HB 123-ESTABLISH MARIJUANA CONTROL BOARD  3:22:45 PM VICE CHAIR HUGHES announced that the only order of business would be HOUSE BILL NO. 123, "An Act establishing the Marijuana Control Board; relating to the powers and duties of the Marijuana Control Board; relating to the appointment, removal, and duties of the director of the Marijuana Control Board; relating to the Alcoholic Beverage Control Board; and providing for an effective date." 3:23:19 PM REPRESENTATIVE TILTON moved to adopt the proposed committee substitute (CS) for HB 123, labeled 29-GH1110\W, Martin, 3/14/15, as the working document. VICE CHAIR HUGHES objected for the purpose of discussion. 3:23:39 PM KONRAD JACKSON, Staff, Representative Kurt Olson, Alaska State Legislature, on behalf of the House Labor & Commerce, Representative Kurt Olson, Chair, explained the changes in the proposed committee substitute (CS) for HB 123, Version W. He directed attention to page 2, line 8, and stated this would add additional language, "as a regulatory and quasi-judicial agency." He explained that this language was taken from AS 04.08 related to the Alcoholic Beverage Control Board (ABC Board) since the department envisions the marijuana program will be similar to the laws for regulating alcoholic beverages. 3:25:31 PM MR. JACKSON referred to page 2, lines 20, which would reformat language, such that the language from proposed AS 17.38.080(b) and (c) was combined into subsection (b) and definitions were added to subsection (h) [on page 3]. MR. JACKSON stated that technical amendments were made on page 2, lines 21-29, including renumbering. In addition, technical changes were made on page 3, lines 3-5, to subsection (g), and on page 3, line 8, "title" was replaced with "chapter" to reflect that Title 38 contains other sections of law. MR. JACKSON directed attention to page 3, lines 10-13 to the definition added to subsection (h) for "marijuana industry." 3:27:15 PM MR. JACKSON turned to page 3, lines 28-29, which would add the language "... within 30 days by appointment of the governor for the unexpired portion of the vacated term." The intention was to have the governor fill any vacant positions as quickly as possible, he said. 3:27:36 PM MR. JACKSON referred to page 4, lines 6-9, to language added from AS 04.06.050 that would require the board to meet at least once each year in each judicial district. This language was necessary in order to consider the need to modify existing regulations with respect to local issues in each jurisdiction, he said. MR. JACKSON directed attention to page 4, lines 11-13 and lines 29-31, which would incorporate several technical drafting style changes. In addition, on line 11 the word "all" was deleted. MR. JACKSON turned to page 5, lines 14, which would add two new subsections, noting that subsection (f) would require notifying municipalities and licensees of regulations and statute changes. MR. JACKSON directed attention to page 5, lines 21-24, which would add new language to allow the Marijuana Control Board (MCB) the authority to deal with prostitution and sex trafficking. MR. JACKSON referred to page 6, line 5, a technical drafting style change. He directed attention to page 6, lines 22-23, which would add a sunset date for the proposed Marijuana Control Board (MCB) of June 30, 2018 to match the proposed sunset date for the Alcoholic Beverage Control Board (ABC Board). 3:31:27 PM MR. JACKSON referred to page 7, lines 1-15, to language that would require membership of the proposed Marijuana Control Board (MCB). This provision would require the governor to appoint two members from people who have alcohol industry experience, retail or wholesale, whose terms would end in two years. He related the rationale used, that the people in the alcohol industry have sufficient knowledge of the regulatory process and oversight activities of the ABC Board and since the two industries and boards parallel one another, it made sense to allow them to serve. Another concern was that the bill allowed membership from the lawful practice in the marijuana industry, yet the state doesn't have a "lawful" practice. He expressed concern that the proposed Marijuana Control Board (MCB) might not have a sufficient pool of appointees to choose from. MR. JACKSON referred to page 7, line 10-13, to a technical drafting style changes to conform to the legislative drafting manual style. 3:33:59 PM REPRESENTATIVE KITO, in reference to the meetings in the judicial districts, asked how many board meetings the proposed Marijuana Control Board (MCB) anticipated it will hold and if the meetings would be monthly or quarterly meetings. He asked whether it would adequately provide opportunities for everyone to participate. He related his understanding there were four judicial districts and wondered if there will be standing meetings in each one of the judicial districts the quarterly meetings or if the board anticipated it will meet monthly. MR. JACKSON deferred to the executive director of the Alcoholic Beverage Control Board (ABC Board) to answer. 3:35:26 PM CYNTHIA FRANKLIN, Executive Director, Alcoholic Beverage Control Board (ABC Board), Department of Commerce, Community & Economic Development (DCCED), stated that the Alcoholic Beverage Control Board (ABC Board) currently meets five times a year, once in each of the [judicial] districts, with an additional meeting in Anchorage due to the volume of liquor licenses. She said the meetings are roughly quarterly meetings that are held in Juneau, Anchorage, Fairbanks, and Western Alaska - generally in Nome, followed by the additional meeting in Anchorage on December. These meetings are set at the previous meeting so the times vary, depending on the schedules of the five volunteers. She stated that the meetings are adequate for the ABC Board to address any issues that have arisen as well as any community needs. She anticipated that if HB 123 passes that the Marijuana Control Board will meet in conjunction with the ABC Board - a one-day meeting for the ABC Board followed by a one-day meeting for the Marijuana Control Board (MCB) - to save travel funds for staff travel. For the past three meetings the ABC Board has had two-day meetings to address some of anticipated issues, she said. 3:37:48 PM REPRESENTATIVE KITO asked whether there may be a significantly larger number of marijuana license requests that may require additional meetings. MS. FRANKLIN answered that at this time it was uncertain as to how many licenses will be requested; however, the division anticipates the potential need for additional meetings in the first year or two. Certainly, to initially set up a program may require more frequent board meetings. She said that the statutory language in Title 4 does allow the Alcoholic Beverage Control Board to meet at the call of the chair. She anticipated the division would either promulgate regulations or the Alcoholic Beverage Control Board (ABC Board) will call for additional meetings, if necessary. 