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In Anchorage, local marijuana regulations slowly take shape

  • Author: Devin Kelly
  • Updated: September 28, 2016
  • Published September 23, 2015

When selling and manufacturing marijuana is legal in Anchorage, where will pot cultivation facilities and marijuana retail shops appear? What type of advertising will be allowed? When will the businesses open and close?

These are the types of questions now confronting Anchorage city officials, five months before the state of Alaska will receive the first license applications for marijuana businesses.

For months, officials have been examining rules in other cities, particularly in Colorado, and drafting regulations. Now, Anchorage Mayor Ethan Berkowitz has formed an internal group to work through what the administration sees as the six biggest issues, according to City Attorney Bill Falsey.

Those six big issues are: licensing; land use; criminal law; public health and edibles; policies for municipal employees; and revenue, or the question of taxation. The administration has selected a lead person for each of the six different areas of focus, and Falsey said formal internal meetings began last week. Proposals are expected to be presented to the Anchorage Assembly committee that is evaluating the regulation and taxation of the cultivation, manufacture and commercial sale of marijuana; the committee has been holding meetings since December.

The effort comes as the state Marijuana Control Board works to adopt state regulations by the end of November. Falsey said the administration is planning to have local regulations in place by Feb. 24. That date marks the start of the 90-day window where the first applications will be processed to meet the ballot initiative's May deadline for initial licensing decisions.

Falsey said his office is also pulling together laws and policies passed by other cities, and putting them in front of policymakers to help guide the process.

"We can take advantage of the fact that while we're on the vanguard here, we're not first," Falsey said.

Except in the criminal law category, no draft regulations have yet been introduced, though officials said ordinances should start appearing within the next two months. But some key policy decisions are taking shape. For example, the city's elected officials appear to be interested in limiting pot grows in residential areas, and in developing a separate city license for marijuana businesses.

Local control

Cynthia Franklin, director of the state Alcoholic Beverage Control board, said the state will be leaving questions of where marijuana businesses can be located up to local government. The main requirement is that the local rules can't be less restrictive than the minimum rules ultimately set by the state. The regulations are still being drafted and due to completed by Nov. 24, the timeline set forth in the 2014 ballot initiative, Franklin said.

"The thing for everybody to understand is that we're working off long-established precedent of alcohol of local government being able to establish zoning rules around these types of establishments," Franklin said. The state won't approve a license that violates local rules, she said.

She added that in addition to Anchorage, communities around the state have formed committees to tackle local regulatory issues. Those include the Fairbanks North Star Borough, the Matanuska-Susitna Borough and the Kenai Peninsula Borough.

In the last several months, the Anchorage Assembly has passed new criminal laws relating to marijuana, such as requiring Anchorage drivers to keep cannabis in the trunk of their car. Those laws were aimed at quickly closing loopholes or aligning the city's laws with the new state statute, which legalized the personal use, possession and cultivation of marijuana, said city prosecutor Seneca Theno.

Theno said the next step from a criminal law perspective will be policy decisions, such as whether to amend the city's driving-under-the-influence laws. But she said those discussions will depend on the action of the Alaska Legislature in the upcoming session.

In the other arenas, Falsey said the city is tracking the progress on the regulation of edibles and manufacturing methods at the state level. He also said he expects proposals for city policies on marijuana use for its employees and for revenue and potential taxation to come before the Assembly marijuana regulation committee "in short order."

Meanwhile, some of the largest questions surround land use and licensing, or the regulations that will determine the appearance, hours and location of businesses and cultivation centers. Amanda Moser, deputy city clerk, and Erika McConnell, director of the city's current planning division, have been working together closely on the issue for months, ever since they and other officials took a January trip to Boulder, Colorado, to examine marijuana regulations there.

Retail and residential

At a committee meeting with Assembly members in early September, McConnell ran through a slew of questions that she's run into while drafting proposed land-use regulations.

