Alaska Marijuana News

Commercial marijuana is almost here, and Alaska's government is feeling the strain

A state government that's already lost hundreds of jobs this year is grappling with how to balance that with the workload that comes with the emergence of an entirely new industry: marijuana.

Some Alaska municipalities have a plethora of questions about rules for new marijuana businesses — how to measure the distance from a business to a church? What types of signs can entrepreneurs have? — and the state's Alcohol and Marijuana Control Office doesn't have the time or resources to answer every one. Meanwhile, the digital paperwork for new marijuana business applications just keeps rolling in.

Sarah Daulton Oates, a program coordinator at the Alcohol and Marijuana Control Office, said that the staff of 15 people (plus a director) has been shorthanded in trying to keep up with all the inquiries and applications.

"It's a ton of work," Daulton Oates said. "We've had a lot of pressure with local governments who are trying to figure out how to write their own laws."

That's even after initially gaining six staff members at her office since Ballot Measure 2, legalizing recreational marijuana, passed in 2014. That's still short of the 10 they wanted, but they might be fortunate to have added staff at all — monthly employment estimates from the Alaska Department of Labor and Workforce Development show that state government on the whole lost 1,400 jobs between July 2015 and July of this year.

[Alaska attorney general: Marijuana social clubs are illegal]

The state has received about 104 marijuana license applications so far, from cultivation facilities to retail shops to testing facilities, and overall about 420 applications have been started in the state's online system.


The result? Much less time to help people one-on-one. There are "mountains of paperwork," both digital and hard copy, Daulton Oates said, for marijuana and alcohol license applications. Her office has a handful of investigators that conduct enforcement and inspections for about 1,900 liquor licenses around the state, and they now handle marijuana facilities as well.

People with questions about getting a license often can't get quick help just from showing up at the state's office, like many used to do with liquor license questions.

"We would sit down with them for an hour and go through the entire application process start to finish, help with paperwork, do all those kinds of things, spend a lot of time with individual licensees, just with no notice," Daulton Oates said, referring to the time before marijuana applications started rolling in. "And that has changed substantially."

An email exchange between the Alcohol and Marijuana Control Office and local government in Sitka exemplified the tensions that can arise over a simple question. A municipal clerk there emailed the state office, asking, "What is the procedure a municipality would follow if they need additional time, beyond the 60 days, to consider a license?"

Daulton Oates responded to the email explaining that her office had received "dozens of phone calls and emails" from Sitka city staff and legal counsel, that there was no time to answer questions and that she was "requesting and requiring" the city's staff to use online resources instead of asking the state to "do the grunt work for you."

Sitka Municipal Administrator Mark Gorman said that exchange happened at a time when tensions were running high at the state's Marijuana Control Board, and it "wasn't reflective" of the city's typical interactions with the state.

And it's not just little Sitka, with about 8,863 people in the city and borough, that has a lot of questions. The state's largest city, with far more resources, is grappling with legalization too.

"There is a bit of, 'Drop anything else you're doing and figure out this one question because we have to have this ready to go to the Assembly,' or the applicant is ready to sign a lease and they need to know the answer," said Erika McConnell, marijuana coordinator at the Municipality of Anchorage's Office of Economic and Community Development. "And so there is a certain type of urgency with the things that come up. It's not like, 'Oh, I'll get back to you in two weeks,' that sort of thing."

Other cities in states where marijuana is legal have added positions to specifically address pot, such as Denver, McConnell said. In 2014, Denver hired an additional 37 employees to handle the regulation of marijuana and enforcement of policies, according to a presentation from a marijuana symposium last year.

But Anchorage, McConnell said, "has only done a minuscule bit of that. Everyone is adding this on to their existing workload."

[Alaska has yet to see a legal pot sale. But some banks are already shutting down accounts.]

Terry Schoenthal, current planning manager at the Municipality of Anchorage, said his department is "inundated," tasked with inspecting virtually every site in the city where someone wants to set up a marijuana business. Would-be entrepreneurs are required to put together a plan for what the locations will look like, but frequently, Schoenthal said, "the site plans aren't all that great — sometimes they're hand-drawn." 

The workload is made heavier by the fact that some people might be trying to set up shop in places like warehouses, spots that might not be as common for business.

"The cases are complicated," he said. "They're trying to go to places where a business typically wouldn't go, a run-down building that isn't in great shape or a variety of things, and you might need to address parking, have to bring it up to code. You have to submit a site plan, and most of these guys have never had to do that. There's a great deal of hand-holding on our side as well in that process."

Because it's early on in the days of a new industry, he said, prospective marijuana businesses are also getting "extra scrutiny," which makes for more work.

Bryant Thorp is planning to open a marijuana cultivation site and retail shop called Arctic Herbery at Arctic Boulevard and 71st Avenue in Anchorage. He said that even though some of his questions have sent him bouncing back and forth between the state and the city trying to find answers, it's been a smooth process overall.

"It's new to everybody," Thorp said. "They help you out the best they can. They're understaffed and they have hundreds of applications."


Daulton Oates said her office also had to create an entirely new electronic application system for marijuana, which was "an unforeseen time-taker." She also said they simply can't answer hypothetical questions from hopeful marijuana entrepreneurs.

"There were people who were like, 'What if I want to install this type of camera system?' We really can't answer hypothetical questions," Daulton Oates said. "A lot of people want to know, is the board going to approve this or not? It seems like it's hard for a new industry to understand, we're just the staff. We're not making determinations of what is going to be acceptable to the board."

Schoenthal is looking forward to the workload evening out in the future.

"These are really interesting times. If someone told me three or five years ago that I'd be reviewing marijuana applications, I would have told them they were crazy," he said. "There's a glut right now but I think it'll lighten up."

Annie Zak

Annie Zak was a business reporter for the ADN between 2015 and 2019.