Legislature(2015 - 2016)BUTROVICH 205
01/27/2015 09:00 AM Senate STATE AFFAIRS
| Audio | Topic |
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| Start | |
| Presentation by Executive Branch Representatives: Marijuana Ballot Measure - Discussion of Implementation / Administration Perspective | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
SENATE STATE AFFAIRS STANDING COMMITTEE
January 27, 2015
9:02 a.m.
MEMBERS PRESENT
Senator Bill Stoltze, Chair
Senator John Coghill, Vice Chair
Senator Charlie Huggins
Senator Lesil McGuire
Senator Bill Wielechowski
COMMITTEE CALENDAR
PRESENTATION BY EXECUTIVE BRANCH REPRESENTATIVES: MARIJUANA
BALLOT MEASURE - DISCUSSION OF IMPLEMENTATION / ADMINISTRATION
PERSPECTIVE
- HEARD
PREVIOUS COMMITTEE ACTION
See Senate State Affairs minutes from 1/22/15.
WITNESS REGISTER
HARRIET MILKS, Assistant Attorney General
Civil Division
Alaska Department of Law
Juneau, Alaska
POSITION STATEMENT: Provided departmental insight and
recommendations on the marijuana ballot measure.
KACI SCHROEDER, Assistant Attorney General
Criminal Division
Alaska Department of Law
Juneau, Alaska
POSITION STATEMENT: Provided departmental insight and
recommendations on the marijuana ballot measure.
MIKE LESSMAN, Legislative Liaison
Alaska Department of Public Safety
Anchorage, Alaska
POSITION STATEMENT: Provided departmental insight and
recommendations on the marijuana ballot measure.
MAJOR DENNIS CASANOVAS, Deputy Director
Division of Alaska State Troopers
Alaska Department of Public Safety
Anchorage, Alaska.
POSITION STATEMENT: Provided departmental insight and
recommendations on the marijuana ballot measure.
JERRY BURNETT, Deputy Commissioner
Alaska Department of Revenue
Juneau, Alaska
POSITION STATEMENT: Provided departmental insight and
recommendations on the marijuana ballot measure.
KEN ALPER, Director
Tax Division
Alaska Department of Revenue
Juneau, Alaska
POSITION STATEMENT: Provided departmental insight and
recommendations on the marijuana ballot measure.
BRANDON SPANOS, Deputy Director
Tax Division
Alaska Department of Revenue
Anchorage, Alaska,
POSITION STATEMENT: Provided departmental insight and
recommendations on the marijuana ballot measure.
CYNTHIA FRANKLIN, Director
Alcoholic Beverage Control Board
Alaska Department of Community and Regional Affairs
Anchorage, Alaska
POSITION STATEMENT: Provided insight and recommendations from
the Alcoholic Beverage Control Board's perspective on the
marijuana ballot measure.
JEFF JESSEE, Chief Executive Officer
Alaska Mental Health Trust Authority
Anchorage, Alaska
POSITION STATEMENT: Provided insight and recommendations from
the Alaska Mental Health Trust Authority's perspective on the
marijuana ballot measure.
ACTION NARRATIVE
9:02:32 AM
CHAIR BILL STOLTZE called the Senate State Affairs Standing
Committee meeting to order at 9:02 a.m. Present at the call to
order were Senators McGuire, Wielechowski, and Chair Stoltze.
^Presentation by Executive Branch Representatives: Marijuana
Ballot Measure - Discussion of Implementation / Administration
Perspective
PRESENTATION BY EXECUTIVE BRANCH REPRESENTATIVES: MARIJUANA
BALLOT MEASURE - DISCUSSION OF IMPLEMENTATION / ADMINISTRATION
PERSPECTIVE
9:02:47 AM
CHAIR STOLTZE announced that the committee will continue its
review of the marijuana initiative, Ballot Measure 2. He added
that there is no legislation in the committee for the omnibus or
the comprehensive marijuana bill. He specified that a bill will
be forthcoming from one of the committee members, Vice-Chair
Coghill or Senator McGuire.
He said the theme for the committee meeting is a presentation by
the Walker administration from the various departments that have
the most direct impact. He explained that the committee cherry-
picked the most relevant and frontline agencies and departments
that will be helping to formulate any legislation in addition to
coping with the act's implementation when it goes into law.
9:05:38 AM
HARRIET MILKS, Assistant Attorney General, Civil Division,
Alaska Department of Revenue, Juneau.
9:06:13 AM
KACI SCHROEDER, Assistant Attorney General, Criminal Division,
Alaska Department of Law, Juneau, Alaska, said her presentation
will address questions raised by the initiative for the Criminal
Division. She revealed that the initiative does not repeal any
law. She pointed out that the state has a legal structure to
deal with conflicting statutes without having to start from
scratch.
She said the Department of Law would like to point out a few
things that are in conflict. She revealed that there are three
marijuana definitions on the books once the initiative becomes
effective. She said the medical marijuana definition is very
short and basic. She noted that the marijuana definition in the
drug offense statutes is much more extensive and pointed out
that the definition specifically excludes: hashish, hashish oil,
and resins in oils made from the marijuana plant. She disclosed
that the marijuana definition in the initiative does include
marijuana concentrates and resins. She specified that case law
says that conflicting statutes are not supposed to be
interpreted in such a way that it nullifies parts of the
statute, but conflicting statutes are supposed to be harmonized.
She conceded that harmonization is an inexact science and
different people will harmonize in different ways.
9:08:38 AM
SENATOR WIELECHOWSKI opined that having one definition would be
preferable. He asked if Ms. Schroeder agreed and what would be
her recommended definition.
MS. SCHROEDER replied that she agreed that one definition would
be preferred. She stated that the Department of Law would defer
to the Legislature or regulatory board of what definition they
want to pick. She noted that the Department of Law has an issue
with the term "concentrates." She specified that the Department
of Law would like some definition of "concentrates" regardless
of the definition for marijuana.
CHAIR STOLTZE commented that the overriding theme of the bill is
precise definitions.
SENATOR WIELECHOWSKI asked Chair Stoltze if maybe it is time for
the committee to get into the specifics.
CHAIR STOLTZE replied that the committee does not have a bill
but noted that questions can be placed on the record.
SENATOR WIELECHOWSKI asked what "PSUM" stands for in the
initiative.
MS. MILKS answered that PSUM is an acronym used in the
initiative, [Production, Sale, and Use of Marijuana].
SENATOR WIELECHOWSKI asked why the Department of Law has an
issue with "concentrates."
9:10:11 AM
MS. SCHROEDER explained that the "concentrates" definition
currently in the drug offense statutes specifically excludes
hashish, hashish oil, resin, and extracted oil. She said the
statute's definitions for hashish and hashish oil include the
word "resins" and "concentrate." She pointed out that there
could be an argument that hashish and hashish oil are
concentrates. She revealed that under current law, hashish and
hashish oil are schedule IIIA drugs and marijuana is a schedule
6A drug. She stated that the Department of Law needs to know the
Legislature's intent with the definition for concentrates.
SENATOR WIELECHOWSKI asked if the Department of Law recommends
that hashish's definition be kept different or kept out. He
inquired what the issue is with hashish as opposed to marijuana
concentrate.
MS. SCHROEDER replied that hashish is made in a different way.
She specified that hashish is much more concentrated with higher
tetrahydrocannabinols (THC) levels than marijuana. She said an
ounce of hashish oil will go a lot farther than an ounce of
marijuana. She stated that the Department of Law is not saying
that hashish has to be excluded or included, but a determination
needs to be made and regulatory boards can regulate it
differently even if it is included.
9:12:19 AM
She said the other issue the Department of Law wants to flag is
that currently it is a class B misdemeanor for someone to
possess less than an ounce of marijuana. After the initiative
becomes effective, anybody over 21 can possess an ounce or less,
but a person under 21 will be charged with a class B
misdemeanor, a criminal offense. She explained that the
Department of Law does not know if a violation for those under
21 should be considered or maybe something similar to the minor
consuming alcohol statute.
CHAIR STOLTZE asked how minor consuming of alcohol is treated.
MS. SCHROEDER replied that a person's first two offenses are
violations and then a misdemeanor after the first two.
SENATOR WIELECHOWSKI stated that everyone is in agreement for
not wanting kids to be using marijuana. He asked if the
department had an opinion on a kid getting a misdemeanor when
there is a good chance the offense could be on his record for a
long time.
MS. SCHROEDER replied that Department of Law does not have an
opinion. She said if the intent is to regulate marijuana like
alcohol, the Legislature may want to consider looking at how
alcohol is treated for minors. She specified that if the
Legislature decides marijuana is different than alcohol, than
the offense structure needs to be different, that's fine too.
She stated that the Department of Law knows that underage
possession is going to be an issue and the department does not
want there to be complaints where a person that is 20 and a half
is charged with a misdemeanor.
9:14:18 AM
MS. SCHROEDER noted that the initiative allows local governments
to prohibit marijuana establishments from operating within their
municipality. She said the department needs direction on what
the penalty should be for operating marijuana cultivation
facilities, product manufacturing facilities, testing
facilities, or retail stores in a community that has opted to
prohibit such activities. She pointed out that the penalties in
the current drug offense statutes range from a class A
misdemeanor to an unclassified felony for the previously noted
activities. She asked if the noted offenses should be treated in
the same way as bringing alcohol into an opt-out community where
the offense is either a class A misdemeanor or class C felony.
She reiterated that the initiative does not repeal any law and
noted that marijuana is still a controlled substance. She
specified that under the promoting contraband statutes, bringing
a controlled substance into a correctional facility is a class C
felony and bringing a legal product like tobacco into a
correctional facility is a class A misdemeanor. She inquired
whether the promoting contraband statute should be amended.
9:16:23 AM
CHAIR STOLTZE commented that both the committee and the
Department of Law is seeking clarity on the marijuana issue. He
pointed out that PSUM proponents have testified towards a
minimum role for the Legislature with broader authority to a
board. He asked if the Department of Law can give the committee
guidance.
MS. MILKS noted that she is representing the Civil Division of
the Department of Law. She asserted that the Department of Law
is ready to get to work and do what they can to assist the
Alaska Beverage Control Board (ABC Board) or a marijuana control
board in regulating the new marijuana industry.
CHAIR STOLTZE queried if the Department of Law can give the
committee more guidance. He asked if the department would prefer
administering with clarified definitions. He inquired if the
Department of Law would prefer a board-direction where a board
makes the rules and regulations.
9:18:35 AM
MS. MILKS answered that the Department of Law can be more
specific. She said with respect to definitions, lawyers always
like bright-lines. She stated that the Legislature can be
helpful by assisting the regulatory board in defining important
terms like "marijuana" and "public."
CHAIR STOLTZE opined that the Walker administration apparently
wants the Legislature to defer to the growers and producers to
define and regulate marijuana.
MS. MILKS replied that she did not intend to make the inference
that Chair Stoltze noted.
CHAIR STOLTZE reiterated that the Legislature is looking for
guidance. He asserted that the Department of Law is making a
statement by deferring.
9:20:42 AM
SENATOR MCGUIRE asked that if the Legislature was to change the
promoting statute to change the definitions such that marijuana
would not be a controlled substance in that area and to regulate
it more like tobacco and alcohol, would the Legislature need to,
across the board, change the definition of marijuana as a
controlled substance. She noted that Ms. Schroeder was shaking
her head "no." She added that besides the promoting contraband
statute, what other places in law will the Legislature be
affected by leaving marijuana as a controlled substance.
SENATOR COGHILL joined the committee meeting.
MS. SCHROEDER answered that taking marijuana out of the
controlled substance classification would affect the entire drug
offense statutes because the statutes all refer to controlled
substances. She stated that a change was not impossible. She
explained that an easy drafting modification would be to
specifically revise the promoting contraband statute by carving
out marijuana while leaving the rest of the controlled
substances as a class C felony.
SENATOR MCGUIRE remarked that the Department of Law's detailed
presentation specified the places where clarity is needed as
well as the potential for absurd results if marijuana is
regulated more like alcohol. She said the Department of Law
pointed out that marijuana is still a controlled substance and
its effect as to whether the promoting contraband statute at
correctional facilities should be amended. She asked that the
Department of Law thoroughly review other places where they
would see a felony or a misdemeanor crime come into place versus
a lesser penalty for alcohol. She stated that her assumption is
that there are more places.
CHAIR STOLTZE concurred that receiving additional comments on
practical applications would be a good guide for all the
committees that address marijuana.
9:24:15 AM
MIKE LESSMAN, Legislative Liaison, Alaska Department of Public
Safety, Anchorage, Alaska.
9:24:37 AM
MAJOR DENNIS CASANOVAS, Deputy Director, Division of Alaska
State Troopers, Alaska Department of Public Safety, Anchorage,
Alaska, presented his testimony as follows:
I appreciate the opportunity to address this
legislative committee and to primarily reaffirm to you
that the Alaska State Troopers are committed to
carrying out the laws of the state in the most
professional and effective manner possible.
While most state legislation is carefully crafted and
vetted and it includes modifying existing statutory or
regulatory language so the intent of new legislation
is clear and conflicting language and ambiguity is
eliminated, what we are faced with here with the
passage of Ballot Measure 2, although it resulted in 8
community hearings held during September of 2014 and
now that the election results have been certified,
Alaska State Troopers and other Alaska law enforcement
officers around the state are expected to understand
and legally enforce the changes which this initiative
provides for and I point out that it's just going to
be in 27 days from now.
I would like to outline where the Alaska Legislature
may be able to assist law enforcement in understanding
what is expected of us and to better inform the law
abiding public on what is expected of them as well.
9:26:05 AM
The primary issue as you've heard the Department of
Law talk about is this reconciliation or merging of
definitions of marijuana; again, that we will need to
know by February 24. There are existing statutes as
you have heard testimony to and this slide primarily
points out the differences in that definition between
the statute that police officers are most familiar
with, AS 11.71.900, and then the new initiative on the
far right hand side of the slide. The new initiative
is much more broad and encompassing of the definition.
