On February 24th, Alaska became the third state to legalize adults using and possessing certain amounts of marijuana. Despite this development, you cannot start selling cannabis willy-nilly in Alaska. You will need to register with the state to cultivate, manufacture, and distribute cannabis for public consumption. And the Alcoholic Beverage Control Board (ABCB), the agency overseeing Alaska’s recreational marijuana program, has yet to formulate regulations to control commercial marijuana businesses in The Last Frontier. That is likely to change soon as the ABCB has to develop its marijuana rules by November 24, 2015 and must begin accepting applications to run marijuana businesses no later than February 24, 2016.  Alaska Marijuana

So how will Alaska regulate marijuana businesses?

Though many believe Alaska will implement regulations similar to those in Colorado and in Washington, Alaska likely will also afford itself its own unique set of rules better tailored to a state with just 700,000 people. Senate Bill 62 sets forth a litany of regulations that will modify Ballot Measure 2 as passed. Senate Bill 62 covers many aspects of the marijuana industry, ranging from packaging and labeling of products to restrictions on advertising to specific distance requirements not set forth in the original language of Ballot Measure 2. The following are the top ten highlights of the bill:

  1. License application fees will exceed $5,000.
  2. Municipalities that allow for marijuana activity will have to develop their own marijuana licensing fees and schedules that do not conflict with the bill.
  3. Retail marijuana businesses will need to be at least 200 feet from churches, school grounds, or correctional facilities, “measured by the shortest pedestrian route from the outer boundaries of the school ground or the public entrance of the church building or correctional facility.”
  4. Residency requirements of various durations will be imposed for corporate entities and individuals.
  5. If municipal zoning does not permit marijuana business activity, the state shall not issue a license to an applicant in a prohibited municipal zone.
  6. Retailers can sell up to one ounce of cannabis to a single person in one day and they must remain closed from midnight to 8 a.m.
  7. Advertising cannot appeal to “minors” and packaging must be childproof.
  8. An individual dose of THC in edibles must be ten milligrams or less.
  9. Vertical integration (cultivating, manufacturing, and retailing) will be permitted under certain circumstances.
  10. Licenses can be transferred if certain regulatory conditions and restrictions are met.

SB 62 proposes six different license types:

  1. Producers. Those who cultivate cannabis and sell it only to processors or retailers. Notably, the bill makes no mention of any plant or canopy cap.
  2. Processors. Those who purchase cannabis from producers and other processors to “refine, process, cook, manufacture, develop, label and package marijuana and marijuana products” and who “perform solvent-based extractions on marijuana.” Processors can sell their products to retailers and other processors.
  3. Retailers. Those who buy marijuana from producers and processors to re-sell to the public. Any marijuana sold to the public by a retailer cannot be consumed on the retail premises.
  4. Boutique producers. A producer licensed to grow up to 50 marijuana plants to sell to a broker for re-sale.
  5. Home growers. Individuals who cultivate cannabis at home and are permitted to sell that cannabis to a broker for re-sale.
  6. Brokers. Individuals who buy from producers, boutique producers, and home growers and then re-sell cannabis to processors and retailers only.

SB 62 also creates state certification for marijuana testing facilities by the Department of Environmental Conservation.

If SB 62 provides any insight into Alaska’s cannabis future, we should expect Alaska to have a relatively sophisticated and closely regulated marijuana regime. The key at this point for any marijuana business stakeholder in Alaska is to closely watch and adjust to both the legislature and the ABCB, as either one can and likely will be formulating regulations for marijuana businesses.

For more on recreational cannabis in Alaska, check out the following: