It’s a slow go for cannabis ops

In the five months since the Alaska Alcohol and Marijuana Control Office began accepting applications for commercial cannabis operations, just a half dozen businesses on the lower Kenai Peninsula have applied for cultivation or retail permits. None of them have started production.

As Alaska goes through the growing pains of licensing commercial cannabis for cultivation, processing, testing and sale, the status of pot in the Homer area can be summed up in two words: not yet.

The local industry has seen these developments:

• The Homer City Council approved an ordinance to regulate by zoning district commercial cannabis;

• A Homer citizen group seeking to ban by a vote commercial cannabis in the city came up short by 43 signatures of the 309 needed to put the issue on the ballot;

• Meanwhile, a borough citizen group has until today to submit 898 signatures to ban by a vote commercial cannabis in the unincorporated areas of the Kenai Peninsula Borough;

• Homer held its first cannabis trade fair, Cannafair, last Saturday at Land’s End Resort;

• Seven applications — two by the same business, A1 Cultivation — are now wending their way through the complicated application process;

• One applicant, A1 Cultivation in Happy Valley, has run into objections by neighbors in the beachfront subdivision;

• Of the six enterprises, only one business, Talisman Farms on Crossman Ridge, has been approved for a license by the Marijuana Control Board.

Owner Omar Gucer, a commercial fisherman, said he will get his final inspection at the end of the fishing season in August. Because he plans an outdoor grow operation, he’ll wait until next summer to begin farming cannabis. Gucer also needs to register his seedlings and mother plants through METRC, the Marijuana Enforcement Tracking, Reporting and Compliance system to track every ounce of cannabis from cultivation to sale. The Kenai Peninsula Borough Assembly at its June 7 meeting approved a letter of nonobjection for Talisman Farms’ application, part of a 60-day review process for any borough cannabis applications.

Another business, Cannaboyd, owned by John Boyd of Homer, has had its application tabled to a future Marijuana Control Board meeting pending review by the borough assembly. Boyd said the borough Planning Commission has recommended approval of his business. If the assembly doesn’t object and the control board approves, Boyd said he might be starting his indoor grow operation this fall.

The process of regulating and building a cannabis industry is like remodeling a house, said Cynthia Franklin, executive director of the Alcohol and Marijuana Control Office, or AMCO.

“We are building this house where people are sleeping on the couch, they want to use the bathroom and the microwave in the kitchen, while we’re downstairs building,” she said.

Alaska residents can apply for several kinds of commercial cannabis permits: standard or limited cultivation, processing, testing and retail sale. A limited-cultivation license is for facilities with less than 500-square-feet of growing area.

Most of the local applications are in what the Marijuana Control Board calls the “initiated” process, meaning the applicant has submitted a complete application, filed a public notice (including publication of a notice in a local newspaper) and its application is being reviewed by AMCO.

After the Marijuana Control Board approves an application, it goes to the local governmental body for review. In Homer, that is the Homer City or Kachemak City councils, and outside of Homer in the unincorporated borough, the borough assembly. The assembly has the right to protest an application if there’s enough public objection, said borough assembly member Kelly Cooper, who represents District 8 in Homer.

“We have the authority, but we shouldn’t withhold without good cause,” Cooper said.

A1 Cultivation has applied for a standard cultivation license and a retail license in a 4,000-square-foot building on the Sterling Highway about a half-mile south of the Happy Valley Bar and General Store. James Spearin of Homer owns the building and is leasing it to A1 Cultivation. Kenneth Scollan, one of the affiliates listed on the application, said A1 plans to do an indoor-grow operation and possibly a cannabis store. They’re now waiting for Homer Electric Association to provide sufficient electricity to the building. A1 still has to set up a neighborhood meeting to discuss the project, Scollan said.

The A1 Cultivation application has been getting some heat, Cooper said.

“That one’s just blowing up our emails. They’re (Happy Valley nieghbors) fighting it tooth and nail,” she said.

“We’ve had some people not happy. I think that’s to be expected,” Scollan said. “I think we have some longtime Alaska residents that I feel are not really up to speed with some of the issues.”

Stan Hill, president of the Plumb Bluff Estates Homeowners Association, has been leading the protest against A1. Plumb Bluff includes the A1 Cultivation building, but also a beachfront neighborhood with homes on the Happy Valley beach. Many of the residents are retirees who enjoy the quiet neighborhood.

“Any reasonable individual should be able to see that this is not a good fit,” Hill wrote in a letter of objection to the Marijuana Control Board.

In a phone interview, Hill said he also objected to A1 Cultivation proposing a pot shop on the highway and the possible danger of stoned drivers. People driving from Homer or Soldotna to buy pot might not wait until they get home to smoke, he said.

Hill said he plans to object diligently to A1 Cultivation’s application.

“I’m tireless. I can be the biggest pain in the ass,” he said.

Franklin advised neighborhoods objecting to an application to go to city councils or assemblies to object.

“A protest from the local government is a big boulder in the road,” Franklin said.

One or a few individuals objecting is like little rocks in the road, she said.

“If they’re one rock, you drive over it. If there’s a pile of rocks, it’s going to make the board take pause,” Franklin said.

The Marijuana Control Board can reject an application for things like unpaid taxes. As far as public objection, the marijuana statutes say an application can be denied for something that “would not be in the best interests of the public.”

Several factors have been keeping cannabis businesses from starting, said Jeremiah Emmerson, executive director of the Alaska Small Cultivators Association, a nonprofit cannabis education and trade group that held Cannafair last Saturday. Cannafair’s goal was to educate people on personal, medical and commercial cannabis use.

“My take is the regulations are too restrictive,” Emmerson said.

Some potential growers and sellers have complained about the $50 per ounce state excise tax. The tax should be based on a percentage of the retail cost of cannabis, he said.

Cannabis businesses also are wary of the borough petition drive as well as the possibility that the Alaska Legislature could overturn Alaska’s marijuana laws, Emmerson said.

Legalization happened by citizen initiative in 2014, but that can be reversed after two years by the legislature.

“They want to watch the dust settle,” Emmerson said of businesses. “It is a start. There’s a lot of things that need to be fixed before people are going to be able to jump in.”

Michael Armstrong can be reached at michael.armstrong@homernews.com.

 

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