Legal Cannabis at Risk in Alaska

On Oct. 3, voters in Fairbanks, Alaska and two neighboring boroughs will be asked to decide the fate of the legalized cannabis market — and their decision could change the entire state’s marijuana landscape.

Alaska became the third U.S. state to end the prohibition of marijuana on Nov. 4, 2014 with the passage of Ballot Measure 2. And while the argument for or against legal marijuana typically occurs long before any such legalization takes place, nearly 200,000 residents of Fairbanks, the Fairbanks North Star Borough, and the Kenai Peninsula Borough find themselves embroiled in that very debate all over again.

When marijuana was legalized in 2014, the legislation left open the possibility for cities and municipalities to ban marijuana-related businesses “through the enactment of an ordinance or by a voter initiative.” The local option laws do, however, prevent the local government from banning the possession or personal use of cannabis.

In the City of Fairbanks, voters will be tasked with making a decision on Proposition A, which aims to ban all cannabis companies from conducting business within city limits. A renewed prohibition on the cannabis market in Fairbanks would mean that all “marijuana establishments” would have to close their doors for good. Voters living in the North Star Borough of Fairbanks will decide on Proposition 1, which bears very similar language to Proposition A. The Kenai Peninsula Borough will vote on a separate Proposition A that, like the others, aims to ban all cannabis commerce in the borough.

According to the propositions, the following businesses would be included in the ban should the new bills pass:

  • a retail marijuana store, an entity that sells marijuana and marijuana products to consumers;
  • a marijuana cultivation facility, an entity that cultivates, prepares, and packages marijuana and sells marijuana to other marijuana establishments, but not to consumers;
  • a marijuana product manufacturing facility, an entity that purchases, manufactures, and prepares marijuana products and sells marijuana and marijuana products to other marijuana establishments, but not to consumers; and
  • a marijuana testing facility, an entity that analyzes and certifies the safety and potency of marijuana. spoke with an industry association leader, the manager of a family medical practice that has incorporated medical marijuana into their practice, and two cannabis company executives to gauge how this vote will affect each facet of the cannabis industry. (MJ): Why do people want to ban marijuana businesses in Fairbanks?

Greg Allison, director of operations, GOOD Alaska Cannabis: There hasn’t been any specific issues or instances that would justify a repeal. All of the information put out by the opposition is based on misinformation and fear mongering … The entire campaign for a repeal is based around making neighborhoods in Fairbanks safer, but what is safer than removing the black market from a community? If they were educated on the matter, they would understand that the safest plan is regulation.

Keenan Hollister, owner, Pakalolo Supply Co.: The legalization bill from 2014 did leave open the option for local control, meaning local governments have the option to ban marijuana businesses. Most of the local lawmakers are very much on our side, but there are some who remain active prohibitionists.

Cary Carrigan, executive director, Alaska Marijuana Industry Association: Fear. They’re scared of marijuana, they’re scared of crime, they’re scared of what they think it does to you. If we can stop all three of these measures, we can make people stop and think before they come at us again. It’s critical that we get all three. We want to be sure there is no prohibition.

MJ: How will a repeal of legalization in the Fairbanks area affect the marijuana landscape throughout the rest of the state?

Greg Allison: This is much bigger than us or any single marijuana business in the Fairbanks area. It would be devastating. There would be a trickle down effect felt throughout the whole state because we know from tax revenue data that roughly 50 percent of the state’s marijuana is grown in Fairbanks. Because of the high demand, we want more growers in Fairbanks and the Kenai Peninsula, etc, not less. It would devastate the pricing, as we already have difficulty getting product to some areas. It would be heartbreaking for so many people that rely on this industry.

Keenan Hollister: About 60 percent of the weed that’s been in the market in the first year has been grown in this borough. So, while there are new growers popping up statewide, a disproportionate chunk would be eliminated, as 20 plus grow operations would be forced to move or shut down.

Nicholas Braman, business manager, Brück Clift MD, LLC: The biggest effect it will have is raising prices on marijuana because there is a whole lot of growers in the Fairbanks area, and if they get shut down, we’ll be left with far fewer growers. We’ve seen prices dropping the way you’d expect, from well above $20 per gram to the teens, but shutting down the Fairbanks market would send prices right back over $25.

Cary Carrigan: We look at this as the opposition’s means to an end. We think people who are against this — and there is a small percentage of the population that is dedicated to eradicating marijuana because they still believe old propaganda — could start becoming emboldened by the fact that somebody passed it in Fairbanks, “so we’re going to do it here, too.” We’re working hard to prevent that, which is why we put so much effort, so much money, and so much manpower into these campaigns.

MJ: If the repeal does pass, what does that mean for the Fairbanks area?

Cary Carrigan: They’re operating from a fear-based mentality and think that repealing legalization will revert everything back to the way things were before. Well, the way it was, there was a guy in your neighborhood who was growing marijuana in his basement right next door. You didn’t know it. He was selling it to some guy who would go around and he didn’t care about who he sold it to as long he sold it. He’d be selling it in bars, he’d be selling it in high school parking lots, he’d be selling it in the alleys behind stores. It doesn’t need to be that way. People need to understand that the black market is going to flourish once again in the absence of a regulated market.

Keenan Hollister: The impact on the local community would be to the tune of hundreds of jobs and hundreds of thousands of dollars of tax revenue. Then there’s all of the ancillary businesses that have popped up in the wake of legalization. Aside from those, a half-million dollars has already been paid from the cannabis industry into the local electrical co-op. That amount of electricity being purchased by the cannabis industry lowers rates for all of the other members of the co-op.

Cary Carrigan: We’re putting money into the state coffers, we’ve done everything we said we would do as an industry. They’re so anti-cannabis, they will bite off their nose to spite their face.

MJ: How many people would find themselves without work in the event of a repeal?

Greg Allison: Over 300 in Fairbanks alone, easily. Our organization employs just over 20 people and we’re growing daily. We just hired four new people the other day and I have more interviews scheduled in the next few days, so we may have close to 30 people working for us soon. I know a few other organizations pushing around 30 people, too, so the 300 estimate may be really low. A significant amount of people would definitely lose their job and sustainability.

Keenan Hollister: We have 17 employees on our staff and there are over 30 businesses in the area. We’re talking about hundreds of jobs in the legalized marker, and that doesn’t even include any of the ancillary businesses that will be greatly affected like garden supply stores and trimming services within Fairbanks. There are hundreds of jobs at stake and there are a lot of families in the area that are very financially invested in this market.

MJ: As far as medical patients and consumers go, how many people would be left without a legal solution for securing the cannabis they need?

Nicholas Braman: In the event of a repeal, medical marijuana patients in the Fairbanks area will be forced to grow their own medicine or travel to an area of the state that has legalized the sale of cannabis. It is real medicine for some people, especially these CBD products, and these patients aren’t trying to secure cannabis to get high. They are trying to buy marijuana because it has real beneficial health effects. It is something that should absolutely be on the market here.

Greg Allison: Countless people. Hundreds and hundreds, if not thousands, of people would go without their medicine in Fairbanks. The problem is, what will those people turn to without a viable solution to find cannabis. Do they go back to using pills? We hear a lot of people tell us they don’t really drink alcohol anymore after legalization because cannabis is better for their body. They don’t want to have to track down a black market drug dealer to get their marijuana, though. They want to know the strain history of what they are buying, they want to know lab test results. A repeal would take a completely regulated industry and hand it right back to the black market.

Keenan Hollister: We see hundreds of customers on a daily basis that either want or need legal cannabis. The medical system in Alaska is set up as home grow only, so without recreational sales, these people will have no local access to dispensaries. It is obviously quite cumbersome to tell a patient who has already had easy direct access to their medicine that they now have to obtain seeds somehow, plus acquire and setup all of the necessary equipment to grow at home.

MJ: Why is legalization good for Fairbanks?

Greg Allison: The cannabis industry in Fairbanks has really come together to show support to the community, which has been phenomenal. Each one of these business owners here in Fairbanks meets monthly as part of the Alaskan Marijuana Industry Association, so there’s also a great camaraderie between us as well. We knew we were going to have to come together to be a positive influence in the community, so we do events like a food drive last December where we collected over 750 pounds of food to donate to the North Pole chapter of St. Jude’s.

We held a clothing drive for the Fairbanks Women’s Shelter in January and donated over 40 hours of community service to the local soup kitchen in February. In April, we held the first annual Fairbanks Community Cannabis Conference, where all the proceeds went back to the Fairbanks Food Bank and we welcomed members of the community to come and meet various faces of the industry. We have taken a very engaged philosophy to be a part of our community.

Cary Carrigan: If there’s a black market in the community, do you think those people are going to want to be Rotarians? We continually try to help the community and be good stewards of this legal cannabis industry.

As the City of Fairbanks, the Kenai Peninsula Borough, and North Star Borough head to the polls tomorrow to decide the future of cannabis businesses in their area, it’s important that anyone and everyone registered to vote on one of the three propositions exercise their right to do so. Regardless of your stance on marijuana, it cannot be denied the bountiful plant provides not only life-saving therapeutic benefits to many but hordes of cold, hard tax revenue for a state with a general fund that, in January, clocked in at 80 percent, or $400,000, below its typical balance from previous years.

The only way to show that a majority of Alaskans really do support the legalization movement is for a majority of those Alaskans to show up and vote Tuesday.

Image courtesy of Allie Beckett
Additional contributions by Lesley Nickus and Miranda Davinroy


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