AMCO Status Update

Budding Industry

Reality-Based AMCO Status Update

By Whitney Branshaw


The Alcohol and Marijuana Control Office (AMCO) held their scheduled Marijuana Control Board (MCB) meeting on April 4 and 5 in Anchorage. There was a push to amend the planned agenda to allow for approval of complete applications in order to help our industry move forward. A total of 35 licenses ranging from cultivation, retail and manufacturing were approved with delegation by the state, while two were tabled to await the next meeting. Approving those licenses over two days took up much of the allotted meeting time so that not much else was accomplished. This helped validate the need for a May meeting for the MCB. That request was granted, and an additional MCB meeting is scheduled for May 15 in Fairbanks.


With entire meetings spent pushing licenses through to help grow our industry, when does MCB have time to work on issues they’re responsible for? The general public has an ongoing perception that there is a “backlog” of licenses waiting to be approved, that AMCO is grossly understaffed and that our industry is not growing fast enough. There is merit in some of those perceptions, but there is also space for a reality check.


The reality is this: At the time of the April meeting there were only 37 applications in “backlog.” These 37 applications make up the “under review” and “incomplete status” needing a final examination to confirm that the requested supporting documents from the licensee have been added to the application and ensure it is appropriate to move forward to the board. That’s it. 37 applications. Not the hundreds you hear folks complaining about.


When it comes to staffing at AMCO, the perception is accurate in that the office is understaffed. In AMCO Director Erika McConnell’s Director Report she explains, “as you know, the staffing resources provided to AMCO over the last several years have created a challenge to implementing these goals, entirely because of workload. The entire staff has pitched in, often doing work that is not normally within their purview, to keep the office functioning and meet statutory requirements, but customer service has suffered and some of the staff is on the edge of burnout. AMCO requested three additional positions in its 2018 budget: two examiners and one administrative assistant. So far, these positions have remained in the budget as it goes through the legislative process. We are trying to complete needed paperwork in advance so that if the positions are approved, we can hire as close to July 1 as possible.”


I met with Erika to discuss the current issues at AMCO and check in on how her transition from city employee to state employee has gone. “There has definitely been a learning curve for me,” Erika says, “but I feel confident that we are doing our best and moving in a positive direction.” We discuss the absent infrastructure that the marijuana industry started with, to what it is today. “The reason we chose to push those licenses ahead of other responsibilities was to try to give the marijuana industry more active licensees to help with production. We also recognize that we need to work on other things as well. And, as I’m learning, I’m trying to find ways for us to be more efficient with our time. We need more meeting times than the original quarterly meeting plan, but the question becomes, ‘how do we effectively utilize that time and what needs our attention the most?’ The amount of meetings we have also depends on our budget.” In regard to the upcoming renewal period for licensees and the staffing shortage AMCO is facing, Erika had a simple answer for me: “We will be ready. We have prepared for this and we are ready to tackle the renewal period and make it as smooth as we can for the applicants.”


While we have faced many challenges in getting the marijuana industry up and off the ground, we also have a lot of people and successes to celebrate. Cary Carrigan, Director of the Alaska Marijuana Industry Association (AMIA), shares that sentiment: “One thing to be proud of is people are performing. People are navigating this process in the midst of no financial support and prohibition campaigns being waged. There were people who thought this would fail, but we haven’t. The people who are still in the game at this point are fanatically committed to seeing this process through. You have to admire that. It’s incredible that we’re here. People have faced an incredible amount of adversity.” When it comes to the future of our industry and what it needs to become successful, he tells me, “we need the resource of the AMCO office to function effectively, and we also need the pioneers of this industry to share their knowledge and experiences with the process so other people can learn. We need them to show the others the way. We must work together and support each other.” 


The lack of infrastructure in supporting the growing marijuana industry is a consistent topic that comes up. We are an immediate gratification society these days, people expect things to materialize out of nowhere and happen right away. With an industry like this, we can’t have those kinds of expectations. But we can learn from our experiences over the last few years and apply that to the future. Brandon Emmett has one of the industry seats on the MCB and is fast approaching the opening of his marijuana business, Good Titrations, in Fairbanks. “The AMCO staff has brought a number of issues forward, many of which that have been echoed by the marijuana industry, and the MCB has opened many regulations projects that affect the state of Alaska and its residents to try and resolve some of these issues we are having that have slowed us down,” Brandon says.” We have been so concerned with protecting Alaska interest and limiting outside interest, making it financially unfeasible for some. We also have incredibly difficult processes surrounding getting up and getting going for any new licensee. I am hoping we can start to look at some of our regulations surrounding things like transportation, security and processes that are hard for the licensee to interpret, which leads to violations that might not have been warranted.”


