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HomeMy WebLinkAbout03142016 City Council Work Session Notes - Packet WORK SESSION NOTES ON rPI.ti a_ RaVijuayia cee3u,koht6 Purpose: 'C it-b nC UX5 Present: Low() n `i Di ,6(cy) , Council Members Present: Eavdar,500 aft) ��Cluve, lel-Ee)im' t( , �u 3 tt1rtS ) - \i eAS 1W-r.L(S blimbrr€f C� Gta���'►��0� Called by: a1 r,500Afir, , Time: 5 :, ) Date: 3/44 *********** **** *_*:*********************************** inn w� c � �. e5---abtisk 00-thur). -f[vI' 'N _ tf \A 'AJ r'O ��U( v 'c nm nd i - 4 7 odd acor'finbyfi-c Place a a.w._ GCU i vi -cad 4. 5 r � r u,l+' d �c4o iS7. Stir r 5c0 ov � ��� -(_J� - t�1 �a : I,Gni J;) k,000 IWO Seward City Council Work Session Packet Discussion on Potential Marijuana Regulations March 14, 2016 5:3 0 P. m. Library/Museum Community Room Seward City Council Work Session Discussion on Potential Marijuana Regulations March 14, 2016 Library/Museum Community Room 5:30 p.m. Municipal actions around the state on marijuana licensing ....................................... Pg -I Kenai Peninsula Borough Ordinance 2016 -07, Correspondingmemo regarding marijuana licensing ............................... ............................Pg. 3 Local Governments and Marijuana Regulation, A Resource Guide for the City of Seward, Alaska (by Birch Horton Bittner & Cherot) ........................................ ..........................Pg.11 PowerPoint Presentation: "The Alaska Marijuana Industry" (by Birch Horton Bittner & Cherot) .................................. ............................... Pg.51 "Legal -mess" of marijuana under Alaska State Law ................... ............................Pg. 68 Alcohol &Marijuana Control Office MarijuanaInitiative FAQs ................................................... ..........................Pg.71 Stateof Alaska Marijuana Regulations ................................. ............................Pg. 79 Cityof Seward Draft Zoning Language ............................... ............................Pg. 143 Seward Fire Department Memo RE.Marijuana Industry Code Impacts ............................................................ Pg. 149 Delta Junction X Banned by Ord Banned by ballot Nothing in place Regs passed or pending Adak X 5% tax, fines for public cosumption Local Authority (LA), sets fines AE Boro Akutan Anchorage X X X LA, license required, land use permit, criminal laws, vehicle laws, secondhand smoke laws, April ballot on 5% tax Anderson Barrow X 3/8 council vote on ban all commercial 3/3 council discussion BB Boro Increased buffer at schools, zoning laws apply, no on -site consumption KI Boro King Cove 3/7 vote on one year moratorium Bethel 3/3 vote on ban all commercial Kodiak City Kotzebue KP Boro Six month ban on processing, voters passed 15% sales tax .Can eA Cordova Public consumption prohibited X Mat -Su Boro LA, ban on certain manufacturing methods Delta Junction X X Advisory committee formed Denali Boro X 5% tax, fines for public cosumption Dillingham X Advisory committee formed Fairbanks 5% tax, fines for public cosumption !FNS Boro Fort Yukon Healy X Local zoning, permit required LA Homer 3/14 vote on placing ban on special election ballot Kenai Increased buffer at schools, zoning laws apply, no on -site consumption KI Boro King Cove X 3/3 vote on ban all commercial Kodiak City Kotzebue KP Boro X Public consumption prohibited LA, permit required, increased buffer zone at schools, hours of operation., Mat -Su Boro 10/16 ballot on banning all commercial N Slope Boro Public consumption prohibited Nenana X North Pole NWA Boro X 6% tax, business license fee Palmer Seldovia X X Seward X $oldOtna X Two year moratorium Unalaska X Valdez Zoning regs to be heard mid -March WasiIIa X Whittier X Introduced by: Mayor, Ogle, Gilman Date: 02/23/16 Hearing: Action: Vote: KENAI PENINSULA BOROUGH ORDINANCE 2016 -07 (MAYOR, OGLE, GILMAN) SUBSTITUTE AN ORDINANCE AMENDING KPB CHAPTER 7.20 AND ENACTING KPB CHAPTER 7.30 REGARDING LOCAL PROTESTS OF STATE MARIJUANA LICENSES WHEREAS, during the November 4, 2014 general election, Alaska voters approved initiative Ballot Measure 2, an Act to Tax and Regulate the Production, Sale and Use of Marijuana, which provided for the State development of regulations and requirements for commercial marijuana establishments, and legalized possession and personal use of marijuana by persons 21 years of age or older; and WHEREAS, Ballot Measure 2 allows municipalities in the State, including the borough, to prohibit and/or implement regulations governing the number, time, place and manner of marijuana cultivation facilities, marijuana testing facilities, marijuana product manufacturing facilities, and retail marijuana stores (marijuana establishments); and WHEREAS, KPB Resolution 2015 -013, adopted March 17, 2015, established the Marijuana Task Force for the purpose of researching, advising, and making recommendations to the borough assembly; and WHEREAS, the KPB Marijuana Task Force received a memorandum dated July 28, 2015, from Kenai Peninsula Borough Mayor Mike Navarre instructing the Task Force to primarily focus on potential borough regulation of the marijuana industry, if any; and WHEREAS, the United States Department of Justice has issued guidance (the "Cole" memoranda dated February 14, 2014, and August 29, 2013) describing marijuana - related federal enforcement priorities, including "Preventing the distribution of marijuana to minors" and "Preventing drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use;" and WHEREAS, the Marijuana Task Force, finds that the goal of protecting the public health, safety, and welfare is furthered by preventing the distribution of marijuana to minors and preventing drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use; and Kenai Peninsula Borough, Alaska New Text Underlined; [DELETED TEXT BRACKETED] Ordinance 2016 -07SUB Page I of 6 WHEREAS, pursuant to KPB 2.56.006, the document entitled "2005 Kenai Peninsula Borough Comprehensive Plan" has been adopted as the borough's comprehensive plan; and WHEREAS, the 2005 Kenai Peninsula Borough Comprehensive Plan .identified in Goal 6.6 the goal to reduce conflicts arising from incompatible land uses outside of incorporated cities; and WHEREAS, ordinance 2016 -05 establishes the planning commission as the commentary agency to the Marijuana Control Board regarding licensing for marijuana establishments; and WHEREAS, the Marijuana Task Force supported certain standards and conditions for marijuana establishments at its January 20, 2016, meeting; and WHEREAS, a borough process addressing marijuana establishments should complement the state licensing process rather than duplicate it; and WHEREAS, at its meeting of the planning commission recommended NOW, THEREFORE, BE IT ORDAINED BY THE ASSEMBLY OF THE KENAI PENINSULA BOROUGH: SECTION 1. That KPB 7.20.010(B) is hereby amended as follows: 7.20.010 Local Regulatory Authority. B. The planning commission is authorized to comment to the State of Alaska