We have been accustomed to just looking at a marijuana
plant or marijuana products and saying there's only
four active parts of that plant and that's the
flowers, buds, leafs, and seeds. Now with the new
initiative that definition has expanded and
essentially includes anything that could be extracted
from the plant to include the resins, compounds, and
the manufacture of items from this plant. To further
sort of complicate that issue is that in the ballot
initiative the definition says what's not there and
that's fiber produced from the stalks, oil, or cake
made from the seeds of the plant, etc. So they have
the word "oil" in the lower part of the initiative
that is not part of the plant. I would like to give a
few examples of the circumstances that law enforcement
may be faced with here next month and see if it's
clear to the board to hear what it is that your
decision would be.
9:28:21 AM
If we could envision a law enforcement officer
contacting a citizen in a public place, perhaps a
street corner or an airport or a Marine Highway System
terminal, or even on school grounds which aren't
already posted prohibiting the possession of
marijuana, or even during a traffic stop on a public
roadway. So you have a 21 year old citizen, who has a
container with slightly less than one ounce of a
substance that appears to be a marijuana concentrate
and 6 marijuana plants, only 3 of which that are
mature, flowering plants. Would this be a criminal
offense? If you apply the definition of the new ballot
measure, the answer would be probably not. But if you
apply the definitions found in current statute that
aren't being modified or revoked yet, the answer would
be it could be a criminal offense.
So if we add another variable to that, let's say the
law enforcement officer contacts three 21-year-olds in
a vehicle on a public roadway, sitting in the center
console of the vehicle is a single container with just
under three ounces of marijuana or marijuana
concentrate and that there are 18 marijuana plants,
only 9 of which are mature, flowering plants. The
citizens in the stop claim that each of them own one
third of the products. Is there a criminal offense?
Applying the definition of the new Ballot Measure the
answer may be no. But applying current Alaska law and
court rulings that describe possession which may be
sole or actual possession, constructive or held
jointly with others, the answer could be that this
could be a criminal offense.
9:30:18 AM
Let's examine a law enforcement officer who responds
to a residential apartment or home for a call for
service; while there, the officer learns that from
each of the four 21-year-olds that this is their
primary residence. Found in the home is 24 growing
marijuana plants, 12 of which are mature, flowering
plants. Is this a criminal offense by one, or perhaps
all four of the residents, or are they within their
legal limits per the Ballot Measure?
And one additional variable to that is let's say that
in addition to all these plants, there are three
pounds of harvested marijuana located in the home.
Does the language found in the initiative under AS
17.38.020(b), which reads that is not a criminal or
civil offense under Alaska law to possess, grow,
process, transport more than six marijuana plants,
three or fewer being mature plants, and the possession
of the marijuana produced by the plants on the
premises where the plants were grown, meaning that
there is potentially no maximum limit to the amount of
marijuana produced by the plants in the residence
where the plants are that can be harvested or
retained.
9:31:46 AM
MAJOR CASANOVAS summarized as follows:
Ballot Measure 2 is going to require the Alaska State
Troopers to order, and we have, over four hundred
battery operated scales to hand out to Alaska State
Troopers and Village Public Safety Officers so that
they may be able to accurately weigh marijuana and
marijuana concentrates when encountered. We intend to
produce a PowerPoint presentation to our troopers as
to the policies for enforcement of this new law but we
still need your assistance in clarifying some of the
conflicting and ambiguous language before February 24,
which will assist us in designing those policies. Our
Alaska law enforcement officers and the vast majority
of Alaska's general public wish to comply with the
laws which are enacted, but we need your direction and
support in making those laws understandable and
enforceable and to later withstand judicial review.
9:32:45 AM
CHAIR STOLTZE asked if Major Casanovas had concern or optimism
regarding the Legislature reaching the clear lines to allow the
Alaska State Troopers to administer justice.
MAJOR CASANOVAS replied that the initiative was certified two
months ago and there is one month left. He noted that there is
at least one bill moving forward. He revealed that the
Department of Public Safety has met with several other state
departments and he remains optimistic that the department can
have some language reconciliation prior to February 24.
CHAIR STOLTZE asked if the initiative is similar to the Miranda
Ruling which had a lot of opposition or concern about it and it
eventually shook out. He inquired if the initiative has to be
tested by arrest.
MAJOR CASANOVAS answered that his hope is that by putting the
time upfront in getting the definitions clarified so that law
enforcement knows what the rules are, there will be less long
term, expensive litigation and heartache from citizens and the
judiciary. He said he thinks if we just burn the candle at both
ends right now, perhaps a lot of consternation, anxiety, and
expense can be avoided down the road.
CHAIR STOLTZE commented that Major Casanovas holds a common
view.
9:34:55 AM
SENATOR MCGUIRE remarked that there has been a narrow focus on
what is the definition of marijuana. She stated that from a
broader view, the reason for laws pertaining to alcohol,
marijuana, and other drugs is due to the mind altering effects
on human beings that may or may not create public safety or
other types of threats or concerns within a community. She
asserted that the Legislature in many cases has been forced to
go back and reevaluate the state's relationship with marijuana.
She explained that the initiative has tried to carve out one
area, but in doing so the initiative has thrown the bigger,
broader issue on the Legislature's lap.
SENATOR MCGUIRE said she is looking for the Department of
Safety's point of view on the following:
· How does the department view marijuana?
· How do the officers view marijuana?
· What is marijuana's placement in Alaska's communities?
· What is marijuana's placement in society?
· Where do you think the Legislature should come down in
terms of the regulation of marijuana?
· What are the potential harms and threats to human beings?
· Where are the places you are seeing potential threats?
· Are your concerns in certain parts of the state?
· Are your concerns more on the manufacturer and
distribution?
· Are you seeing physical crimes occur alongside marijuana at
a rate that is disproportionate to other mind altering
substances?
· What are the kinds of things from a public safety point of
view should the committee know?
9:37:27 AM
MAJOR CASANOVAS replied as follows:
The points that the Department of Law made; for
example, where the line should be drawn between the
current understanding of marijuana as a 6A controlled
substance: flowers, seeds, buds, leaves? How do we
cross that next bridge that apparently the voters
supported in this ballot initiative to expand that to
things that are a lot higher in concentration of THC?
How do we bridge that? Do we say that there is a
demarcation point there or do we not? Do we say that
anything, everything from a marijuana plant is going
to be legal in some quantities or not? That is the
crux of the matter and I'll have to defer to the
expertise of the State Medical Officer in regards to
the toxicity and the impacts upon people and those
sorts of things. But right now law enforcement is very
focused on the difference between a Schedule IIIA
controlled substance, which is more serious than a 6A,
and the IIIA is hashish, hash oil, and it's
Tetrahydrocannabinols and those are considered at this
point to be more serious and we've been very focused
on drawing the distinctions between those two for
approximately 30 years now in those statutes and now
to sort of merge them all together based on this
ballot initiative is the thing that we are struggling
with in law enforcement.