3:38:54 PM REPRESENTATIVE JOSEPHSON, referring to Version W, related his understanding that the proposal was to postpone a representative from the marijuana industry for a time, perhaps up to two or three years. He asked for her opinion since regulations would be formed during that time. Further, he asked whether any loss of expertise would result as a consequence. He directed attention to the powers and duties of the board [on page 4, beginning on line 14], which read, "(a) The board shall control 6 the cultivation, manufacture, and sale of marijuana in the state. The board is vested with the powers and duties necessary to enforce this chapter." He asked whether any benefit could result from having people who have studied these issues to immediately serve on the board. MS. FRANKLIN answered that the Alcoholic Beverage Control Board (ABC Board) supports having a voice on the board chosen specifically for marijuana knowledge; however, the board was not opposed to having a voice from the alcohol industry, with a regulatory perspective, serve in the first two years. In fact, the board recognized that someone with alcohol industry experience will understand the unique position of operating businesses in a highly regulated atmosphere, but she has encountered people who clearly have significant knowledge of marijuana. Certainly the cultivation aspects of marijuana was different from the alcohol industry, she said. 3:41:05 PM REPRESENTATIVE JOSEPHSON asked whether someone could be a law abiding citizen but still know a tremendous amount about the industry, in particular, due to significant information available on the Internet or by having attended conferences in the Lower 48. MS. FRANKLIN agreed that a lot of information was available. She pointed out that personal cultivation has been legal in Alaska since 1975 so some individuals in Alaska are knowledgeable about marijuana cultivation since they have personally grown it. In response to a question, she stated that the Alcoholic Beverage Control Board (ABC Board) has been on a three-year sunset rotation, that the ABC Board is due to sunset June 30, 2015, and HB 116 provides for an extension until June 30, 2018. 3:42:09 PM VICE CHAIR HUGHES asked for further clarification on whether the sunset date was set in statute and if it is always three years or if it changes. MS. FRANKLIN answered that a new date was set each time the ABC Board is up for renewal, but the pattern has been to extend the board three years. 3:43:34 PM MR. JACKSON offered that all boards are subject to sunset and prior to the sunset date the legislative audit reviews how well the board is functioning and makes recommendations to the legislature. In some instances, boards are extended up to eight years, but the sunset date varies on a case-by-case basis. He suggested that although the ABC Board has been extended for three years, it may not always be extended for three years. 3:44:30 PM REPRESENTATIVE COLVER referred to page 5, line 15, to proposed Section 17.38.085, enforcement powers, which read: The director and the persons employed for the administration and enforcement of this chapter may, with the concurrence of the commissioner of public safety, exercise the powers of peace officers when those powers are specifically granted by the board. REPRESENTATIVE COLVER said this proposed section goes on to say the board can enforce sex trafficking and prostitution. He asked whether it was typical in [Title 4] statues related to alcohol to grant powers of peace officers to the division's staff. MR. JACKSON answered yes. He stated that the language on page 5, lines 21-24 in Version W was language taken straight from the statutes governing alcoholic beverages. 3:46:12 PM REPRESENTATIVE COLVER asked whether that was at request of the department or if it was language developed by the committee. MR. JACKSON answered that the language was added in Version W by comparing the statutes pertaining to the ABC Board and drawing a parallel between the alcohol statutes and the proposed marijuana statutes. 3:46:57 PM REPRESENTATIVE COLVER assumed standards since the only qualifications of the enforcement staff was the language in this proposed section, " ... with the concurrence of the commissioner of public safety ...." He assumed this language did not empower a security guard with the ability to enforce state laws. He said he would feel more comfortable with enforcement being done by enforcement officers with qualifications using the standards for certified police officers. He suggested that this provision might need to be tweaked. MR. JACKSON deferred to Ms. Franklin. MS. FRANKLIN answered that the five enforcement officer currently employed by the ABC Board are licensed peace officers commissioned by the commissioner of public safety to enforce the alcoholic beverage laws. The requirements are set in the State of Alaska's job description for Investigator III and IV. These officers receive a commission in connection with this job since they are not granted general police officer powers granted to local law enforcement officers or troopers. She agreed with Mr. Jackson, that this language was derived from language in AS 04, more specifically from AS 04.06.110, which has been in effect since 1980. She characterized the five officers as extremely professional and these officers tend to come from a pool of retired active duty police officers. 3:49:51 PM VICE CHAIR HUGHES said she maintained her objection to adopting the proposed committee substitute for HB 123, Version W. VICE CHAIR HUGHES announced that HB 123 would be held over.