Marijuana Control Board on marijuana establishment license applications within the Kenai Peninsula Borough consistent with the standards set forth in AS 17.38, [AND] 3 AAC 306, and KPB 7.30. A public hearing shall be held by the nlannina commission prior to submitting the borough's comments on a license aDDlication, transfer. relocation or renewal to the State of Alaska. SECTION 2. That the Kenai Peninsula Borough Code of Ordinances is hereby amended by adding anew chapter to be numbered KPB 7.30 which shall read as follows: CHAPTER 7.30. - MARIJUANA LICENSE PROTESTS 7.30.010. Planning Commission review — Applications— Renewals. A. The planning commission shall review applications submitted to the State Marijuana Control Board for marijuana establishment licenses, or the renewal of a license, within the borough in the following situations: Ordinance 2016 -07SUB New Text Underlined; [DELETED TEXT BRACKETED] Kenai Peninsula Borough, Alaska Page 2 of 6 applications for a new license; or 2. applications requesting approval of a relocation of the licensed premises; or applications requesting the renewal of a license; or 4. applications requesting approval of a transfer of a license to another person. B. After planning commission review and action as provided in KPB 7.30.020, the borough planning department shall provide a letter to the State of Alaska Marijuana Control Board informing it of the planning commission's non - objection, protest, or recommended conditional approval as appropriate. C. The planning commission shall hold a public hearing prior to making a recommendation to the Marijuana Control Board. The planning department shall prepare a staff report for the planning commission addressing items set forth in KPB 7.30.020. Notice of the public hearing shall be given in accord with the provisions of KPB 21.11. 7.30.020. Planning commission protest. A. The planning commission shall cause a protest to be filed with the State of Alaska Marijuana Control Board on any application submitted for a new marijuana license, or any application requesting approval of a relocation of the licensed premises, or any application requesting approval of a transfer of a license to another person, or the application for renewal of a license, within the borough, in the following situations: 1. Where borough records indicate that the applicant and /or transferor is in violation of the borough sales, and /or personal and real property tax ordinances and regulations, has any unpaid balance .due on tax accounts for which the applicant and/or transferor is liable or has failed to comply with any of the filing, reporting or payment provisions of the borough ordinances or regulations. A protest shall not be filed for balances due secured by a payment agreement authorized by borough ordinances, as long as: a. the applicant or transferor is in compliance with the payment agreement; and b. the payment agreement requires payment in full by the end of the next license year; and C. the applicant or transferor is involved in no more than two payment agreements within the prior five (5) years. d. Notwithstanding the provisions of this subsection, the borough is not required to file a protest if the transferor and/or applicant have made satisfactory arrangements with the borough for the discharge Kenai Peninsula Borough, Alaska New Text Underlined; [DELETED TEXT BRACKETED] Ordinance 2016 -07SUB Page 3 of of a tax obligation from the proceeds of the transfer or by payment from the person to whom the license is to be transferred. Further, if the proposed transferee holds a security interest in the license or licensed premises and seeks the transfer as part of an action foreclosing or protecting that security interest the borough will not protest a transfer to the holder of the security interest so long as satisfactory arrangements have been made by the transferee to pay the delinquent taxes in accordance with this chapter and other provisions of the borough code and no other provisions of this chapter would cause or allow a protest to be made. B. Marijuana establishments shall not: 1. be located within 1,000 feet of any school. The distance specified in this subsection must be measured by the shortest pedestrian route from the public entrance of the building in which the licensed premises would be located to the outer parcel boundaries of the school. 2. be located within 500 feet of a recreation or youth center, a building in which religious services are regularly conducted, or a correctional facility. The distance specified in this subsection must be measured by the shortest pedestrian route, from the public entrance of the building in which the licensed premises would be located to the outer boundaries of the recreation or youth center, or the main public entrance of the building in which religious services are regularly conducted, or the correctional facility. 3. be located within a local option zoning district, nor shall any improvements related to a marijuana establishment be located within 300 feet of a local option zoning district formed under KPB 21.44 or prior law applicable to local option zoning district formation. C. Marijuana establishments shall: 1. be located where there is sufficient ingress and egress for traffic to the parcel; and 2. not conduct any business on, or allow any consumer to access, the retail marijuana store's licensed premises, between the hours of 2:00 a.m. and 8:00 a.m. each day; and 3. be current in all Kenai Peninsula Borough obligations consistent with KPB 7.30.020(A); and 4. maintain a state license issued pursuant to AS 17.38 and 3 AAC 306. D. Applicant is responsible for complying with all federal, state and local laws applicable to marijuana. By issuing a recommendation to the Marijuana Control Board the borough is not authorizing the violation of local, state, or federal law. Ordinance 2016 -07SUB New Text Underlined; [DELETED TEXT BRACKETED] Kenai Peninsula Borough, Alaska Page 4 of 6 E. The planning commission may recommend conditions on a license to meet the following standards: protection against damage to adjacent properties, offsite odors, noise, visual impacts, road damage, and criminal activity, and protection of public safety. 