks North Star Borough Legal Memorandum