PALMER — Smaller marijuana cultivators are now exempt from strict property setbacks in Mat-Su, a change some say will help the Valley's longtime illicit neighborhood growers move from the black market into legal sales.

Others, however, say the change doesn't go far enough to promote the growth of a major commercial marijuana industry.

Mat-Su, with its fertile soils and proximity to urban centers of demand, has long been viewed as Alaska's pot cultivation capital. But growers outside the city of Houston fell under a monthslong commercial marijuana moratorium in 2016 and are just now beginning to get underway amid a statewide legal marijuana supply shortage.

In what critics called another challenge to cannabis businesses here, borough regulations adopted in August for legal marijuana included a 100-foot setback from adjacent side or rear lot lines, and 50 feet from roads.

Planning officials say given the borough's lack of formal zoning, that was the only way to safeguard residential neighborhoods from being inundated with commercial marijuana businesses.

The setbacks are stricter than those in state law, which require marijuana establishments be more than 500 feet from a school, recreation or youth center or correctional facility.

The Matanuska-Susitna Borough Assembly on Tuesday added an amendment to the borough ordinance that exempts operations with less than 500 square feet of marijuana under cultivation on any one parcel.

The new change could benefit about 20 applicants for state limited-cultivation licenses in Mat-Su outside Houston, which regulates marijuana independently. State law defines limited-cultivators as those with fewer than 500 square feet under cultivation.

But there are nearly that many applicants in the borough for larger, standard cultivation licenses.

The looser setbacks won't help growers like Thomas Hannam, who told the Assembly Tuesday he wants to open a "very commercial" 24,000-square-foot operation near Wasilla on property he bought 30 years ago.

Hannam said he sank more than $700,000 into the investment after a borough planner two years ago told him he was good to go. The adjacent property that's within the setback distance is "swampland and trees," he said, and his neighbors are farmers and are cannabis-friendly.

The setback requirement "really put a hindrance on me, my livelihood and my life," he said. "Abolish it and put the state's (requirements) in its place."

But Kerby Coman, who owns Green Degree, a retail and limited-cultivation business on Knik-Goose Bay Road outside Wasilla, supported the amendment. Coman said he's paid a $3,500 monthly lease for the past year, waiting for the dust to settle in the battle over borough regulations.

Coman noted the Valley's long history with cannabis and said the change will give in-house operators selling on the black market easier access to the regulated arena.

"No matter where you live, odds are you have a cultivator in your neighborhood," he said.

The Assembly also approved another amendment that allows a contentious Talkeetna retail store on Main Street to proceed with obtaining a state license without filing a conditional-use permit at the borough level.

The change will let at least one business — The High Expedition — make use of a regulatory oversight that allows marijuana businesses within special land-use districts to avoid the borough conditional-use permit process normally required for potentially controversial developments.

High Expedition co-owner Joe McAneney said Thursday he hopes to go before the Marijuana Control Board by early April for approval.

McAneney previously said he had always planned to file a conditional-use permit regardless of what code required. On Thursday he said he no longer intends to because of multiple errors made by the borough.

The language in borough code that eliminated special-use districts from the permit process was supposed to be fixed at a December Assembly meeting but a problem with public notice delayed the decision.

A number of angry Talkeetna residents testified unsuccessfully at Tuesday's meeting in opposition to any change that would allow a retail marijuana business on Main Street and near a park.

But Susitna Valley Assembly members Randall Kowalke and Dan Mayfield noted the Talkeetna Chamber of Commerce and community council supported the business.

The borough last summer removed from the original draft of its regulations a 500-foot setback from parks that would have basically eliminated any marijuana facilities in Talkeetna, development services manager Alex Strawn said at Tuesday's meeting.