Alaska Marijuana News

Alaska regulators reject first application for on-site marijuana consumption

The first application considered by the state from an Alaska cannabis retailer seeking to allow customers to use marijuana on-site failed to get approval Thursday during a meeting in which regulators wrestled with how to interpret the rules for such businesses.

The Marijuana Control Board voted 2-2 on the application from marijuana shop The Fairbanks Cut during the second day of its July meeting, convened in Fairbanks. The store sought an endorsement to allow people to smoke there in an outdoor area. A tied vote means no endorsement, though the business plans to appeal the decision, said Lily Bosshart, one of the owners.

In March, the state adopted rules that allow on-site consumption of marijuana at Alaska cannabis retailers. The Fairbanks City Council in April voted to allow smoking as well as use of edibles at such shops, and the Anchorage Assembly decided last month to allow on-site consumption of edibles, but not smoking. Retailers that want to offer on-site consumption still must get an endorsement from the state to do so.

At the center of the split vote Thursday was the issue of whether the store is located in a “freestanding” building, Alcohol and Marijuana Control Office director Erika McConnell said in an email. That’s a requirement for shops that want to offer on-site consumption, per state rules.

[On-site consumption of marijuana edibles is now legal in Anchorage. But is there any consumer demand?]

Regulations say that “freestanding” means “a building that is not supported by another structure and does not share ventilation or internal air space with an adjoining structure and smoke from the building cannot travel into the adjoining structure.”

At Thursday’s meeting, regulators discussed the fact that The Fairbanks Cut ⁠— which opened in April ⁠— isn’t the only business at its address. There’s also a construction company located there.

“Because the building in which The Fairbanks Cut is located also contains another business, the (question) was whether The Fairbanks Cut could be considered a freestanding building,” McConnell said in an email.

The business wants to fence in a parking lot and make it into an area where people can smoke, Bosshart said in an interview Thursday after the decision. She took issue with how regulators understood the rules.

“The definition of freestanding does not mention anything about sole occupancy within the building,” Bosshart said.

“Our building is all by itself in the middle of a field,” she said, “but they decided it’s still not enough.”

Beyond that store’s application, regulators at the meeting discussed what the interpretation of “freestanding” means for the industry more broadly, and how to iron out kinks in those new state rules.

“What is the standard practice when you have a new piece of legislation and it has a term or a word or a phrase that is very important to a lot of people,” said board chair Mark Springer, “but the regulators particularly who have the responsibility of framing around that statute — what is the practice to get a standard definition?”

The board voted to have Alcohol and Marijuana Control Office staff work on clarifying aspects of state regulations for on-site consumption.

The freestanding rule is “extremely prohibitive" because it’s hard to find buildings that comply, said Bosshart, who is also an owner of Anchorage cannabis store Dankorage. She worries the rule will prevent other businesses from pursuing the endorsements, and pointed to it as one reason why her business was the only one at this month’s board meeting to seek such approval.

The Marijuana Control Board typically has five members, and so can usually avoid vote ties. Earlier this year, the Legislature rejected by a single vote Gov. Mike Dunleavy’s nominee for the fifth seat.

Annie Zak

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