A medical marijuana facility in Anchorage shut its doors Monday after the state warned that it would take enforcement action against the business.
AK Hydro Gardens closed on Monday morning, owner Ryan Smith said.
The company billed itself as a medical marijuana cultivation center. Medical marijuana cardholders would apply to have their plants grown in the Anchorage facility, and would pay a membership fee for the business to maintain their plants.
On the company's website, Smith wrote that the business had been advised that "if we continue to grow excess amounts of marijuana in one location without a recreational license," the state would "take law enforcement action."
"It pains us having to close … and explain to the patients who we represent they'll have to wait through these deadly delays" as the state's marijuana regulations are written, Smith wrote.
The business is also a sponsor of the Northwest Cannabis Classic, a marijuana trade show taking place in Anchorage this weekend.
Under Alaska law, a medical marijuana cardholder may designate a caregiver to grow the person's plants. However, a caregiver may only grow the plants of one person at a time, unless the two people are related.
Smith said that his business model was to "help with the responsibility of the caregiver."
He did not function as a caregiver, Smith said. Caregivers rather provided his address as the location of the plants on the state's medical marijuana registry.
"Nowhere in the state statutes does it say you can't have multiple caregivers at one address," Smith said. He declined to say how many cardholders used his service.
AK Hydro Gardens' attorney contacted and met with the ABC Board last week, board director Cynthia Franklin confirmed Monday.
"We do not want to take enforcement action against them or anyone else, but without a license they are not complying with the voters' intent and … leave us with no choice," Franklin wrote in an email.
Last week, Gov. Bill Walker signed a bill creating a Marijuana Control Board in charge of crafting the Alaska marijuana laws. The legislation also gave the ABC Board authority to shut down businesses acting without a license.
Franklin has testified in legislative hearings that several businesses, including AK Hydro Gardens, were acting outside of the scope of the law.
By functioning without a license, the business was seen as gaining an unfair advantage in the fledgling industry, according to Franklin.
Alaska's law legalizing recreational marijuana possession and use went into effect Feb. 24. The state must complete the regulations by Nov. 24. Until regulations are written, no marijuana business licenses will be issued.
Franklin said businesses operating without a license were a distraction that ultimately did a disservice to the burgeoning marijuana industry.
"Any time of mine that you take with these illegal operations is time you take away from writing regulations," Franklin said.
Smith expressed disappointment at the decision. "It sucks, but we have no other options other than to completely cooperate and close our doors," he said.
The company is terminating a three-year lease on its Anchorage facility, Smith said, and plants will be transported to individual cardholders as permitted under law.
Smith said he plans to visit the cardholders individually to help maintain the plants.
"I am taking it upon myself to help the patients that I have promised I would help," he said.
It's the second marijuana-related business to shut down; AK Green Labs, a testing facility that was located in midtown Anchorage, also closed after contacting and consulting with the ABC Board, according to Franklin.
Two other businesses -- Discreet Deliveries and the Alaska Cannabis Club --- have also been identified by Franklin as operating without a license. Neither business has contacted the ABC Board, Franklin said.