7.30.900. Definitions. Unless the context requires otherwise, the following definitions apply: "Marijuana" has the meaning given in Alaska Statute 17.38.900. "Maryuana cultivation facility" means an entity registered to cultivate, prepare, and package marijuana and to sell marijuana to retail marijuana stores, to marijuana product manufacturing facilities, and to other marijuana cultivation facilities, but not to consumers. "Marijuana establishment" means a marijuana cultivation facility, a marijuana testing facility, a marijuana product manufacturing facility, or a retail marijuana store as defined in AS 17.38. "Marijuana product manufacturing facility" means an entity registered to purchase marijuana; manufacture, prepare, and package marijuana products; and sell marijuana and marijuana products to other marijuana product manufacturing facilities and to retail marijuana stores, but not to consumers. "Marijuana products" means concentrated marijuana products and marijuana products that are comprised of marijuana and other ingredients and are intended for use or consumption, such as, but not limited to, edible products, ointments, and tinctures. "Maryuana testing facility" means an entity registered to analyze and certify the safety and potency of marijuana. "Registered" means issued a registration or license by the State of Alaska. "Retail marijuana store" means an entity registered to purchase marijuana from marijuana cultivation facilities, to purchase marijuana and marijuana products from marijuana product manufacturing facilities, and to sell marijuana and marijuana products to consumers. "Recreation or Youth Center" means a building, structure, athletic playing field, or playground (A) Run or created by a local government or the state to provide athletic, recreational, or leisure activities for minors; or (B) Operated by a public or private organization licensed to provide shelter, training, or guidance for persons under 21 years of age. Kenai Peninsula Borough, Alaska New Text Underlined; [DELETED TEXT BRACKETED] Ordinance 2016 -07SUB Page 5 of 6 SECTION 3. That this ordinance takes effect immediately upon its enactment. ENACTED BY THE ASSEMBLY OF THE KENAI PENINSULA BOROUGH THIS DAY OF * 2016. ATTEST: Johni Blankenship, MMC, Borough Clerk Yes: No: Absent: Ordinance 2016 -07SUB Page 6 of 6 Blaine Gilman, Assembly President New Text Underlined; [DELETED TEXT BRACKETED] Kenai Peninsula Borough, Alaska KENAI PENINSULA BOROUGH 144 North Binkley Street • Soldotna, Alaska 99669 -7520 o Toll -free within the Borough: 1 -800 -478 -4441 - PHONE: (907) 262 -4441 • FAX: (907) 262 -1892 www.kpb.us "MEMORANDUM TO: Blaine Gilman, Assembly President Members, Kenai Peninsula Borough Assembly FROM: Mike Navarre; Mayor � 0 • �tq ' Imo , Blaine Gilman, Assembly President Wayne Ogle, Assembly Member �y7 0' DATE: . January 22, 20.16 MIKE NAVARRE BOROUGH MAYOR SUBJECT: Ordinance 2016 -07, An Ordinance Amending KPB Chapter 7.20 and Enacting KPB Chapter 730 Regarding Local Protests of State Marijuana Licenses, Amending KPB 21.25 and Enacting KPB 'Chapter 21.30 Regarding Permit Requirements for Marijuana Establishments, and Amending KPB 21.50 Regarding Violations and Enforcement (Mayor, Gilman,. Ogle) An ordinance is being submitted for introduction which would adopt a marijuana protest chapter, KPB 7.30, similar to the one currently on the books for alcohol. 'Me ordinance through proposed KPB 21.3.0 also establishes a land use counter permit for marijuana. facilities regulated by AS 17.38. Additionally, the ordinance amends pending KPB 7.20 establishing the planning commission as the commenting agency for the borough on state marijuana license applications. The ordinance further amends KPB 21.50 to add fines for the enforcement of the land use permit ordinance. KPB 7.20 is amended to cross - reference that the plannmg.commission will comment to the state regarding the standards set forth in KPB 7.30 and KPB 21.30. KPB 7.20 is also amended to provide -for hearing before the planning commission on a marijuana license application. KPB 7.30 provides. that delinquencies in obligations to the borough provide. a basis for a protest of a state marijuana facility license. The language of KPB 7.30 is based on the language in KPB 7.1 0 wherein an operator's delinquencies in borough obligations form the basis for the protest of a liquor license. KPB 21.25 is amended to provide for a counter permit for marijuana establishments. The regulations for this permit are found at KPB 21.30. A marijuana facility is subject to the following mandatory conditions: A.1,000 foot setback is required from schools; a 500 foot setback is required from youth or recreation centers, church service locations, and correctional. facilities; there must be sufficient ingress and egress for traffic to, the parcel; retail marijuana stores must not conduct business or allow a consumer access between 2 a.m. and 8 a.m. January 22, 2016 . Page Two Standards for marijuana establishments are set forth at KPB 21.30.030. Volunteered conditions by the operator which are consistent. with these standards may be added to the permit issued by. the planning director or may be proposed at the time-the planning commission holds the hearing on the application for the state license. An appeal from the planning director's decision on a counter permit may be taken to the planning commission, and that appeal hearing may be combined with the hearing before the commission on the application for a state license. Permits in compliance with the permit conditions may be extended in five year increments. A permit may be modified through the same counter permit process as the initial granting of the permit. The fines for failure to obtain a permit or violation of a permit condition are set at $300.00 which is consistent with other similar violations of land use regulations. . The planning commission will set a fee-for the counter permit; it is .believed the fee will be approximately $100. The Marijuana Task Force supported the adoption of the borough permit process (proposed KPB 21.30) at its meeting on January 20, 2016. Shortened time is being requested on this ordinance for February 23, 2016 so that it can be heard prior to February 24, the date the state Marijuana Control Board will start accepting license applications. By hearing the ordinance prior to that date there will not be a gap in time where the state regulations are in effect , but corresponding borough regulations are not. Such a gap could cause difficulties in establishing the local permit application and borough comment deadlines for license applications that have already been filed with the state. Your consideration of this ordinance is appreciated. 10 1- ..1 LOCAL GOVERNMENTS A Resource Guide for the City of Seward, Alaska [Rased on the la;- s in a feet as of F',arch 8, ;.aa.6) Local Gowrnments and Marijuana Regulation: A Resource Guide for the City o /Seward, Alaska CREATED BY: Birch Horton Bittmer R Chcrot Flolly C. Wells K atie Davies And Jason Brandeis The content on this resource guide is offered only to provide background and information regarding the regulation of the commercial marijuana industry in Alaska based on the laws in effect as of the date published on the cover of this guide. This guide does not nor is it intended to constitute legal advice. This guide should not be used as a substitute for obtaining legal advice from an attorney licensed or authorized to practice in your jurisdiction. The comments and opinions expressed in this resource guide are of the individual attorneys and may not reflect the opinions of the firm or any individual attorney in the firm r N Local Governments and Marijuana Regulation: A Resource Guide for the City of Seward, Alaska TABLE OF CONTENTS PARTONE: INTRODUCTION ................................................................... ..............................4 PART TWO: MARIJUANA PRODUCTION AND CONSUMPTION TERMINOLOGY............................................................................... ..............................8 PART THREE: OVERVIEW OF FEDERAL AND STATE MARIJUANA LAWS.................................................................................................. .............................22 Federal Marijuana Prohibition ...................................................... ............................... 22 Alaska State Marijuana Laws ........................................................ ............................... 28 Interplay Between Federal and State Marijuana Laws .............. ............................... 28 PART FOUR: THE LEGAL STATUS OF MARIJUANA IN ALASKA ..........................30 Personal Marijuana Use, Possession, Cultivation, and Transf er ............................. 32 Recreational Marijuana ..................................................... ............................... 32 MedicalMarijuana ............................................................. ............................... 33 TheRavin Doctrine ............................................................ ............................... 34 Personal Marijuana Cultivation ("Home Grow") .......... ............................... 35 Commercial Marijuana Production And Sale ............................. ............................... 36 Comparison of State Laws Regulating Commercial Marijuana ProductionAnd Sale .......................................................... ............................... 36 Marijuana Establishments ................................................. ............................... 36 Lawful Activities of Marijuana Establishments ............ ............................... 37 RetailMarijuana Store ...................................................................... .............................37 Marijuana Cultivation Facility ......................................................... .............................38 Marijuana Product Manufacturing Facility .................................... .............................38 MarijuanaTesting Facility ................................................................ .............................38 PART FIVE: ALASKA MARIJUANA INDUSTRY REGULATIONS .............................39 RegulatoryAuthority ...................................................................... ............................... 39 RegulatoryGuidance ...................................................................... ............................... 39 Summary Of Alaska Marijuana Industry Regulations ............... ............................... 42 Licensingand Fees ............................................................ ............................... 45 LocalOption .................................................................................... ............................... 46 MarijuanaEstablishments .............................................................. ............................... 47 Operating Requirements for All Marijuana Establishments ....................... 47 Local G—ments and Marijuana Regulation: A Resource Guide forthe Oty of Seward, Alaska RetailMarijuana Stores ....................................................... .............................48 Marijuana Cultivation Facilities ...................................... ............................... 49 Marijuana Product Manufacturing Facilities ................. ............................... 50 Marijuana Testing Facilities ............................................. ............................... 54 Enforcement and Civil Penalties .................................................. ............................... 54 PART SIX: CIVIL AND CRIMINAL PENALTIES FOR MARIJUANA CULTIVATION, POSSESSION, AND SALE ............................. .............................56 MarijuanaViolations ........................................................................ .............................56 Marijuana Misdemeanors ................................................. ............................... 57 MarijuanaFelonies ............................................................ ............................... 57 Driving Under The Influence Of Marijuana .................... .............................58 PART SEVEN: LOCAL REGULATION ................................................. .............................61 Opt -Out Provisions ......................................................................... ............................... 62 Local Civil and Criminal Penalties .............................................. ............................... 62 PART EIGHT. Revenue - Generating ASPECTS OF REGULATION ... .............................64 Marijuana and Revenue - Generating Opportunities .................... ............................... 64 Municipal Sales and Use Tax ........................................................ ............................... 64 ExciseTax ....................................................................................... ............................... 64 License and Application Fees ....................................................... ............................... 65 OtherSources of Revenue ............................................................. ............................... 66 PART NINE: Zoning, Land Use, and the Environment ........................... .............................67 Understanding Land Use Regulations Adopted by the State of Alaska ................. 67 Environmental Impacts of Marijuana Industry on Land Use Regulation .............. 68 Odor Emissions and Commercial Grow Operations .................. ............................... 68 Ventilation....................................................................................... ............................... 68 WasteDisposal ................................................................................ ............................... 69 Waterand Light .............................................................................. ............................... 69 PART TEN: PRESENT AND FUTURE REGULATORY CHALLENGES ....................70 HomeGrow Operat ions ................................................................. ............................... 71 EdibleMarijuana ............................................................................. ............................... 72 Defining Public v. Private Use, Marijuana Cafes and Social Clubs ....................... 73 Employment and Drug Testing ..................................................... ............................... 75 Security............................................................................................ ............................... 