Alaska Marijuana News

In a first, a Fairbanks cannabis shop has been shut down by the state

Frozen Budz products displayed at co-owner Destiny Neade’s Fairbanks home in May 2016. Some product names were later changed. (Laurel Andrews / ADN)

In 2016, Frozen Budz was the first marijuana shop in Alaska to be approved by the state marijuana board. On Friday, it became the first cannabis retailer to be shut down by the same entity.

Frozen Budz is now closed after the Marijuana Control Board unanimously voted to revoke its license, according to Alcohol and Marijuana Control Office director Erika McConnell.

The decision stemmed from allegations that the company falsified records, sold untested products to consumers and sold edibles that had no THC at all.

Among the accusations: The state said that Frozen Budz's storefront sold 13,006 edibles that were never tracked.

"There is no record of when (the edibles) were made or what … was used to make them, nor have they been tested," McConnell wrote in a memo to the board.

Frozen Budz also knowingly sold "Hazy Butter Cookies" that were tested and found to have no THC.

"While I don't have the packaging for any of this product, each cookie was sold for around $20, so I feel quite sure that the label indicated that there was 5 mg of THC in the cookie," McConnell wrote in the memo.

The shop was located in a newly-built Quonset hut on Peger Road in an industrial part of Fairbanks.

Along with the cannabis shop license, co-owners Nicholas and Destiny Neade's marijuana handler permits were revoked. They can reapply for a new license and new handler permits in one year, according to McConnell.

The owners can appeal the decision to the Office of Administrative Hearings, McConnell said.

The Neades didn't reply to requests seeking comment. The shop's WeedMaps page, updated on Sunday, said the store was "closed until further notice."

Frozen Budz had a retail store license and a license to manufacture marijuana products. The company was one of only a few statewide that was making cannabis edibles.

As a manufacturer, Frozen Budz created a variety of edibles infused with THC, the psychoactive ingredient in marijuana – everything from chai tea and blueberry jam to banana bread and brownies.

But in December, the company's manufacturing license was suspended after the Marijuana Control Board was tipped off that Frozen Budz was selling edibles with 2 to 3 times the allowable amounts of THC.

In Alaska, edibles are capped at 5 milligrams of THC per serving, up to 50 milligrams of THC per package.

The tip "opened up this entire can of worms," McConnell said in December.

From there, investigators found that Frozen Budz had sold tens of thousands of untested products, some of which had far more THC than was allowed; other products were sold with no THC, according to the state office.

Among other allegations, former workers said that the company had used moldy marijuana to make edibles, and that employees would use cannabis while on the job.

In December, the Alcohol and Marijuana Control Office warned consumers that it believed more than 100,000 edibles had been sold in marijuana shops around Alaska without being tested, and that banana bread tested by the state had far more than the allowable THC, and tested positive for mold.

Destiny Neade of Frozen Budz claps and is cheered on by the crowd after being approved for a marijuana retail store license on Sept. 8, 2016. (Laurel Andrews / ADN)

On Dec. 15, Frozen Budz was fined $500,000 and stripped of its manufacturing license.

In September 2016, Frozen Budz became the first marijuana shop approved by the Marijuana Control Board.

"We're excited, we're ready to open and ready to bring the voter initiative to life," Destiny Neade said at the time.

Now, the shop is the first one shut down by the state board, McConnell confirmed.