9:39:24 AM
SENATOR MCGUIRE stated that she is interested in creating policy
that reflects common sense and that responds to the kinds of
challenges that are out there. She noted that Major Casanovas
made a point between Schedule III and 6A drugs; but, to the
average public person, they don't really understand all of that,
what matters is the public safety part of it. She pointed out
that over two years of hearings with detailed testimony occurred
when the Legislature lowered the blood-alcohol to 0.08 for
driving under the influence. She specified that the blood-
alcohol change was made not because the Legislature could, but
because driving at 0.10 was more of a threat to public safety
than 0.08. She said law enforcement is on the ground dealing
with people who distribute and use marijuana. She asked what
Major Casanovas is seeing that the committee should be concerned
about. She conceded that everyone can agree that the public
safety issue of young people using marijuana is not something
the State of Alaska should encourage, but as the Legislature
moves into the issue of adults 21-and-over using cannabinoids,
where should the Legislature be alarmed, in the ounces or the
concentrates? She asked that more specific testimony be provided
in the future where officers observe a person's behavior under
the influence of cannabinoids. She reiterated that the
Department of Public Safety is on the ground, responding to
people under the influence of marijuana and the department can
really help the Legislature.
9:41:12 AM
SENATOR HUGGINS joined the committee meeting.
MAJOR CASANOVAS replied that he will certainly discuss with his
supervisors as to what it is that the department might be able
to do to answer Senator McGuire's question.
CHAIR STOLTZE commented that the committee will look forward to
the detailed follow up.
SENATOR WIELECHOWSKI stated that he appreciates the examples
that Major Casanovas gave and his comments. He noted that there
is a strong desire to get this right on behalf of the
Legislature. He conceded that there clearly are inconsistencies
between the law and the initiative; but, the Legislature is
going to try to fix it and get it right. He remarked that the
Legislature will possibly miss something when enacting the law.
CHAIR STOLTZE commented that it is likely.
SENATOR WIELECHOWSKI replied that he agreed. He remarked that
the enforcement should be to enact the will of the people. He
said enforcement should not be to say, "Well, under the old law
you have one plant too many in your car, but under the
initiative that's okay;" that's the will of the people, the
people have spoken. He asserted that the enforcement policy
should be to follow the will of the people.
SENATOR MCGUIRE affirmed that Senator Wielechowski made a good
point that the Legislature's job is to enact the will of the
people. She asserted that an exception occurs where there is a
public safety threat. She agreed with the scenario presented as
to why a person should be charged with a felony rather than
violation or misdemeanor for having one plant more. She
specified that her intent is to get at case examples where the
Department of Safety is really concerned and where the
Legislature should draw the bright-lines.
CHAIR STOLTZE commented that he is hoping to direct the
committee's attention to the Walker administration presenting
what Senator McGuire is asking for. He noted that what the
committee is debating usually occurs during the bill wrap up.
9:44:57 AM
SENATOR COGHILL said one of the questions the Legislature is
wrestling with is to tell when somebody is impaired using
marijuana.
MAJOR CASANOVAS replied that arrest for impairment depends on
the officer doing the following:
· Observes vehicle maneuvers that leads to a stop.
· Odor detection during initial encounter.
· Asks the driver for a verbal explanation on his or her
condition and what they might have consumed.
· Have the subject, if willing, participate in a series of
field sobriety tests.
· Use a portable breath testing device to determine if
alcohol is involved.
MAJOR CASANOVAS continued that if there is no evidence of
alcohol and the person still appears to exhibit all the symptoms
and signs of being under the influence of something, whether
that is a prescription or illicit drugs, the officer takes all
of the previously noted field observations into consideration to
make the decision whether to arrest or not. He explained that
once an arrest is made, then a consent for a blood draw from the
subject or a search warrant is obtained for a blood draw from
the subject to try to be able to later identify what substances
may or may not have been onboard the person that would have
resulted in the impairment.
He specified that an officer in the field cannot ascertain
whether a person's impairment is marijuana and marijuana only in
addition to identifying whether marijuana is comingled with
alcohol or prescription drugs. He explained that there is not a
field test or a breath test device that would at this point be
available that would tell an officer the level at which a person
might be impaired by marijuana alone.
9:47:46 AM
SENATOR COGHILL responded that he just wanted to get the
information as a starting point for discussion.
CHAIR STOLTZE asked for the Department of Public Safety to
provide a narrative which will be useful all the way through the
committee process as well as the floor. He requested that the
department submit an official document that identifies their
objective and subjective applications for determining
impairment.
SENATOR HUGGINS noted that Senator Wielechowski's statement
regarding "will of the people" is important. He commented that
if a parallel to alcohol is used with marijuana, what are the
complicating enforcement factors when a person is prohibited to
use alcohol or marijuana by a court case.
9:49:34 AM
MAJOR CASANOVAS answered that the difficulty for law enforcement
will be if the officer is not provided benefit of the subject
themselves admitting or outlining what it is that they have been
taking or any witnesses to provide that information. He said
there is very minimal information available to the officer in
the field for trying to isolate whether or not marijuana or a
concentrate or something was used by the subject that may put
them in violation of their conditions of release or conditions
of probation; it is a hurdle for us to overcome in the field
with marijuana.
SENATOR HUGGINS noted that there has been a major influx of
marijuana going into states that border Colorado. He asked what
would happen from an enforcement perspective if Wasilla decides
that they are not going to participate in the marijuana process
and neighboring cities like Anchorage or Palmer decide not to
opt out.
9:51:26 AM
MAJOR CASANOVAS replied that based upon discussions he has had
with the Department of Law, a person 21 and older will have the
right to possess and transport marijuana in public. He noted
that he has not heard that a community can actually put up a
fence for marijuana as is done with alcohol. He said he believed
that the initiative is going to, in essence, disallow a
community from prohibiting possession; but, communities can
regulate or ban marijuana cultivation, manufacturing, testing,
and retail sales.
CHAIR STOLTZE asked if marijuana equates with alcohol as to
whether there is transferability in areas that are "damp," "wet"
or "dry."
MAJOR CASANOVAS surmised that there is no transferability
because even though communities could vote against the
possession or importation of alcohol into their communities, as
about 108 communities currently do, the marijuana initiative
appears to say that people will have the right, up to an ounce,
21 years of age, to have possession of marijuana when they come
into the city limits of communities that do not allow the
possession or importation of alcohol.
CHAIR STOLTZE announced that representatives from the Department
of Revenue will testify before the committee.
9:54:31 AM
JERRY BURNETT, Deputy Commissioner, Alaska Department of
Revenue, Juneau, Alaska.
KEN ALPER, Director, Tax Division, Alaska Department of Revenue,
Juneau, Alaska.
BRANDON SPANOS, Deputy Director, Tax Division, Alaska Department
of Revenue, Anchorage, Alaska.
MR. ALPER noted that Mr. Spanos oversees the excise tax group
which is the group that will be charged with overseeing any
marijuana taxation statutes. He said the initiative is a fairly
lengthy piece of law, about 8 pages long and taxation is fairly
brief, approximately a half of a page. He revealed that the
Department of Revenue has been working with the ABC Board and
other agencies from the beginning to make sure that the
transition is relatively seamless. He asserted that the tax
portion of the law is a relatively straight forward corner of
the overall marijuana initiative.