76 Local Governments and Marijuana Regulation: AReso Guide forthe City of Sewed, Alaska PART ONE: INTRODUCTION Recent changes to Alaska's marijuana laws create significant legal challenges for state and local regulators. In November 2o14, Alaska voters approved Ballot Measure 2 (BM2), an act that legalized' personal recreational marijuana use and possession and allowed for the creation of a commercial marijuana industry that would tax and regulate marijuana in a manner similarto alcohol.' The effective date of the laws enacted by BM2 was February 24, zo15. On that date, personal possession of marijuana for recreational use became legal in the state, but commercial activity was still not permitted. Rather, on that date a nine -month rulemaking period began for the Alaska Marijuana Control Board (MCB) to craft the regulatory framework for the industry.3 That process was completed on November zo, zoi5.4Then, pursuant to the Alaska Administrative Procedures Act (APA), the final regulations were submitted to the Lieutenant Governor and Department of Law for 'Like Colorado's Amendment 64 and Washington's Initiative 502, Alaska's Ballot Measure 2 is credited with having "legalized" marijuana, but that term is misleading. "Legalized" Implies that an activity is no longer subject to any criminal or civil penalties. But marijuana remains a Schedule VIA controlled substance underthe Alaska Criminal Code, and failure to comply with state laws regulating marijuana cultivation, use, and sale can result in a penalty, ranging from a civil fine to felony prosecution. Thus, more accurately, Ballot Measure z legalized some marijuana conduct, decriminalized other conduct, and kept some conduct illegal. Despite these technicalities, the terms "legalize" and "decriminalize" are often used Interchangeably. See David Blake & Jack Finlaw, Marijuana Legalization in Colorado: Learned Lessons, 8 Harv. L. & Pol'y Rev. 359, 362 n•i3 (2024); Jason Brandeis, Ravin Revisited: Alaska's Historic Common Law Marijuana Rule At The Dawn Of Legalization, 32 Alaska Law Review 309,311 n.4 (2025). '2024 Ballot Measure No. 2 - 13PSUM An Act to Tax and Regulate the Production, Sale, and Use of Marijuana. Initiative summary text available at: http://www. elections .alaska.gov /docfbm!/BM2- %3PSUM- ballot - language.pdf. Full initiative text here: https:ltwww.commerce.alaska.gov /web /portals /gfpub /MJ_BallotMeasure2.pdf ' AS 17.38.o8o; AS 17.38.ogo(a). The 2024 General Election vote was certified on November 24, 2024. Statutes enacted by ballot measure take effect go days later. The effective date of implementation for BM2 was February 24, 2025. See "What is the timeline for implementation of the proposition ?" at https: //www. commerce. alaska. gov / web/ abc /MarijuanainitiativeFAQs.aspx. Ifthe board has not adopted regulations by this date, local governments have the option of establishing their own regulations. AS 27.38.110. 'The MCB adopted final marijuana industry regulations on November20, 2025, and amended them on Decembers, 2015. Local Governments end Madjuana Regulation: A Resource Guide forthe City of Seward, Alaska review. Numerous edits and corrections were made, and two regulatory provisions were rejected.s The final regulations, found in 3 AAC 3o6, took effect on February 21, zoi6.6 On February 24, 2o16, the MCB began accepting marijuana establishment license applications, as required by statute.7The MCB announced that it will issue cultivation and testing facility licenses first, with retail and product manufacturing licenses to follow. Such a sequence is intended to ensure that retail and manufacturing licensees will have access to legally grown and tracked marijuana for their inventories before opening for business. Additionally, all license holders will be required to use a specific marijuana inventory tracking system to assure that marijuana sold in licensed retail stores was grown, produced and tested by licensed establishments. The MCB has stated that no licenses will be issued before the tracking system is implemented. The anticipated date of implementation is May 23, 2o16. The MCB's tentative timeline contemplates approving the first marijuana cultivation and testing facility license applications in early June, and retail and manufacturing facility licenses in early September. Thus, by this fall, Alaska will be one of just four states where people will be able to lawfully grow, buy, and sell recreationale marijuana through a state - approved regulatory system. I The Department of,Law rejected regulations that required a national criminal history check and created an exemption to the testing facility requirement depending on certain geographic location and transportation limitations. See httris :laaws. state. ak. us/ OnlinePublicNotices /NoticeslAttachment aspx ?id- 1o22gl. Legislation is currently being considered that would resolve the criminal history check issue and provide authority forthe MCB to seek a national criminal history check forthose applying for a license to operate a marijuana establishment. 6The final regulations, reflecting the edits made by the Department of Law and signed by the Lieutenant Governor, are available here: hips / /vnvw commerce alaska govAveb /Portals /o /pub MCB /StatutesAndRegulationslaAAC ao 6 FINALCLEANCOPY.Odf. However, an official copy of the regulations will not be published until April 2026. 'AS 17.38.1oo(b) requires the MCB to begin accepting and processing applications to operate marijuana establishments one year after the effective date ofthe act, February 24, 2o16. 'The terms "recreational" and "medical" refer to the purpose for which marijuana use is authorized by law, not necessarily to a distinct type of marijuana, though there are certain strains of marijuana and marijuana derivatives which lack psychoactive properties and are therefore usually exclusively used for medical purposes. See Limited Access Marijuana Product Laws, Nat'l Conf. of State Legislatures, http://www.ncsl.org/research/health/state-medical- marijuana- laws.aspx #Table%2o2; Julie Anderson Hill, Banks, Marijuana, and Federalism, 65 Case W. Res. L. Rev. 597, 598 n.2 (2025); Recreational marijuana laws allow marijuana use for any personal purpose, and the sale of recreational -use marijuana is referred to as retail sale. See Local Governments and Marijuana Regulation: A Resource Guide for the city of Seward, Alaska Such a significant shift raises several legal concerns. First, marijuana remains prohibited by federal law. The Controlled Substances Act (CSA) makes it a federal crime to use, possess, or sell marijuana. The legalization of marijuana at the state level also poses conflicts with federal tax and commerce laws. Second, the ballot initiative tasked the State of Alaska's Alcoholic Beverage Control (ABC) Board with crafting regulations to govern the production, sale, possession, and use of marijuana. That responsibility then shifted to a newly - formed MCB,9 and that process was just recently completed. No licenses have been fully reviewed, granted, or denied at this time. Nor have any municipal governments had an opportunity to weigh in on license applications. Thus, though there is a complete regulatory framework now in place, the full legal landscape of marijuana regulation in Alaska has yet to unfold. This is significant, and this process must be closely monitored because the regulations, and nascent industry, will affect or involve nearly every area of legal expertise, including administrative law, banking, contracts, criminal law, employment law, intellectual property, land use and zoning, real estate, regulatory compliance, tax law, and torts. Furt her, the regulatory process has not resolved all of the legal issues raised by marijuana legalization. Additional statutory changes will be needed to mesh the marijuana regulations with existing state statutes and regulations, as well as with Alaska's existing common law rule governing personal marijuana use and Alaska's medical marijuana act. Finally, local jurisdictions will have significant input into managing marijuana businesses within their borders, including the opportunity to opt - out of certain aspects of the marijuana industry and the responsibility for monitoring compliance with public health, fire, safety, and tax ordinances. This resource guide provides general background on marijuana use and production, summarizes federal marijuana laws and Alaska state marijuana laws and regulations, and discusses issues related to local government administration of a marijuana industry within its borders. Given the role that local governments will play in investigating and enforcing the state regulations, as well as any locally - imposed conditions and requirements, it is important for municipalities to consider developing their own protocols and to be familiar with the state regulations governing inspection, license generally John Hudak, Colorado's Rollout of Legal Marijuana Is Succeeding: A Report on the State's Implementation of Legalization, G5 Case W. Res. L. Rev. 653. (2025). Conversely, medical marijuana laws require a physician's certification that an individual has a medical condition for which marijuana is a treatment. People may then use this reason as a defense against criminal charges for use and possession of marijuana. In some states, medical marijuana laws allow for the purchase and sale of marijuana for medicinal use. I See 203.5 SCS CSHB 223(FIN) available at https: / /www.commerce.alaska.gov /web /portals /g/pub/HB- 223.pdf Local G —mments and Marijuana Regulation: A Resource Guide forth. city of Seward, Alaska suspension and revocation, seizure of marijuana and marijuana products, and all public health and safety standards applicable to the marijuana industry. Local Governments and Marijuana Regulation: A Resource Guide forthe City of Seward, Alaska PARTTWO: MARIJUANA PRODUCTION AND CONSUMPTION TERMINOLOGY'° Marijuana is the general term for a preparation of the female" cannabis plant or its dried flowers for use as a psychoactive drug or medication. For most, this term connotes the stereotypical image of greenish dried plant mattes which can be rolled in a paper joint" or smoked in a pipe. While this type of consumption is still prevalent, methods of marijuana production and consumption have become quite varied in recent years; there are now numerous ways to prepare marijuana for consumption, and even more ways to actually consume it. To be effective, regulations governing marijuana use, cultivation, production, and sale must reflect current production and usage trends. Understanding the law of marijuana regulation first requires a familiarity with the terminology of the marijuana industry. To begin, marijuana is sought out because it contains cannabinoids, chemical compounds unique to the cannabis plant which are absorbed into the bloodstream upon use and then carried to the brain where they act upon the human brain's cannabinoid receptors. There are two main cannabinoids which produce significant effects: Tetrahydrocannabinol (THC), a psychoactive component that may produce feelings of euphoria, relaxation, or increased appetite, and Cannabidiol (CBD) which is often used as a medical treatment for pain, inflammation, anxiety, and to manage seizures without the psychoactive effects (the "high" or "stoned" feeling) associated with THC. Different strains of the cannabis plant contain varying proportions ofTHC and CBD. '" Information in this section is collected from several sources: (1) a white paper prepared by the Coalition for Responsible Cannabis Legislation (CRCL) and provided to the State of Alaska (available at http:/ /commerce. state .ak.us /dnn/ Portals /g/ pub / CRCL_ White .paper –provided_by_Coalition for Responsible _Cannabis_Legislation.pdO. The state seems to respect CRCL's views (two members of that group were appointed to the Alaska Marijuana Control Board; one presumes they will use their group's understanding of the terms in their official board work. https:// www.adn.com/article /zo1SO7o1/wa I ker- names -a pp ointees- alaskas -fi rst -marij uan a- control- board.); (a) Wikipedia ( https:// en. wikipedia .org /wiki /Cannabis_(drug)); (3) Leafly ( https: / /www.leafly.com /news /cannabis- iol/glossary-of- cannabis- terms); and The Cannabist ( http:/ twww.thecannabist.co /aoi4to6 /i3 /marijuana- terms- and - definitions - cannabis- lexicon- glossary-pot -term inol ogy/13174n "Female plants are distinct from male plants In that they are the ones that produce flowers which contain the high percentage of cannabinoids that hold both their psychoactive and medicinal properties. Local Governments and Marijuana Regulation: A Resource Guide forthe city of Seward, Alaska As stated above, the most historically common form of marijuana and means of consuming marijuana was to smoke part of the plant —to heat the plant material directly until it burned and then to inhale the smoke, either through a cigarette /joint or a pipe of.some part. The part of the plant that is smoked is the flower. Also referred to as "bud(s)" these are the "hairy," sticky, fluffy, crystal- covered parts ofthe plant located at the top ofthe plant stalks. Buds are harvested and used for recreational or medicinal purposes as they are the part of the plant that contains the highest concentrations of active cannabinoids. �3 Buds are dried and cured before consumption. " Licensed under Creative Commons Public Domain - https: //pixabay.com /p-269857/ "Other parts ofthe plant, such as the "fan leaves" (found on the upper part ofthe plant) orthe "sugar leaves" (found nearest the flowers) do not contain high levels of THC and are often discarded. However, 'trim,' which refersto any leftoverplant material (including the leaves and flowers) may be processed to produce kief, hash oil, or other concentrates. The stalks of the cannabis plant are used in the production of hemp. It is worth noting that all parts of the cannabis plant are included in the definition of marijuana, discussed below. ►+ ON Local Govemments and Marijuana Regulation: A Resource Guide forthe City of Seward, Alaska DRIED MARUUANA FLOWER /BUD'4 As the rate of consuming marijuana by smoking marijuana flower has decreased, consumption of marijuana derivatives called "concentrates" has increased. Concentrates have gained in popularity because they offer a more potent consolidation ofTHC than the traditional flower buds. The main forms of marijuana concentrates are: Kief: Kief is a collected amount of trichomes that have been separated from the cannabis plant. Trichomes are the resin production glands of the cannabis plant, appearing as small outgrowths on the surface of the flowers and upper leaves of the cannabis plant. They are often described as hairs or crystals, though technically they are neither. THC, CBD and other cannabinoids are all produced in these glands. 4" Licensed under Public Domain via Wikimedia Commons - https:// commons. wikimedia .org /wiki/File:Bubba_Kush.jpg# /media /File:Bubba_Kush.jpg 20 Local Governments and Marijuana Regulation: A Resource Guide forthe city of Seward, Alaska MARIJUANA BUD WITH TRICHOMES" Kief is separated from the rest of the plant by mechanical or thermal processes (e.g., sieve, filter, freezing the flowers allows the trichomes to be shaken off and gathered). Since the trichomes contain the majority of the cannabinoids, kief is known to be extremely potent. Kief can be smoked or eaten by itself or used to create hash, oils, or edible products. '5 Licensed under Public Domain via Wikimedia Commons - https: / /co m mons.wiki m edi a.org/wiki/File: Kol kata -Kutjp g #/media /File: Kolkata -Kut. jpg Local Governments and Marijuana Regulation: AResource Guide forthe ory of Seward, Alaska • Hash (or hashish): Hash is kief (essentially a powder of pure trichomes) pressed into a small block of solid material. 'a "Kiel (yellow)' by MJpresson -Own work. Licensed under CC BY 3.0 via Wikimedia Commons https: // commons .wikimedia.orgfwiki /File:KleL (yellow)jpg# /media /File:K!ef (yelfow).jpg Local Governments and Marijuana Regulation: A Resource Guide for the uty of Seward, Alaska HASH/HASHISH17 • Hash Oil: An extract produced by exposing cannabis plant material to a solvent and then evaporating the solvent. What remains is a sticky resinous dark oily liquid. Hash oil can be consumed directly into the lungs, or used to create edible products or tinctures. Hash oil has become very popular because of its high potency. Some extractors used in the hash oil production process are similar in design to a coffee machine, where the solvent drips through the marijuana and leaches out the cannabinoids. The process for extraction can also be similar to that used to extract lavender oils, vanilla extract, or otherfamiliar oils and extracts. 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OHS :(,,OHS „) 110 4seH auelnS ai7/OHSVH e:lsvltl'p�vn�a5lo ND aip�o� aping avnosay y:uvl7eln6ay euen(Dey,l pue quawwanog lawl v)lsvltl' WvixaS) o, Qpay7jojvpingavnosaay:uopeln6aa euen(Nery puv 7uawwanoglew1 Lxal Governments and Marijuana Regulation: AResource Guide for the City of Seward, Alaska BUTANE HASH OIL "HONEY- SHATTER • Tincture: A tincture is a liquid marijuana extract made with alcohol or glycerol. Tinctures are made by extracting cannabino)ds from marijuana flowers using '" By Vjiced (Own work) [CC BY -SA 3.0 (http: // creativecommons .orgPicenses /by- sa/3.0)], via Wikimedia Commons i6 Local Gowrnmenb and Marijuana Regulation: A Resource Guide forth a city of Seward, Alaska high -proof spirits. Tinctures are ordinarily consumed orally by using a dropper to place the tincture under the tongue. Tinctures can also be applied to the skin. TINCTURE" • Infusions: Leaves, flowers, or concentrates may be infused into a solvent (such as butter, cooking oil, glycerin, or skin moisturizer) and then used to prepare marijuana foods (edibles) or applied topically. 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These are food products which existed without marijuana in a form ready for consumption to which marijuana was subsequently added. For example, candy bars or Gummy Bears sprayed down with a marijuana concentrate and then repackaged and sold. • Waping" refers to using a vaporizer to consumer marijuana. Vaporizers heat marijuana - infused oils (or parts of the plant itself) to a temperature that produces a cannabinoid -laced vapor to inhale. Many believe vaporizing is healthier than smoking since there is no smoke to ingest; nothing is burned in a vaporizer. Vaporizers are now very compact (similar to e- cigarettes) and have correspondingly gained in popularity. " "KCCS Cookie" by Subvertc - Own work. Licensed under CC BY -SA 3.0 via Wikimedia Commons - https:// commons. wlkimedia .org /wiki /File:KCCS_Cookie.JPG# /media /File:KCC$_Cookie.JPG Local Governments and Marijuana Regulation: A Resource Guide forthe city or Seward, Alaska "Dabbing" involves dropping marijuana concentrates onto a heated surface (such a skillet or a nail) and inhaling the resulting fumes /smoke /vapor. Local Governments and Marijuana Regulation: A Resource Guide for the Qty of Seward, Alaska PARTTHREE: OVERVIEW OF FEDERAL AND STATE MARIJUANA LAWS State and federal laws governing the regulation of marijuana can be quite different. Marijuana use, possession, and distribution are prohibited under federal law and as such carry strict criminal penalties. For many years, all state marijuana laws largely mirrored federal law and banned marijuana. But recently a number of states, including Alaska, have enacted marijuana laws that diverge from the federal prohibition. Alaska is one of 23 states (and Washington, D.C.) whose laws permit medical marijuana use, and is one of four states where a taxed and regulated commercial marijuana industry will exist for recreational marijuana. Understanding the distinctions between federal and state marijuana laws, as well as where those laws overlap, is crucial for lawmakers and regulators in states with marijuana industries. Federal Marijuana Prohibition In 197o, the federal government enacted the Controlled Substances Act (CSA), a comprehensive drug law that classified substances in five different categories (referred to as schedules) according to their medical value, potential for danger, and likelihood of addiction and abuse.i6 Penalties for violation of each schedule varied, with Schedule I N substances considered the most dangerous, and therefore the most restricted, with harsh punishments for possession, use, or distribution. Marijuana is listed as a Schedule I narcotic because it has "a high potential for abuse," "no currently accepted medical use in treatment," and "a lack of accepted safety for use of the drug or other substance under medical supervision.. "'r Other drugs included in Schedule I include ecstasy, heroin, LSD, and peyote.i6 Under the CSA, criminal penalties for use, possession, and sale of marijuana are serious and can include life in prison depending upon the amount of marijuana involved and the circumstances surrounding the conviction.'9The CSA remains in force and the Supreme Court has upheld the federal government's