Given the slow start to our infantile industry, failing to complete the agenda at MCB meetings, AMCO being understaffed and regulation projects stacking up as flaws in our system come to light, you would think that the focus would be on the basic function of AMCO and how to be more efficient. While those issues are being addressed at a less than desirable rate we have seen other scenarios move with unprecedented haste. What AMCO does seem to have time for is “enforcement” and varying personal interpretations of our regulations surrounding advertisements for legal marijuana establishments. This also includes jurisdiction (if any) that enforcement has when faced with a scenario that might not be spelled out clearly within our existing regulations. On April 17, an “Advisory Notice” was sent to “all licensed marijuana retail stores” in regard to the upcoming unofficial marijuana holiday of 4/20. The Notice stated that Enforcement had discovered “an alarming amount of social media advertisements for 4/20 celebrations that are in violation of 3 AAC 306.360(d). Games, competitions, raffles, etc. are strictly prohibited at marijuana retail stores. Please be advised that if a 4/20 event held on your premises includes activities that violate any section of 3 AAC 306 further enforcement action may be taken against your license.”


This Notice also encouraged licensees to contact AMCO Enforcement if they were unsure what activities could possibly lead to a violation. Multiple licensees ended up canceling promotional activities, accepting the notice as with merit as many are afraid to challenge AMCO in fear of retaliation.  However, some retailers challenged the varying interpretations of the regulations surrounding promotional activities and were met with differing answers from Enforcement and the Director adding to the confusion of what activities would and would not be targeted by Enforcement.


On April 19, Enforcement sent another Cease and Desist Notice to Pot Luck Events (PLE), one day before their 3rd annual 4/20 celebration. PLE is a marijuana social club that was owned and operated by the late Theresa Collins. In that Notice AMCO suggested that PLE was “likely” violating the law and referenced the Cole Memorandum as its reasoning for pursuing legal action against PLE. The Notice to PLE closed with the statement, “You should also know that we have been working with the Anchorage Police Department to develop an enforcement plan,” eluding to the possibility of law enforcement being present to issue sanctions for consuming marijuana in the private club.


When I contacted AMCO Director Erika McConnell for a statement about the shutdown of PLE, she provided me with the following. “As the legal marijuana industry in Alaska continues to develop and mature, the closing of an illegal social club is a positive step. Obviously there is a great deal of interest in social consumption of marijuana, and the Marijuana Control Board is evaluating methods to allow this, within the bounds of Alaska statute and regulation. Businesses such as Pot Luck Events that operate outside of the voter initiative and subsequent adopted regulations are a source of danger to the public health and give support to the black market.  AMCO will continue to support the Marijuana Control Board's regulation of the lawful recreational marijuana industry, in keeping with state law and guidance from the US Department of Justice.” In regards to the "enforcement plan" that was mentioned in the official Notice from AMCO, Erika told me, "I have no comment on enforcement plans."


During the time this conversation was happening, Theresa Collins was losing her battle with terminal cancer. Despite being told to shut down before the 4/20 party, people involved in PLE decided to carry on with the event in Theresa’s honor and face the possible consequences that had been detailed by AMCO. The 4/20 event happened without incident and without any sign of enforcement or police, a pleasant surprise given the amount of posturing by Enforcement in the days leading up to it. Theresa Collins passed away on April 21, 2017. One day after PLE closed their doors under threat of legal action.


This column straddles the current line of positive and negative aspects of the state of Alaska’s involvement in the legal marijuana industry. On one hand, you see a staunch effort to close the gaps in our licensing system by beefing up staffing at AMCO, getting licenses active so they can operate in hopes of meeting the supply and demand of the market, as well as new regulation projects on the table that will hopefully help us define a simple standard when it comes to interpreting our state rules vs. federal law. Nonetheless, there is an obvious undertone of fearmongering. Using language such as “likely” or “probable” is not definitive when you are talking about interpretation of law or regulations. Threatening the possibility of law enforcement being present at a private event to issue citations in an attempt to discourage participation just reeks of a power trip. There’s also the factor that AMCO could be infringing on the constitutional rights of legal marijuana businesses in suppressing their right to promote their business through commercial speech, which is protected under the First Amendment of the U.S. Constitution. But how do we defend our rights to free speech in regard to an industry that is still deemed federally illegal? Next week I will examine the grey areas that muddy the waters of our legal marijuana industry in Alaska.


For all of you that knew and loved Theresa Collins, I grieve with you. To Tree, we are with you—the fight to secure the sustainability of your vision isn’t over yet.