Walker uproots Schulte from Marijuana Control Board, cites lack of collaboration

Gov. Bill Walker has removed Bruce Schulte from the Marijuana Control Board.

Walker’s letter gives little explanation for Schulte’s removal.

“While I have appreciated your willingness to serve on the Marijuana Control Board, I have determined that your continued representation on this board is not in the best interest of Alaska,” stated the letter signed by Walker and dated July 29.

Schulte said he received a voicemail from Walker’s deputy chief of staff John Hozey on the afternoon of July 29 informing Schulte he was off the board. Schulte, a commercial pilot out flying at the time, said he left several messages but hasn’t heard back from Hozey for any explanation.

Hozey did not immediately return a call from the Alaska Journal of Commerce asking for comment. Alcohol and Marijuana Control Office Executive Director Cynthia Franklin referred the Journal to Hozey for questions.

At a news conference on Tuesday with reporters from the Homer News and KBBI Public Radio at the Homer station, in response to a question from KBBI News Director Daysha Eaton, Walker elaborated on why he removed Schulte. He said he felt that Schulte’s approach to the staff wasn’t helping.

“There has to be some ability to work collaboratively in the process,” Walker said. “The information we received back was it was quite disruptive. It was not a collaborative effort for the staff to work. … It was uncomfortable to make that change — he was a bit challenging.”

Peter Mlynarik, the board’s chair, said he was surprised by Schulte’s removal and couldn’t venture to get the cause.

“I don’t know what the reason is,” he said.

The removal comes shortly after Schulte was voted out of his role as board chair at the June 9 meeting and replaced with Mlynarik, the Soldotna Chief of Police, who is gathering signatures for a commercial cannabis ban in unincorporated areas of the Kenai Peninsula Borough.

At the Homer news conference, Walker said he had no intention of removing Mlynarik despite his work to gather petition signatures. Mlynarik fills a slot for a public safety representative.

“The goal is to have a balanced board. I think we have a balanced board,” Walker said.

The next board meeting is scheduled for Sept. 7 when the first retail licenses are expected to be issued. The vacancy leaves the board with four members.

“I honestly have no idea (why I’ve been removed),” said Schulte. “No explanation. No preface. I have no clue.”

Schulte said he feels like his time on the board ended too abruptly and without having accomplished what he wanted to in terms of industry success.

“When I think back on all the work that I put in, it was almost like a part-time job. That’s 2,000 hours of my time I just pissed away. It’s a little disheartening.”

Board member Brandon Emmett of Fairbanks, who has applied for a cannabis production license, said he does not know why Schulte was removed and hopes his replacement continues Schulte’s work.

“Mr. Schulte is an ardent advocate for the marijuana industry,” said Emmett. “I admired his zeal for staying true to the voter initiative timelines and assuring the industry was fairly represented. I can only speculate as to the reason for his removal, but would hope Walker sees fit to insert a strong, responsible voice in his place.”

Schulte served as the board’s chair and a designated industry representative seat from its 2015 inception through the June 9 meeting, during which he was replaced with Mlynarik by a board vote of 3-2, with himself and Emmett voting against.

Schulte said he believes his removal is an attempt to dilute direct industry representation on the board by installing a non-industry member to replace him, leaving only Emmett as an industry representative.

According to HB 123, which established the Marijuana Control Board, the governor must appoint “one person from the public safety sector; one person from the public health sector; one person currently residing in a rural area; one person actively engaged in the marijuana industry; and one person who is either from the general public or actively engaged in the marijuana industry.”

Schulte’s removal has opened a spot for another industry seat, but the governor’s Boards and Commissions office posted a notice for a replacement for an “industry/public board representative.”

At the Homer press conference, Walker said he is considering what kind of person to appoint to replace Schulte. When asked if he would consider someone in the medical profession, Walker said, “We’ll see. I have people looking at it to see if there’s leeway for that.”

This designation is not in line with statutory designations that Schulte and Emmett filled.

According to Schulte, “I was industry, Brandon Emmett is industry/public.”

Emmett confirmed that he is the board’s industry/public member.

When Walker announced the board’s makeup in 2015, his press release made no distinction.

“Appointed to the two industry seats are Bruce Schulte from Anchorage and Brandon Emmett from Fairbanks. Per HB 123, the Governor needs to select two people for the initial appointments to the Marijuana Control Board with experience in the marijuana industry. This experience can be obtained through lawful participation in the marijuana industry or participation in an academic or advocacy role relating to the marijuana industry.”

Schulte said he views his removal as evidence of industry antagonism by Walker’s administration.

“I have witnessed some highly questionable behavior on the part of several in this administration and I can only assume from my own dismissal that Gov. Walker condones that questionable behavior, and that is truly shameful,” said Schulte.

“I believe there is another agenda at work here — and it is definitely not what the voters asked for. The appearance of transparency is, in my opinion, a thinly-veiled façade intended to obscure the fact that they have no real intention of letting a lawful marijuana industry get started in Alaska.”

Schulte said plans to remove both him and Emmett from the board have been in the works for months.

“John Hozey himself did confirm to me that Franklin was trying to keep (Emmett) from being reappointed because she felt that it would weaken the industry’s position on the board,” said Schulte.

The board reviewed a regulatory addition in July that would have prepared for a four-member board.

At the MCB’s July 7 meeting in Fairbanks, a regulation was advanced to the board that would have given the executive director Franklin the ability to cast a tie-breaking vote in the event of a board tie.

Some of the Marijuana Control Board’s five members, who frequently cast 3-2 votes, voted against the measure and it was struck from regulation proposal language.

If a vote is tied at 2-2, any license or matter before the board would fail.

Schulte took the position of board chair at the expense of his position as president of the Alaska Marijuana Industry Association. He said he does not know whether or not he will return to the association. Though the board’s former industry representative, Schulte has not yet submitted a license proposal for the retail business he’d been planning to open in Anchorage.

“I’m reevaluating my entire involvement with marijuana right now,” he said. “I’m fairly certain I’m not going to have the marijuana business I envisioned. I don’t think there’s a hope in hell I’m going to get a license here in the state.”

The removal comes shortly after the public knowledge that Mlynarik, the Soldotna Chief of Police, is a registered signature gatherer for a petition that would put a commercial cannabis ban ballot initiative onto the Kenai Peninsula Borough ticket in October.

Mlynarik has insisted that his personal involvement with the petition should not concern the industry, as his personal opinion and board behavior are separate issues. He said his voting record on license approval beginning June 9 should speak for itself, as he has voted in favor of each license.

“I’ve not found his role in signatures is particularly troublesome,” Walker said.

Also on Tuesday, Walker addressed the Homer City Council. In response to a question by council member David Lewis about possible attempts in the next Legislature to repeal or change Alaska’s marijuana laws, Walker said he hadn’t heard of any discussions about that.

Under Alaska’s initiative process, the Legislature can make changes to an act passed by the people two years after it passes.

“When the people have spoken, we have to honor that,” Walker said. “I would have to look at that as a business person and again honoring the wishes of the voters. That would be something I would take very seriously.”

The situation, Schulte said, has soured him on the industry’s prospects for success.

“If I were just any guy, thinking I want to start a marijuana business, I would tell that guy, ‘don’t spend a lot of money on it right now. You may be in for a really rude awakening.’”

DJ Summers is a reporter for the Alaska Journal of Commerce. He can be reached at daniel.summers@alaskajournal.com. Homer News reporter Michael Armstrong contributed to this story. He can be reached at michael.armstrong@homernews.com.