In November, Alaska passed Ballot Measure 2, allowing adults to possess up to one ounce of marijuana and up to six plants and legalizing the manufacturing and sale of marijuana. Since passage of this Measure, the Alcoholic Beverage Control Board has received many questions regarding how it will implement and regulate marijuana in Alaska. Here are some frequently asked questions to which the Alaska Alcoholic Beverage Control Board has provided explanations.
Which body is controlling the state regulation of marijuana? Proposition 2 directs the Alcoholic Beverage Control Board (ABCB) to adopt regulations governing marijuana-related entities and the newly formed industry. However, if the Legislature so chooses, it can create a new Marijuana Control Board to regulate the industry.
Can I buy or sell marijuana in Alaska right now? Not yet. Adults 21 and up have to wait 90 days from the certification of Measure 2 in order to possess up to an ounce of marijuana and up to six marijuana plants without the threat of arrest and prosecution.
Can I apply to the ABCB to start my own marijuana business? Not yet. Individuals won’t be able to commercially cultivate, manufacture, or sell cannabis until the ABCB adopts rules for the licensing and registration of marijuana businesses.
What kind of marijuana licenses can I apply for? None right now. The ABCB has to create the licenses and registrations for cannabis businesses and it hasn’t done so yet. The Board has nine months to figure out the rules for the recreational program.
Will the state administer the marijuana licenses? No. The ABCB will administer the licenses and enforce restrictions on the licenses.
What if I don’t want a marijuana business in my community? Measure 2 allows communities to prohibit marijuana businesses outright either through the passage of an ordinance by the governing council or through local elections to opt out. Nonetheless, in those communities that adopt prohibition against cannabis businesses, the Alaska Supreme Court still protects an adult’s right to privacy and their wishes to use and possess a small amount of marijuana in their home for personal use.
Our Alaska-licensed Cannabis business lawyers have also handled a slew of questions about what folks should be doing now to prepare for licensing in Alaska. Without knowing exactly how the ABCB will regulate, our general answer is “not much.” However, there are certain preliminary steps licensee hopefuls can take even now:
1. Scout your municipality or borough. Because Measure 2 allows locals to prohibit marijuana businesses outright, you want to know which communities are likely to institute a ban. For example, Anchorage is contemplating prohibition, and you should at least consider that before spending to set up shop there. If your city or borough is thinking about zoning or additional marijuana regulations, you should seek to get clear on what they are planning and figure out how you can educate and influence those making the decisions. Trust us, the city or borough will appreciate the industry insight and transparency.
2. Contemplate your marijuana corporate entity. It’s never too early to begin thinking about which corporate structure makes sense for you. Will you be a limited liability company? A corporation? A partnership? Now is the time to start learning about these entities and how they interact with Alaska state law if you don’t already have a basic understanding.
3. Start networking with legitimate professionals with substantial cannabis industry experience. You are going to need a professional team behind you to prepare for securing your state marijuana registration/license. This includes lawyers with substantial marijuana licensing experience in other states, accountants familiar with the federal and state tax regimes your cannabis business will be facing, legitimate insurers with experience writing policies for cannabis businesses, and intelligent, trustworthy business allies like architects, contractors, and security personnel, preferably with cannabis experience. Be wary of anyone who claims that they know what will happen in Alaska by way of its regulation or who tells you that you need to pay them a lot of money now to prepare for what may come later.
4. Read the Federal enforcement memos. Though Alaska has legalized the cultivation, manufacture, and distribution of marijuana for recreational use, all marijuana activity is still prohibited under Federal law. This means that you sould educate yourself on the consequences of violating Federal law and on Federal enforcement policies and priorities, all of which can be found in the most recent “Cole” memorandum authored by former Deputy Attorney General James Cole. You should get to know the positions on cannabis of Alaska’s U.S. Attorney, Karen Loeffler. Her stance on enforcement of Federal drug laws will be key to moving forward under Measure 2. Alaska has huge swaths of Federal land and waters. Figure out now whether that will impact your cannabis business, especially if your cannabis will need to traverse that land or water.
Above all else, listen, learn, and advocate.