Alaska voters will wait another six months before deciding whether to legalize recreational marijuana in the state, but entrepreneurs are already ramping up in anticipation that the ballot measure will pass muster with voters, and hoping to get a foot in the door ahead of big business they expect will flood into the Last Frontier to capitalize on the new market.
These entrepreneurs are confident the initiative will pass when it is put before voters on Aug. 19. The initiative would legalize recreational marijuana use for adults 21 or older, and tax it at $50 an ounce.
"I just think marijuana's going to revolutionize things in Alaska as much as oil ever did. The prospect for jobs and new business start-ups is phenomenal. All Alaskans should be excited about it," said Bill Fikes, a disabled veteran and owner of the website Alaska Hemp who is looking to start a cannabis grow operation should the initiative succeed.
With some "creative financing" -- money from investors with relatively deep pockets -- Fikes said he is already in negotiations with business partners about starting up a major grow operation and dispensary. He said they have a property owner lined up who is interested in housing the necessary infrastructure, and several growers who have specific strains they'd like to grow. He wants to start a dispensary in Wasilla, and maybe Anchorage too.
Fikes is starting to do this work now, way in front of the vote on the ballot measure, to "try and at least get a little head start on the carpetbaggers," he said, referring to people and businesses he believes will come to Alaska to cash in on the new market. Big business that has already made millions in Colorado and Washington will not be far behind once the initiative passes, Fikes said. "I think they're going to see Alaska as a major expansion marketplace."
One such business, Seattle-based equity firm Privateer Holdings, has gotten a lot of press for seizing on the cannabis industry's potential in the U.S. A spokesperson for the company could not comment on whether the firm is eyeing Alaska as a potential marketplace, saying the founders were all traveling on Tuesday.
Two states -- Colorado and Washington -- have already voted to legalize, tax and regulate recreational marijuana. Colorado began selling cannabis for recreational use in January, and Washington will start this summer. In late February, Colorado offered a first glimpse into the potential for tax revenue that could flow into state coffers. In a budget proposal from Gov. John W. Hickenlooper, an estimated $1 billion in sales are expected in the state's next fiscal year, which begins in July. That estimates about $610 million from recreational sales and the rest from medical sales. Such sales would provide the state with about $134 million in tax revenue. Hickenlooper suggested that $99 million of that be spent on various programs, including substance-abuse treatment, public health, law enforcement, and preventing marijuana use by children and teenagers.
Meanwhile, the state of Alaska doesn't have any idea how much tax revenue legalized marijuana could provide, but will likely have early projections sometime this summer, said Leslye Langla, special assistant to the commissioner of the Department of Commerce, Community and Economic Development.
Shirley Coté, director of the state Alcoholic Beverage Control Board, said the board has fielded questions from a "handful" of people wanting to know how to get started ahead of the vote.
The Alaska Chamber, a business membership organization that seeks to promote business in Alaska, has not discussed the marijuana initiative, according to Chamber CEO Rachael Petro.
Some already interested in cashing in on legal weed
At least one company from out of state is already investing in the budding industry. The Alaska Cannabis Institute is offering a two-day seminar at three different Alaska locations. Manager Cory Wray wrote that the $420 seminars will focus on both the business side and the horticulture side of managing a cannabis crop.
Wray dismissed the idea that it may be a little early to be offering this type of seminar, given that the initiative hasn't passed and the regulations are not yet laid out. "We do not believe the seminar is premature. Although Alaska policy has not been set, we do know what the Federal policy is," Wray wrote, citing federal tax policy and banking regulations that have been established.
"We believe in tracking from seed-to-sale, something we talk about in our seminars. We believe in licensing; and we believe these are ideas we can expect Alaska lawmakers to include in Alaska (marijuana) policy," Wray wrote.
Wray wrote that he has been approached by Alaska businesses and entrepreneurs. "There is a demand for education because there is a lot of money to be made ... to get in at the beginning is a powerful thing and people know it," he wrote.
Buying up business names
Eagle River resident Everett Knudson is one of those people banking on getting in early. Knudson is "very aware of the whole idea of getting squashed by corporations with huge checkbooks," he said. If you're not the biggest, being first is the next best thing, he said.
So Knudson is buying up business names. First, he purchased Cannabis Inc., a name that he has now trademarked. For Cannabis Inc., Knudson envisions a "super center for cannabis" -- a place where customers can purchase cannabis-related books, coffee and food (the non-cannabis kind), and where those growing marijuana at home can even purchase garden supplies. Knudson is also toying with the idea of offering home-installation services for those interested in growing marijuana themselves.
After Cannabis Inc., Knudson bought the business name Alaska Cannabis Company, saying it was "just another name I wanted to secure."
Knudson is confident the initiative will pass, and he's basing his business moves on the laws and reports coming out of other states. "We're sitting in a crystal ball, and we can look into the future of what's going to happen in Alaska by studying Washington, California and Colorado," Knudson said.
Knudson is self-employed, and has been running a successful plumbing company for most of his adult life. "I've worked really hard to get where I've gotten in life," he said.
His interest in cannabis began around 15 years ago, while reading what he described as a boring textbook on growing marijuana. After that, he just kept reading. Knudson holds an Alaska medical marijuana license, and said he's a "100 percent believer in the power of cannabis."
Now, the social climate seems poised to legalize the use of the plant that he has spent more than a decade studying. "It's coming to a head now and I'm ready to jump on it," he said.
Right now, he has the idea and the names, but he'll still need funding to get his business in place. That may be harder to come by, he said, but just another reason he's starting now.
Moving with the times
Another Alaska entrepreneur, retiree Donald Jack of Anchorage, said he has never smoked marijuana, but he sees that there are business opportunities in the shifting cultural stance in the U.S.
Growing up in Alaska in the 1960s, Jack said he "missed" that part of American culture, and now he's too old to start. But he believes cannabis should be legalized.
Jack owns a one-acre plot of land in the historic Kennecott mine area outside of McCarthy near Wrangell St.-Elias National Park, under the name Alaska Homestead. The plot has been subdivided into smaller plots of one square foot each, and over the years he has sold a handful of those plots as an Alaska souvenir: Own a piece of Alaska with your very own certificate of ownership. Jack said that he had registered the name Alaska Marijuana Farms LLC and would start to sell plots under that name, recognizing that marijuana is becoming a "buzzword."
The land can't actually be cultivated, and will not be used to grow cannabis -- and the certificate given to buyers will say as much. Alaska Marijuana Farms land would instead be a souvenir and a promotional idea, similar to the current business. He's hoping that a bigger company will be interested in the project and will buy up the land and name. Maybe the plots could be sold at hemp festivals in the lower 48, or elsewhere.
"I've had the land for 40 or 50 years," he said, and added that he's just trying out the name change to see if anything comes of it.