Alaska Marijuana News

Marijuana board strengthens Alaska pot business residency requirements

Reversing an earlier decision, Alaska's Marijuana Control Board restored more stringent residency requirements for those hoping to take part in the state's commercial cannabis industry during a brief meeting Tuesday morning.

The amendment adopted Tuesday reverts Alaska residency requirements to Permanent Fund dividend eligibility, which, among other qualifications, requires a person be physically present in the state.

After little discussion, the amendment passed unanimously.

The decision comes after much back and forth regarding how the fledgling legal cannabis industry should take shape in Alaska.

The first draft of Alaska marijuana regulations matched residency to PFD requirements. But at its meeting on Nov. 20, the board changed the residency requirement to match voter registration, which is far easier to achieve, requiring only a physical address in the state and no voter registration elsewhere.

That decision was met with shock and concern by both the state and industry supporters. The next business day, the board announced it would meet again to review the last-minute change.

Board member Bruce Schulte said Tuesday that the voter registration requirement may have "inadvertently" put staff in a position where they did not have the resources to conduct needed background checks.


A second amendment was also introduced Tuesday morning that would have allowed for 12.5 percent Outside investment in Alaska businesses. Under the current regulations, Alaska marijuana businesses must be 100 percent Alaskan-owned.

Board member Brandon Emmett said "a small infusion of Outside money to help the industry get off the ground in general is going to be positive."

Assistant attorney general Harriet Milks stopped the board after Emmett explained the amendment.

"It's the Department of Law's position that this is outside the scope of the public notice for this meeting, therefore it shouldn't be discussed," Milks said.

The public notice, which said the board would "discuss and may amend residency requirements" Tuesday, didn't include proper notice for discussion of Outside ownership, she said.

Other board members agreed, and noted that the issue could be discussed during the board's next meeting in February.

The brief meeting was quickly adjourned.

The state's closed door to Outside investment and ownership is most closely aligned with Washington and Colorado, two states where recreational marijuana use is also legalized.

In Washington, all businesses and investors must be residents for at least six months, according to Washington State Liquor and Cannabis Board spokesperson Mikhail Carpenter.

In Colorado, there's a two-year residency requirement for all owners and investors. Employees must be residents when they apply. However, in May, Colorado made changes to the law that appear to crack open the door to outside investment.

In Oregon, another state where marijuana is legal, the laws are more open to outside investment -- allowing for 49 percent ownership by an individual who isn't a resident, according to Mark Pettinger, spokesperson for the recreational marijuana program with the Oregon Liquor Control Commission.

Residency requirements are seen as a way of safeguarding against federal interference, as federal authorities have made clear that states should be able to account for all the legal marijuana money flowing in the state.

The oft-cited Cole Memo -- a 2013 memo from the Department of Justice giving guidance on federal marijuana policy -- lists eight items that states are asked to prioritize, with preventing legal marijuana revenue "from going to criminal enterprises, gangs, and cartels" among them.

The state of Alaska has argued that it doesn't have the staff or resources to conduct background checks on applications from Outside investors, one of the reasons that Outside investment was rejected by the board last month.

Some have argued that even with 100 percent Alaskan ownership, Outside businesses will find loopholes allowing them to invest in Alaska's cannabis industry.

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.