He stated that the Department of Revenue is expected to collect
$50 per ounce. He said the transfer will occur at the first
transaction from the grower or cultivator to the manufacturer or
retailer. He specified that the law is fairly clear that the
plant itself, the useable part, will be taxed at the cultivation
facility and not a manufactured concentrate or anything else in
those lines. He noted that the follow up to the taxation section
in the statute is that differential taxes on different parts of
the plant can be established if so chosen, but the $50 per ounce
is the baseline position.
9:56:16 AM
He revealed that the Tax Division administratively collects
taxes throughout the state, including: alcohol, tobacco, motor
fuels, vehicle rentals, and tires. He set forth that the
Department of Revenue anticipates that the marijuana taxation
functions will be handled inside of the department's excise tax
group. He asserted that adding marijuana taxation is well within
the department's competency to add another one. He shared that
the department's one concern is to maintain taxation on the
wholesale or producer level as is done with tobacco and alcohol.
He stated that taxation at the individual retailer level would
impose a much more complex administrative burden on the
department.
He revealed that preliminary revenue estimates from the
department's economic research group is $5 million to $20
million in the first full year of taxation and regulation of
marijuana. He noted that the relatively broad revenue estimate
is attributed to some inherent unknowns such as the quantity and
volume of current marijuana users in the state. He reported that
the biggest variable is what proportion of the current cohort of
marijuana smokers and consumers are going to transition from
illegal to the legal tax regulated market. He noted that the
only points of data where from Colorado and Washington where
robust and fully functional medical marijuana industries and
dispensaries were operating with marijuana that was less
expensive than the legal recreational facilities. He explained
that conversion rates have been relatively low in Colorado and
Washington. He pointed out that Alaska does not have a fully
developed medical marijuana industry despite the fact that
medical marijuana has been legal and on the state's books for
some years.
MR. ALPER stated that tax enforcement is widely believed to be a
good way of catching and prosecuting law breakers that might be
hard to catch in other ways. He said the Department of Revenue
envisions working with the licensing agencies; for example, if a
selling facility after inspection is found to have seven pounds
of marijuana in their possession and they can't prove from whom
they bought it and the taxes were paid when they got it, the
Department of Revenue has a tax enforcement case with relatively
robust fines as well as the $50 an ounce tax itself. He
specified that the Department of Revenue's Criminal
Investigations Unit works not just for the Tax Division, but for
the Alaska Permanent Fund and the Child Support Enforcement
Agency, will be working with the department to make sure that
marijuana taxes are collected. He revealed the fact that Al
Capone did not go to jail for being a gangster, he went to jail
for not paying his income taxes.
9:59:16 AM
He stated that he fully expects that the Legislature will have a
robust and complex role this Session. He surmised that at least
one bill will be passed. He declared that the Department of
Revenue will not jump-the-gun and start a regulatory process
until the department receives direction. He noted that the
Department of Revenue is under a requirement to finish the
marijuana regulations by November, a solid seven months after
the Session. He stated that the Department of Revenue is
confident that the regulatory process will be completed well in
advance of the deadline.
CHAIR STOLTZE related that the Department of Revenue projected
tax revenues to be $5 million to $20 million. He asked what the
department anticipates for transactional costs for
implementation within the department.
MR. BURNETT replied that the transactional costs are going to be
small, assuming that taxation continues at the wholesale level.
He specified that with the other excise taxes, the transactional
costs will amount to less than one fulltime employee.
SENATOR COGHILL asked if the tax scheme methodologies in
Colorado or Washington were reviewed for guidance.
MR. ALPER replied yes. He noted that other jurisdictions were
taxing at the retail level which makes the tax process more
complex.
MR. SPANOS added that the Tax Division has looked at Colorado
and noted that he has a meeting with their contractor to assist
the division in developing their software to go over Colorado's
tax structure in detail. He stated that there does not seem to
be a lot that's going to be useful from Colorado's tax return.
He said the tax and tax return will be fairly simple. He said
the Tax Division already has a draft-return that taxes ounces at
a certain rate. He noted that as Mr. Alper had already stated,
the Tax Division has an opportunity to tax different parts of
the plant at a different rate and that's the multi-complex part
of the return.
SENATOR COGHILL remarked that the committee is still trying to
figure out what does an "ounce" mean. He specified that "ounce"
could be the "plant" or the "derivatives." He asked how the Tax
Division will interpret "ounce." He noted that Colorado is bar-
coding each plant and asked if the state will do the same or use
an aggregate methodology. He added that the Legislature will
continue to discuss the marijuana regulation scheme and noted
that the ABC Board is currently reviewing taxation schemes. He
asked what would be the best and cleanest way for the Tax
Division to tax marijuana.
10:02:56 AM
MR. ALPER answered that from the point of view of the Tax
Division, an ounce taxed will be the plant matter that is being
sold for future consumption. He detailed that within the
cultivation facility, there might be the following: trimming,
packaging, creating of the package, whatever that is to which
the plant will be transferred. He added that there will be a
scale, stamp, and some sort of mechanism to prove that the tax
has been paid. He asserted that he does not envision the issue
of concentrates being at all relevant to the Tax Division's
definition of an ounce for tax purposes, it's purely going to be
the plant itself.
SENATOR COGHILL replied that the committee will have to address
the retail-level because the plant value at a stem is one thing,
but the plant value in its concentrate is a very different
thing. He summarized that there are possession issues as well as
value issues that the committee will have to think about. He
noted that the ABC Board is probably addressing the possession
and value issues. He stated that value will be an issue at the
Tax Division. He summarized that once a plant goes out and if
taxation is totally wholesale based, which looks like the
initiative wants the Legislature to do, value will likely be
placed on an individual plant.
10:04:14 AM
MR. BURNETT set forth that the Tax Division will not have a
problem with value taxation at the first transaction that is
based upon ounces. He noted that the initiative specifies
ounces. He stated that the Tax Division does not, for the most
part, do retail taxes at the state level in Alaska. He mentioned
that there is a question as to whether from the Legislature's
perspective that taxability be reserved for local government
entities as is currently done with alcohol and tobacco.
SENATOR COGHILL concurred that many communities have sales
taxes. He agreed that retail taxation probably more properly
belongs to the local governments.
MR. ALPER added that the Department of Revenue has learned that
the concentrates in other states tend to be manufactured from
lower value parts of the plant, things that might not be usable
by the traditional smokables market. He detailed that a large
amount of lower value product is being used to generate a small
amount of concentrate and there would be consideration for a
different tax rate or different tax regime on the lower value
portion of the marijuana plant.
10:06:00 AM
CHAIR STOLTZE noted that Mr. Alper has been involved with a lot
of tax issues. He asked if Mr. Alper has considered himself to
be pretty knowledgeable with marijuana as well.
MR. ALPER responded that when he was asked to be the Director of
the Tax Division, marijuana was not part of the conversation nor
did he realize that it was going to be part of the job. He
stated that he does not consider himself to be much of an
expert. He explained that he is somewhat aware of the marijuana
industry, but he noted that he has had to learn a lot during his
two months on the job.
CHAIR STOLTZE noted that Mr. Alper is a part-owner of a bakery-
confection shop.
MR. ALPER answered that is true.
CHAIR STOLTZE asked if Mr. Alper or his family have looked at
the possibility of being involved in the marijuana edibles
portion.
