Alaska Marijuana News

Marijuana business applications being held up by legislative gridlock

Prospective marijuana business owner Bryant Thorp was the very first person in Alaska to get word that his cannabusiness application was complete, except for one thing -- a background check that the state doesn't have the legal authority to conduct.

In the Marijuana Control Board's March 25 letter to Thorp the agency wrote that it couldn't approve his application until his fingerprints were sent to the FBI for a national criminal background check.

"At this time, we are unable to do so," wrote director Cynthia Franklin. That's because the Legislature must write the provision into law, she wrote.

The language the marijuana board says it needs is sitting in House Bill 75, which has failed to pass both houses. On Tuesday, the Legislature appointed a conference committee -- six legislators total -- to try to reconcile the differing Senate and House versions of the bill.

The two versions are largely the same, but the Senate version contains a contentious measure to opt-out the unorganized borough from commercial marijuana, which has stalled the bill.

Thorp, who hopes to open a retail marijuana store and small growing operation in Anchorage, took the letter in stride. "It's just another punch I got to roll with … I've been expecting the unexpected," he said.

For the Marijuana Control Board, national background checks are the most important issue holding up the advancement of marijuana businesses. In a letter to business owners, Franklin mentions a separate bill creating a surety bond that she also says is needed to move forward, but board chair Bruce Schulte said that issue shouldn't have been brought up at all. It's "not a deal breaker," Schulte said, and won't stall license approvals.


Without national background checks, the board is unsure whether it will be able to license businesses, said Schulte, who said he had received conflicting legal advice about the issue.

A national background check isn't required by the ballot measure or in state statute, Schulte said, but one could argue that it is needed to satisfy the oft-cited Cole Memo, the Department of Justice's guide to states with commercial marijuana.

The national background check language was also added to Senate Bill 165 -- a bill dealing mostly with alcohol regulations -- and that bill is in the Senate Rules Committee. Schulte said he was more optimistic that HB 75 would pass than the alternate bill.

Marijuana business attorney Jana Weltzin took issue with the stalling of applications until background checks are authorized.

"I think federal background checks are a great idea," Weltzin said, but the issue is a "red herring," given that background checks aren't required by state law.

"It's creating a misconception," Weltzin said.

Last year, the Legislature passed only one bill relating to marijuana, which authorized the creation of the Marijuana Control Board. A provision added to the bill during the final days of the session prohibits anyone with a felony conviction within the last five years, or someone on probation or parole for a felony, from obtaining a marijuana business license.

"It's policy not to let criminals have marijuana licenses in Alaska," said board member Mark Springer. "So if we don't have a guarantee that somebody is not a criminal, then how, theoretically, would we be doing a service to the state by issuing licenses anyway?'

Should the bill pass, the approval of applications won't be delayed, Franklin said. The first cultivation and testing licenses are slated for approval in June. Franklin declined to comment on what would happen if national background checks weren't authorized, saying only that it needed to happen.

If the bill doesn't pass, business owners will seek legal action, Weltzin said. "The state is going to have a lawsuit on its hands. There's just no way around it."

Weltzin said that, as businesses are stalled, concern that the entire ballot measure may be repealed by the Legislature come January 2017 grows. The Legislature can't make substantial changes to a ballot initiative until two years after it passes. The industry must prove its economic impact before then, Weltzin said, and that can't happen "if we aren't given the chance."

For now, it's up to the Legislature's conference committee to take the two versions of HB 75 and create something that at least two committee legislators from both the House and Senate can agree upon, according to the legislative rules. If they can't, a second committee will be formed that will have additional powers to write a whole new bill, if needed.

On the House side, the legislators working the compromise are Reps. Cathy Tilton, R-Wasilla, Charisse Millett, R-Anchorage, and Harriet Drummond, D-Anchorage. On the Senate side, Click Bishop, R-Fairbanks, Lesil McGuire, R-Anchorage, and Lyman Hoffman, D-Bethel, an outspoken supporter of opting the unorganized borough out of commercial marijuana, will take part in the committee.

Laurel Andrews

Laurel Andrews was a reporter for the Anchorage Daily News, Alaska Dispatch News and Alaska Dispatch. She left the ADN in October 2018.