Should commercial pot grows be allowed in residential areas? Should the Assembly have to approve marijuana licenses, like most alcohol licenses? What should the distance be between marijuana establishments and schools, child care facilities, churches and correctional facilities? What about allowing retail marijuana shops downtown?

McConnell got some questions answered quickly. Assembly members agreed that retail marijuana shops should be allowed downtown, just as bars are allowed downtown. There was also interest in expanding the list of places where a certain separation distance will be required. The state's draft regulations include a required distance of 200 feet between marijuana establishments and facilities providing services to children, such as schools or day cares; buildings where religious services are conducted; and correctional facilities. The Assembly could decide to add other restrictions.

"Personally, I don't think there should be a pot shop next to a gun shop," Assembly member Amy Demboski said during the meeting.

Assembly members have not yet weighed in on the topic of allowing social clubs, saying the city should wait until the state adopts its own regulations. If the state outlaws social clubs, as has been proposed, the city can't make them legal, said Assembly member Ernie Hall, the chair of the Assembly's marijuana taxation and regulation committee.

It also remains to be seen whether Anchorage would allow a proposed "limited" license for businesses with fewer than 500 square feet of cannabis plants.

On the big-picture topic of commercial pot cultivation, however, McConnell said she walked away from the meeting with a consensus.

"The comments from Assembly members made it relatively clear ... that they support limiting grow operations in residential areas," McConnell said.

That means the regulations will likely seek to restrict large commercial pot cultivation operations to areas zoned for industrial uses, a demand that the city included in a recent assessment of Anchorage's industrial land. The assessment found that demand for Anchorage industrial space for pot manufacturing will range from about 400,000 to 514,000 square feet of industrial warehouse building space, or between about 40 to 50 acres of industrial land.

New industrial spaces may be built to accommodate a local commercial grow industry, and most of the city's vacant industrial land is located in Chugiak-Eagle River. But Tom Davis, a city planner, wrote in an email that it's actually more likely that the marijuana industry will look for existing industrial spaces for financial reasons, based on trends in cities like Denver.

"Denver's experience has been that the marijuana industry has strongly preferred low-cost, existing industrial space," Davis wrote in the email.

A local license

At the same time, Moser, the deputy city clerk, is working on a local license for marijuana establishments. She said she's been reading through the draft state regulations to find places where the Assembly may want to decide on more restrictive requirements.

As McConnell did earlier this month, Moser plans to gather feedback from Assembly members on licensing-related questions at a Thursday Assembly committee meeting. Whether there should be a limited number of marijuana establishment licenses available, whether the Assembly should require inspections of the facilities and whether fines should be introduced for violations are among the issues Moser said she plans to bring up.

There are comparisons between the evolving marijuana licensing process and the licensing of local alcohol establishments. Anchorage does not issue its own alcohol licenses, and Moser said that has sometimes made it more difficult to crack down on problem operators. She said that's part of the reason the city is interested in developing a dual licensing system when it comes to marijuana.

"With liquor licenses, there's been times where we've run into challenges with operators, and it's not always been easy to address those concerns," Moser said. A local license would allow city code enforcement officers to inspect businesses and verify that local laws are being followed, Moser said. She added that she wasn't yet sure what form a license revocation or suspension would take.

Franklin, the director of the state alcohol control board as well as the marijuana board, observed that there are long-standing tensions between state and local government when it comes to alcohol regulation. She said she doesn't expect that to change.

"That tension is age-old, and will continue to exist and follow us into marijuana," Franklin said.

Moser said her goal is to start introducing draft ordinances within the next two months, though she added that it's challenging when the state's regulations are also still in draft form. She said Assembly members do want there to be plenty of time for public feedback.

Hall, the chair of the Assembly subcommittee on marijuana regulation, said he's pleased with the progress the city is making so far.

"When marijuana becomes legal for people to do business ...we're going to be ready," Hall said.

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