MR. ALPER replied that he and his wife were aware of the
initiative and have had almost joking conversations about
edibles. He specified that their realization early on was that
they would need to see what the rules are going to be and would
need to run the economics. He specified that he and his wife are
by no means opposed, but by no means gun-ho. He asserted that
ultimately in his role as Tax Director that it might not be
appropriate. He said even if he and his wife thought marijuana
edibles might be a good business decision, they might opt out
just to avoid any appearance of conflict.
CHAIR STOLTZE asked to confirm that Mr. Alper has had
discussions about the business opportunities.
MR. ALPER answered that he has had informal discussion with his
wife who is his business partner.
CHAIR STOLTZE asked to confirm that Mr. Alper has not had
discussions with any other people as well.
MR. ALPER replied that he does not understand the question.
10:07:47 AM
CHAIR STOLTZE asked if Mr. Apler and his wife have talked to
another person at any time about a marijuana business
opportunity.
MR. ALPER replied that he and his wife have had informal
discussions at a party or casual conversations. He noted that
Chair Stoltze is not the first person who has asked if he and
his wife would be interested in getting into the marijuana
industry due to their bakery business.
CHAIR STOLTZE asked to verify that Mr. Alper's business
enthusiasm is very damp for marijuana.
MR. ALPER answered that on a scale from 1 to 10, his enthusiasm
is a 4.
SENATOR HUGGINS stated that his assumption is that THC can by
produced synthetically. He asked if THC can indeed be produced
synthetically and economically. He inquired if the Legislature
should have a concern for synthetic THC, particularly from a
taxation standpoint where inexpensive THC might be incorporated
into edibles.
10:09:17 AM
MR. BURNETT answered that a synthetic THC would be illegal. He
specified that there are different laws that allow the
Department of Revenue to look at whether a business is using
artificial or imitation substances.
SENATOR HUGGINS pointed out that certain states license ethanol
dealers to produce alcohol. He asked if the Department of
Revenue has considered quasi-legalized THC production that is
similar to "moonshine" produced in the alcohol industry.
MR. ALPER replied that initiative allows a person to grow
marijuana and not be taxed or regulated. He specified that
growing larger quantities of marijuana than what is specified is
illegal. He stated that tip-offs to the department from legally
licensed growers will hopefully be one of the best enforcement
mechanisms.
10:12:03 AM
CHAIR STOLTZE asked if the Department of Revenue has considered
progressive taxes that increases based upon value.
MR. ALPER answered no. He said he is not interested in testing
or comparing relative quality of marijuana and declaring that a
certain product is worth more.
SENATOR HUGGINS asked what the Department of Revenue anticipates
what the value of one ounce of marijuana will be.
MR. ALPER answered that he did not know what the value of an
ounce of marijuana in Alaska is today. He said he knows that
marijuana prices are regionally distinctive due to a lot of
local regional economies.
MR. SPANOS remarked that the Tax Division has done the research,
but he does not have the data in front of him. He explained that
he has looked at Alaska's value via the internet and the Tax
Division does have an idea.
MR. ALPER stated that he anticipates, because of the federal
illegality on the restrictions on transportation that go along
with pricing, that Alaska will have a series of regional
"locally grown" economies with differential prices.
CHAIR STOLTZE remarked that finding Alaska's current marijuana
prices on the internet is interesting.
SENATOR HUGGINS asked if the state should look at progressive
tax due to higher regional values.
10:14:53 AM
MR. BURNETT remarked that higher regional prices should be taxed
locally. He said whether the state should be taxing marijuana at
a higher rate or local communities ought to be looking at taxing
higher values is certainly open to discussion.
MR. ALPER opined that local pricing discrepancies is quite
likely due to there not being locally grown and available
supply. He surmised that marijuana is possibly being brought in
illegally and that activity is something other agencies would
need to be looking into.
SENATOR HUGGINS pointed out that there has been speculation on
the state having some sort of banking system in addition to
transportation challenges. He asked to confirm that federal
agencies do not allow marijuana to be transported on airlines.
He inquired if the state should be involved with transportation.
MR. BURNETT replied that Senator Huggins' query is not a
function of the Department of Revenue, but he believes that
addressing both banking and transportation is a rational
question. He remarked that both the Administration and
Legislature should be looking at banking and transportation.
MR. ALPER stated that the Tax Division would prefer that people
not bring large amounts of cash to pay their excise taxes.
10:16:48 AM
SENATOR MCGUIRE commented that saying higher pricing based upon
marijuana being a black market item is not necessarily true. She
pointed out that marketing for Copper River sockeye salmon is an
example where higher value is placed upon a commodity by
purchasers.
SENATOR MCGUIRE addressed taxation and surmised that like oil
taxes, marijuana taxes will evolve over time. She opined that
marijuana's initial taxation will not be the only way forever.
SENATOR MCGUIRE said if marijuana becomes a huge commercial
industry, lots of people will be talking about different way to
tax it.
She stated that her question to the Department of Revenue
pertains to synthetics. She mentioned that Senator Huggins made
a good point when he referenced synthetics from a public safety
standpoint. She remarked that synthetics are illegal, but noted
that the initiative made edibles legal.
She asked that the Department of Revenue address the following:
· Confirm that marijuana will have a chain of custody that
will verify taxation in a way that is similar to a tobacco
stamp.
· Verify that a chain of custody will monitor THC and
synthetic THC levels as well as follow marijuana into the
edibles.
· Corroborate that taxes appropriately provide for the social
services associated with marijuana.
MR. BURNETT explained that the Department of Revenue will be
working with the ABC Board to set up the regulations. He added
that the ABC Board will be on point to address the structure
that Senator McGuire noted.
CHAIR STOLTZE concurred that all kinds of evolutions will occur
with marijuana. He pointed out that with cigarettes, the
Legislature and local governments have raised the taxes with the
stated policy purpose to make sure tax revenue and usage are
reduced. He opined that marijuana may evolve into something
similar to cigarettes.
10:20:49 AM
CYNTHIA FRANKLIN, Director, Alcoholic Beverage Control Board,
Alaska Department of Community and Regional Affairs, Anchorage,
Alaska, noted that Colorado has "medical" and "retail" marijuana
pricing. She revealed that medical-pricing was $150 an ounce and
retail-pricing was $385 an ounce. She specified that Colorado's
retail-marijuana is taxed at a rate of about 25 percent in
addition to sales and local taxes while medical-marijuana is not
subject to many of the retail taxes. She said the ABC Board
urges the Legislature not to go down the path of creating two
separate types of marijuana in Alaska. She pointed out that
Colorado's medical card holders continue to grow as people get
cheaper marijuana. She stated that Alaska has the advantage of
starting with a blank slate.
10:23:41 AM
MS. FRANKLIN revealed that Colorado indicated that definitions
are very important. She asserted that the role for the
Legislature is to define terms. She said the ABC Board can work
with the definitions that the Legislature creates when the board
is looking at the regulations.
