HB 289-AK MARIJUANA INDUSTRY TASK FORCE 4:50:22 PM CO-CHAIR FIELDS announced that the final order of business would be HOUSE BILL NO. 289, "An Act establishing the Alaska marijuana industry task force; and providing for an effective date." 4:50:30 PM CO-CHAIR FIELDS opened public testimony on HB 289. 4:50:40 PM BELINDA "DOLLY" PHELPS, stated she is a licensed [marijuana] cultivator. She said she supports the introduction of HB 289 because the need for a state legislative marijuana task force is long overdue and such a workgroup will offer solid recommendations for change in the marijuana industry, especially concerning the crippling tax structure that is being experienced. She expressed her support of the hard work done by the Alaska Marijuana Industry Association (AMIA) to get the bill heard. MS. PHELPS drew attention to Section [1(b)(6)] of the bill which states that the AMIA shall choose three industry members for the board, two of which must be AMIA members. She stated that this is highly inappropriate because all licensees should have an equal opportunity to participate on a state legislative task force. Task force members, she continued, should be chosen fairly and equally among the industries they represent based on merit, not affiliation or membership with any certain club or group. She said the members of the Marijuana Control Board should choose the three industry representatives as this board is by far the most qualified to do so. She suggested that the language in Section [1(b)(6)] be changed to read, "three members representing cultivation, manufacturing, and retail cannabis businesses appointed by the Marijuana Control Board members, and each of whom resides in a different judicial district". 4:52:23 PM REPRESENTATIVE MCCARTY inquired about the number of marijuana associations existing in Alaska. MS. PHELPS replied that there's one association, but she doesn't know the number of members. However, she added, when talking about a state marijuana task force to deal with the state's marijuana industry, everyone in the industry should have the opportunity for their voices to be heard without having to be a member of a certain group or club. REPRESENTATIVE MCCARTY asked whether Ms. Phelps has a suggestion for what the three "zones" would look like. MS. PHELPS responded that the Marijuana Control Board is by far the most qualified to choose from industry members around the state who have put their names in the hat. She pointed out that the Marijuana Control Board has firsthand information on an industry member's merit related to comprehension of the industry and whether the industry member has been operating several years with no violations, payment of taxes on time, and no unpaid taxes, thereby making them a good candidate for the task force. 4:54:16 PM RYAN TUNSETH, Owner, East Rip, testified in support of HB 289. He noted that East Rip is a marijuana [dispensary] business and stated that taxation is the most divisive issue within the industry as well as the most division issue that the [Marijuana Control Board] must deal with. The tax is very broad in its applicability and can potentially shape the landscape that the industry will be in should federal legalization happen. There has now been enough run time to do this technical deep dive. While it is unknown what the exact answers are, it is known that it's a problem and barriers have been run into with some of the technical professionals and access to data through the Department of Revenue. So, this really seems like a ripe-for- discussion issue and very wise to support. 4:55:39 PM CO-CHAIR FIELDS closed public testimony after ascertaining that no one else wished to testify. 4:55:53 PM REPRESENTATIVE NELSON moved to adopt Amendment 1, labeled 32- LS1317\B.1, Radford, 2/12/22, which read: Page 2, line 30: Delete "and travel expenses" Page 3, line 1, following "meet": Insert "by telephone or other means of communication that ensures all members participating can hear each other during the meeting" Page 3, following line 5: Insert a new subsection to read: "(f) A meeting of the task force may not take place in person." Reletter the following subsections accordingly. 4:55:56 PM CO-CHAIR FIELDS objected for purpose of discussion. 4:55:59 PM REPRESENTATIVE NELSON explained that, after conversing with the bill's sponsor, Amendment 1 would move the task force's meetings from in-person to online. It was heard in public testimony that meetings are already occurring online, he continued, so the $100,000 in travel cost in the fiscal note could be better used somewhere else. CO-CHAIR FIELDS invited the bill sponsor to comment. 4:56:36 PM JOE HARDENBROOK, Staff, Representative Grier Hopkins, Alaska State Legislature, replied that the sponsor has reviewed Amendment 1 and based on conversations with Mr. Glen Klinkhart, director of the Alcohol and Marijuana Control Office (AMCO) in the Department of Commerce, Community, and Economic Development (DCCED), it seems that this would not be a huge liability for the task force moving forward. 4:57:11 PM CO-CHAIR FIELDS removed his objection to the amendment. There being no further objection, Amendment 1 was adopted. 4:57:22 PM CO-CHAIR SPOHNHOLZ moved to adopt Conceptional Amendment [2], which read as follows [original punctuation provided]: Page 2, line 10 Following "following" Delete "12" Add "13" Page 2, line 24 Following "senate" Delete "and" Page 2, line 26 Following "representatives" Delete "." Insert "; and (9) a public health professional appointed by the governor." 4:57:24 PM CO-CHAIR FIELDS objected for discussion purposes. 4:57:26 PM CO-CHAIR SPOHNHOLZ explained that Conceptual Amendment [2] would add to the marijuana industry task force a public health professional appointed by the governor. This is similar to the Marijuana Control Board that already has a public health member, she noted. Since the committee has just eliminated travel, this proposal would not add any fiscal note to the bill. She said it is important that a public health member be a part of the conversations as changes in policy are considered, given the implications of marijuana use on public health. CO-CHAIR FIELDS invited the bill sponsor to comment. MR. HARDENBROOK responded that he doesn't know the sponsor's opinion on Conceptual Amendment [2]. 4:58:20 PM REPRESENTATIVE NELSON said he understands the reason for a public health professional on the Marijuana Control Board but asked what the purpose would be of having a public health professional on a marijuana industry task force that is supposed to be looking at taxes. CO-CHAIR SPOHNHOLZ answered that, without a public health professional, there would be a lack of expertise in considering the way that taxation impacts consumption. A public health member would not be an opponent necessarily of the marijuana industry, she continued, but it is known that there is a correlation and sometimes causation between taxes and consumption, so it is an important viewpoint to have expressed on the [task force]. It would be one member out of thirteen and would bring important expertise as the [task force] makes recommendations to the full board. 4:59:38 PM CO-CHAIR FIELDS removed his objection to Conceptual Amendment [2]. REPRESENTATIVE SCHRAGE objected to Conceptual Amendment [2]. 4:59:51 PM A roll call vote was taken. Representatives Snyder, Fields, Spohnholz, and McCarty voted in favor of Conceptual Amendment [2]. Representatives Schrage, Nelson, and Kaufman voted against it. Therefore, Conceptual Amendment [2] was adopted by a vote of 4-3. 5:00:46 PM REPRESENTATIVE MCCARTY related that several people involved in the cannabis industry in his district have voiced concern about who is the [AMIA]. He said it's an interesting point in the public comment of having assured zones [judicial districts] for these people coming from the association. He said he has asked people in his district about how many associations exist and it is still a question out there and whether there needs to be zones [judicial districts]. CO-CHAIR FIELDS commented that he heard those concerns too and wondered if someone would do an amendment. He said his personal view is that it's beneficial for the industry to self-organize and take the time to represent itself through an organization, so he is comfortable with that construct and moving the bill forward as it is. If members of the committee are comfortable with moving the bill forward, he continued, it can be seen how it is treated in the House Finance Committee, but if members want to change the construct the bill can be held to do that. 5:02:36 PM MR. HARDENBROOK addressed Representative McCarty's concern. He said the bill as written anticipates that there would be three members of the marijuana industry appointed to serve on the task force, two of which would be members of the Alaska Marijuana Industry Association (AMIA). He explained that AMIA is similar to the Alaska Cabaret, Hotel, Restaurant and Retailers Association (Alaska CHARR), a statewide membership organization for businesses that sell alcohol. Like CHARR, AMIA does not represent all members of the industry, but it is the existing statewide organization. As well, he continued, the bill as written requires that one of the folks appointed by AMIA be a non-member of AMIA. Additionally, those three appointees must come from separate Alaska judicial districts, a requirement for geographic diversity in representation. REPRESENTATIVE MCCARTY drew attention to page 2 of the bill, lines 20-23, and noted that several people with whom he spoke didn't know who the Alaska Marijuana Industry Association is and were concerned that it was a select area of the state rather than representing all the state. He explained he was wanting assurance that the provision to reside in different judicial districts is indeed the case. 5:05:17 PM CO-CHAIR SPOHNHOLZ moved to report HB 289, as amended, out of committee with individual recommendations and the accompanying fiscal notes. She further moved that the Alaska Legislative Legal Services be able to make conforming and technical changes as needed. There being no objection, CSHB 289(L&C) was reported from the House Labor and Commerce Standing Committee.