Board changes residency rules for pot businesses

  • By BECKY BOHRER
  • Thursday, December 3, 2015 10:52am
  • NewsBusiness

JUNEAU — The board tasked with writing rules for Alaska’s recreational marijuana industry backtracked Tuesday and adopted stricter residency requirements for applicants for pot business licenses.

The Marijuana Control Board scuttled a rule adopted last month that would use the residency requirements needed to vote in Alaska in favor of using the more stringent standards needed to qualify for the yearly check from Alaska’s oil wealth fund.

During a meeting Tuesday in Anchorage the board approved using the residency requirements for the Permanent Fund Dividend, which include being a resident of the state for a full calendar year.

Colorado, Washington and Oregon — the other states that have legalized recreational marijuana — have residency requirements ranging from six months in Washington to two years in the other states.

In Washington and Colorado, those requirements apply to business applicants and investors. 

In Oregon, majority ownership must rest with Oregon residents. Outside investment is allowed there, but non-resident owners can’t be directly involved in a business’ operation or management, according to the temporary rules in place.

Alaska voters last year approved recreational pot for those 21 and older. It remains illegal to buy or sell pot because businesses haven’t been licensed yet. The board is to begin accepting applications in February, with the first industry licenses expected to be awarded in May.

On Tuesday, board member Brandon Emmett proposed an amendment that would allow for limited out-of-state investment. But Harriet Dinegar Milks, an assistant attorney general serving as counsel to the board, said that was outside the published agenda of the meeting and couldn’t be taken up. The board previously rejected a similar proposal.

Under the rules, as currently written, only those holding a pot license can have a financial interest in the business. And to get a license for a pot business, you would have to meet residency requirements.

Arguments that have been made for outside investment for pot businesses include having greater access to financing since the industry is largely excluded from typical commercial lending because of federal drug laws, and access to people with industry experience, said Taylor West, deputy director of the National Cannabis Industry Association.

On the other side, not allowing outside investment can be an attempt to keep the industry smaller and easier to manage, she said. Another argument that has been raised is giving home-grown businesses a chance to establish themselves and flourish, she said.

It’s a debate that’s been going on for some time and probably will continue, given that the industry is growing in a sort of piecemeal, state-by-state process, she said.

The Alaska regulations still must go through a legal review by the Alaska Department of Law.

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