She pointed out that the term "edibles" is not defined in
AS.17.38 and the ABC Board would like to see a bright-line
regarding adulterated edibles. She explained that adulterated
edibles is a separate category where existing food products are
sprayed with marijuana and repackaged. She noted that Colorado's
public health and safety representatives found edibles to be
particularly objectionable and particularly appealing to
children. She suggested that a bright-line definition for
edibles could say that it does not include adulterated products,
meaning edibles must be made from scratch. She noted that
members of the early aspects of Alaska's marijuana industry
unilaterally agreed that adulterated edibles was not what they
had in mind where something already made was sprayed down.
She addressed synthetic cannabinoid and explained that synthetic
THC is a myth. She divulged that there is no THC in a synthetic
cannabinoid, the term was used as a marketing ploy and the
elicit substance is not related to marijuana at all. She said
synthetic cannabinoid is a cocktail of various sundry drugs that
is marketed as "synthetic marijuana" to appeal to young people
who were looking for a high that they thought was legal. She
opined that synthetic cannabinoids is off the table and the
discussion of marijuana is really about a natural product that
is grown and what can be done with the plant itself.
10:26:47 AM
CHAIR STOLTZE remarked that the initiative's sponsors testified
about dosages and controlling dosages. He pointed out that a
half liter of vodka with a non-resealable, pop-off cap would be
frowned upon. He noted that while in Denver he had taken photos
of marijuana edibles and noted that one cookie had 70 milligrams
(mg) of THC, or 7 doses. He said he does not smoke marijuana and
hypothetically asked if someone has the self-control to just
nibble off a single dose from the cookie. He inquired if the ABC
Board would have a regulatory and policy role in delineating
dosages and controlling packaging.
MS. FRANKLIN replied that several elements are important to
assure safe recreational use of edibles. She noted that the
products Chair Stoltze saw in Colorado were due to come off the
shelves on January 31, 2015. She said Colorado went back and
rewrote their rules on edibles to take effect on February 1,
2015. She explained that Colorado revised rules around edibles
and created a serving size. She said the debate in the
stakeholders group that made the new edibles rules was whether
the THC serving size should be 5 mg or 10 mg. She revealed that
Colorado settled on 10 mg and asserted that Alaska could have 5
mg. She explained that the reason for a 5 mg serving size is
based upon Colorado's public education program on marijuana
edibles to "Start low and go slow."
CHAIR STOLTZE asked if a 5 mg serving size would be a consumer
advisory or legal imperative. He remarked that serving size is
not indicative of what a person actually eats.
10:29:48 AM
MS. FRANKLIN replied correct. She pointed out that alcohol has
rules on serving sizes and serving sizes for marijuana edibles
could be legislated.
CHAIR STOLTZE asserted that there must be an imperative to lead
the Legislature to set serving sizes relating to public health
or public safety justifications. He stated that he does not want
to emphasize what the Legislature is able to do, but why the
Legislature should do it and what public safety aspects there
are.
MS. FRANKLIN explained that the reason why Colorado settled on
10 mg was basically the scientific basis of a person who has not
previously used edibles, what type of serving of THC would begin
to have the psychoactive effect and how the person would react.
She detailed that a person will feel uncomfortable after eating
or smoking too much marijuana. She noted that there really were
not any scientific effects that were brought forward in terms of
poisoning in the equivalent of alcohol poisoning. She pointed
out that ingesting too much alcohol certainly can lead to death
and that has not been seen with marijuana; however, people in
Colorado and Washington have been admitted to emergency rooms
with uncomfortable sensations due to marijuana's psychoactive
effect. She stated that the 5 mg serving size was determined to
be a small serving size where someone will feel the psychoactive
effect.
CHAIR STOLTZE stated that the Legislature has an imperative not
to jump into a "Reefer Madness" mode, but to actually
concentrate on what the empirical science, data, and public
safety aspects are.
10:32:14 AM
MS. FRANKLIN opined that the 5 mg serving size is a reasonable
serving size with a maximum of 50 mg per package that included a
clear demarcation. She explained that on February 1, Colorado
will require a cholate bar to have a clear demarcation for 10 mg
squares.
CHAIR STOLTZE asked to verify that rather than a large block, a
chocolate bar would have to have scorings that shows 10 mg.
MS. FRANKLIN answered correct. She detailed that Colorado has a
maximum of 100 mg per package. She stated that there is no
reason why Alaska could not have a 50 mg maximum per package.
CHAIR STOLTZE related that when he was in Colorado he noticed
the "Peanut Budda Buddha" bar with 210 mg.
MS. FRANKLIN replied that the product Chair Stoltze noted will
be removed from stores on January 31. She detailed that under
Colorado's new rules, a chocolate bar that contains more than
[100] mg cannot be sold.
She addressed childproof packaging in Colorado and suggested
that Alaska adopt a similar rule where an edible packaged in a 5
mg serving size does not require childproof packaging, but an
edible in a 50 mg package would have to be resealable to
childproof. She noted that she toured a company that made fizzy
THC drinks that had to change their bottling machine to
incorporate childproof caps.
She pointed out that prior to Colorado going to recreational
marijuana in January 2014, the state catered to a medical
marijuana market. She explained that the medical marijuana
market tends to want and demand higher concentration of THC. She
noted that Colorado experienced problems when the higher THC
products sold to the medical marijuana market was consumed by
individuals in the recreational market that had lower tolerance
levels. She asserted that Alaska is ahead of the game by not
having an established medical marijuana market.
10:35:01 AM
She addressed the limitation of products appealing to kids and
noted that there is a trifold role for the Legislature,
regulators, and the local governing bodies. She said Washington
has a system where edibles require a pre-approval process. She
detailed that manufacturers or processors submit products and
plans to Washington's liquor control board, products clearly
marketed towards children are not permitted. She said Washington
has a stopgap that prevents the edibles market from being
entirely gummy-bears and silly-straws.
MS. FRANKLIN called attention to warning labels and noted that
Colorado's are fairly elaborate. She pointed out that warning
labels are required for alcohol and she anticipates the same for
marijuana edibles. She recommended that Alaska uses a warning
label that clearly identifies the product and suggested that a
symbol be associated with the warning. She detailed that a
warning symbol will work for people who cannot read English and
can immediately associate the product as being infused with
marijuana.
She noted that Major Casanovas made a good point on the
definition of marijuana in the initiative. She asserted that the
Legislature has to be very careful about altering the definition
too severely because the only way to make edible products is to
use marijuana concentrates. She said incorporating smashed
marijuana leaves into a brownie is not going to taste very nice
in addition to not having the desired psychoactive effect. She
explained that marijuana must be heated for there to be a
psychoactive effect. She specified that putting marijuana into
an edible requires the marijuana to be heated in an oil base to
make a concentrate. She noted that bakeries in Colorado make
what is called "cannabutter" where marijuana is infused into
butter over a slow heating process. She asserted that the
marijuana edibles industry will be eliminated if "concentrates"
is taken out of the marijuana definition and dialed back to the
Title 11 definition with just stems, flowers, and buds.
She noted that the definition referenced by Major Casanovas had
a strange portion at the end that says marijuana does not
include "oil." She pointed out that "oil" is one word used to
describe a product that is a result of solvent based extraction.
She revealed that solvent extractions in homes has been the
cause of hash oil explosions.
10:39:49 AM
CHAIR STOLTZE commented that some of the home extractions using
solvents make meth labs look tame.
MS. FRANKLIN replied that the Alaska contingency in Colorado saw
a couple of explosions on video.
CHAIR STOLTZE asked to specify that Ms. Franklin is referring to
unregulated extractions occurring at home.
MS. FRANKLIN answered yes. She said the solvent extraction in
homes is not a particularly successful method. She asserted that
solvent extractions in homes is something that Alaska does not
want, but governing bodies should be aware of. She specified
that licensees will not use the nefarious extraction methods
used in homes. She pointed out that licensees in Colorado are
required to use closed-loop extraction systems for solvent or
CO2 extractions with certain safety precautions in place.
She set forth that addressing marijuana regulations is a very
difficult area due to figuring out where the rules around
marijuana stop and the existing rules begin. She pointed out
that the rules in Title 4 for alcohol are in one place and that
alcohol is not in the Controlled Substances Act. She said
officers do not have to look up two different codes and try to
figure out which one the substance falls in. She noted that
Title 4 has many misdemeanor and felony crimes that apply to
individuals who are not licensed or regulated by the ABC Board,
but who are dealing with a dangerous substance. She summarized
that alcohol is a regulated substance, but not a controlled
substance.
10:43:03 AM
She revealed that edibles are 40 percent of the recreation
market in Colorado. She stated that due to smoking prohibitions,
edibles are likely to be the most commonly purchased product for
tourist consumption.
She revealed that labs are big in Colorado. She said she does
not know where the labs are going to come from in Alaska, but
labs are essential to certify the THC content for edible serving
size. She related that Alaska was advised to have its labs up
and running before edible licenses are issued.
CHAIR STOLTZE declared that the committee will have the Alaska
Department of Environmental Conservation (DEC) address the
committee. He noted that the initiative's pamphlet referred to
"crime lab" and that does not make sense.
MS. FRANKLIN added that the ABC Board works a lot with DEC
regarding alcohol regulation.
MS. FRANKLIN stated that Alaska should have reasonable
advertising limits and public education about marijuana rules,
especially around edibles. She noted that Colorado has developed
a good-to-know public education campaign and basically offered
to provide the program to Alaska for free.
She asserted that local government control is important. She
noted that an earlier question referenced not being able to ban
possession is based on the Ravin v. State decision and not by
the initiative. She explained that the Title 4: Local Option Law
allows communities to ban transport, sale, manufacturing, and
distribution, but does not ban possession of alcohol. She
detailed that Local Option 4 applies to municipalities and Local
Option 3 applies villages. She disclosed that the Title 4: Local
Option Law is the best that a community is going to get to. She
noted that local governments in Colorado issued their own
licenses in addition to state licenses. She suggested that
consideration be given to allow local governments to issue
licenses, a question that has been posed by Alaska
municipalities.
She stated that banking and licensing will be presented at a
later committee meeting. She noted that many states in issuing
their medical licenses have been sued because of their licensing
selection process. She recommended that the state look carefully
at its licensing structure.
CHAIR STOLTZE asked that Ms. Franklin address in the future
whether licenses should have an economic vested value or should
another commercial fishing entitlement type license or a taxi
medallion be created. He asserted that licensing merits
discussion due to its impact on barriers for average people
versus big businesses.
10:46:45 AM
JEFF JESSEE, Chief Executive Officer, Alaska Mental Health Trust
Authority, Anchorage, Alaska, stated that despite claims that
marijuana may not be as dangerous as alcohol, marijuana is: not
safe, good for a person, and is addictive. He revealed that
adolescents that begin smoking marijuana have a 14 percent
addiction rate, adults at 6 percent. He added that many of the
Trust's beneficiaries have an issue with marijuana as well. He
revealed that 2.7 million Americans are addicted to marijuana.
He asserted that ending marijuana's prohibition did not require
the creation of a large scale commercial industry to promote the
increased use and normalization of marijuana. He noted that the
Rand Corporation has developed a list of 12 different ways that
one could decriminalize marijuana and the most extreme is
exactly what the initiative proposes to do.
10:48:35 AM
MR. JESSE pointed out the following:
· The black market is not going to go away.
-Small business owners are not going to ban together and
open a business.
-Entry into the marijuana industry will require more than
$100,000 in cash.
· Marijuana will not be regulated like alcohol.
-Infusing alcohol into edibles is illegal.
-THC will be allowed to be infused into edibles.
He said there are many questions that the Legislature needs to
consider. He asserted that the Legislature is the ultimate
regulators no matter what the sponsors say. He opined that the
Legislature will spend the next two sessions on the initiative;
however, he noted that the Alaska Constitution provides
protection from initiatives by allowing the Legislature to amend
within a two year period. He pointed out that the Legislature
has a right to repeal the initiative in 2017. He opined that the
marijuana industry insisted on the 9 month regulatory process
because they know the Legislature cannot put the "genie back in
the bottle." He noted that he has spent 2 years working with the
alcohol industry on overhauling Title 4 and pointed out that in
many cases where the board has given licenses to unqualified
candidates, licensees where "grandfathered" in. He said for the
government to change the rules and eliminate a person's economic
investment is not appropriate for the government.
He recommended that the Legislature seriously consider extending
the regulatory process to scrutinize the following:
· Unlimited licensing.
· Licensing where the licenses have economic value.
· Population based licensing or other limits.
· Vaping.
· Child protection and childproofing.
· Advertising.
· Addressing areas in Alaska that do not have local
governments.
MR. JESSE urged that the Legislature not be stampeded by the
constant refrain, "The people have voted, the people have
voted." He said he does not think the people had the knowledge
of what the nine month regulatory process would mean and how
complex the marijuana issue would be. He asserted that the
Legislature would not be out of line in repealing the
initiative.
CHAIR STOLTZE asked if Mr. Jesse could provide the Legislature
with data on the percentage of the Trust's beneficiaries that
were served through addiction programs and if he can delineate
marijuana.
MR. JESSE replied that he does not have the data. He asserted
that data collection is one thing the Legislature needs to look
at and start collecting data for the initiative's health and
legal impacts.
10:53:41 AM
There being no further business to come before the committee,
Chair Stoltze adjourned the Senate State Affairs Standing
Committee hearing at 10:53 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| DCCED-ABC Presentation to (S)STA - Marijuana Implementation Jan 27 2015.pdf |
SSTA 1/27/2015 9:00:00 AM |
Marijuana |
| DH&SS - Presentation to (S)STA - Marijuana and Health Jan 27 2015.pdf |
SSTA 1/27/2015 9:00:00 AM |
Marijuana |
| DOR Presentation to (S)STA - Marijuana Jan 27 2015.pdf |
SSTA 1/27/2015 9:00:00 AM |
Marijuana |
| DPS Presentation to (S)STA - Marijuana Jan 27 2015.pdf |
SSTA 1/27/2015 9:00:00 AM |
Marijuana |
| LAW Criminal Div - Presentation to (S)STA (Revised) - Marijuana Jan 27 2015.pdf |
SSTA 1/27/2015 9:00:00 AM |
Marijuana |