ability to regulate marijuana3a Federal courts have 2128 U.S.C. j 8o1 et seq. 21 U.S.C. § 812, (b)(1)(A) —(Q '8 2-1 U.S.C. §§ 822(b)(1), 822(c)(c)(20) (2022). " 22 U.S.C. § 841(b) (2022). Gonzales v. Raich, 545 U.S. 2, 22 (2005). Local Governments and Marijuana Regulation: A Resource Guide forthe city of Seward, Alaska also repeatedly affirmed the Drug Enforcement Agency's (DEA) decision to keep marijuana in Schedule 13' Despite this federal prohibition, over the past 20 years a number of states have passed laws decriminalizing or legalizing limited types of marijuana use within their borders. Beginning with California in the mid- iggos, states started passing medical marijuana laws, which allowed the use of marijuana to treat certain health conditions. Alaska was among the first four states to enact such a law, approving a medical marijuana law by ballot initiative in -1998. Currently, 23 states and Washington, D.C. permit some level of marijuana use for medical purposes, though the details vary byjurisdiction3' In response to increased acceptance at the state level, and growing popular and political support for medical marijuana, federal policy began to shift. In 2oog, the "Ogden Memo," prepared by the Obama Administration's Department of Justice, announced a significant change. The "Ogden Memo" explained that federal resources should not focus on prosecuting individuals acting in concert with their state's marijuana laws.33 This was viewed as a "hands- off'34 polity toward enforcement of federal marijuana laws in states where marijuana use was authorized under those states' laws. But in 20 -1 -1, in response to the expansion of marijuana industries in several states, the Department of Justice explained that the Ogden Memo had been misread by those who saw it as a "green light° to begin large -scale marijuana production35 The "Cole Memo" stepped, federal policy back from the Ogden Memo by clarifying that state and 3' Americans for Safe Access v. Drug Enforcement Admin., 7o6 F.3d 438, 440 - 41(2013). There is significant debate as to whether marijuana belongs in this schedule. See, e.g., Chemerinsky, Cooperative Federalism 62 UCLA L. REV. 74, 82 at n. 22. " See http : / /medicalmariluana.procon.orgl view .resource.php ?resourcelD= 00088z for a complete list and restrictions /requirements for each law "In that memorandum, Deputy Attorney General David Ogden wrote to U.S. Attorneys around the country, providing them with enforcement priority guidance: "As a general matter, pursuit of [federal] priorities should not focus federal resources in your States on individuals whose actions are in clear and unambiguous compliance with existing state laws providing for the medical use of marijuana." U.S. Dept Of Justice, Office Of The Deputy Attorney General, Memorandum For Selected United States Attorneys: Investigations And Prosecutions In States Authorizing The Medical Use Of Marijuana 2 -2 (2009). Available at: http: /twww.justice.gov /sites /default/files /opa/ legacy /2oog /10 /ig/medical- marijuana.pdf "Chemerinsky, Cooperative Federalism and Marijuana Regulation, 62 UCLA L. Rev. 74, 87 (2025). 31 Id. at 87. 22 23 N w Local Governments and Marijuana Regulti n: AResource Guide forthe City of Seward , Alaska local laws permitting marijuana activity were not a defense to federal prosecution 36 A number of enforcement actions followed, or were threatened, and wound up shutting down numerous medical marijuana businesses operating in accordance with state laws throughout the country.37 The November 2012 general election brought the need for an additional federal statement about state -level marijuana regulation. There, voters in Colorado and Washington approved ballot measures that would legalize personal recreational marijuana use for adults 21 years and older and to allow the licensed commercial sale of marijuana. These laws repealed criminal penalties for possession of small amounts of marijuana and directed the state legislatures create frameworks to tax and regulate the production and sale of marijuana for recreational purposes. These two states would now allow adults to lawfully purchase and sell marijuana for recreational purposes —not just marijuana for medical use—in retail establishments. In response, the United States Department of Justice (DOJ) explained that while it remains committed to enforcing the federal marijuana prohibition, it would not immediately take legal action to attempt to overturn the Colorado and Washington laws. Instead it would take a 'trust but verify" approach. The "Cole Memo il" outlined several key parts of this new policy: it allowed the Colorado and Washington recreational mar Juana legalization laws to go into effect; permitted medical marijuana distributors and suppliers operating in compliance with state laws to continue; and reiterated that federal resources should not be used to prosecute seriously ill medical marijuana patients, their caregivers, or individuals who possess small amounts of marijuana for other personal uses3g The linchpin of the policy is that it requires state governments to take an active role in creating and implementing "strong and effective regulatory and enforcement systems" to mitigate the potential harm legalization and decriminalization could pose to public health, safety, and other law enforcement efforts. If state regulatory protocols are "Id. at 88; U.S. Dept Of Justice, Office Of The Deputy Attorney General, Memorandum For All United States Attorneys: Guidance Regarding The Ogden Memo In Jurisdictions Seeking To Authorize Marijuana For Medical Use z (201-1) [hereinafter Cole Memo), available at http: / /www•j ustice.gov/s ites/ default /files /oip fie gacy /2014/07 /z3 /dag- guidance- zoii -for- medical -marij uan a -use.p df "Id., Kamin, The Limits of Marijuana Legalization in the States, Iowa Law Review Bulletin, Vol. 99.39 at 40 -41. Available at: http:/(Ir. law. ulowa. edu/ filesfir .law.uiowa.edu /files/ILRB -9g Kamin.pdf 38Cole Memo II available at: http: / /www•justice.g ov /iso /op a /resou rceS/3052013829132756SS7467. pdf 24 Local Governmentsand Marijuana Regulation: A Resource Guide forthe Cityof Seward, Alaska eventually found to be insufficient, DOJ could challenge the states' regulations themselves and /or bring individual enforcement or criminal actions. The memo also identified eight instances where federal marijuana laws would still be enforced by DOJ, irrespective of state laws, in order to prevent: • distribution of marijuana to minors; • revenue from marijuana.sales going to criminal enterprises; • exportation of marijuana from states where it is legal to states where it is not; • the use of state - authorized marijuana activity as a cover or pretext for other illegal activity; • violence and use of firearms in the cultivation and distribution of marijuana; • driving under the influence of marijuana and other public health consequences associated with marijuana use; • growing marijuana on public lands; and • marijuana use or possession on federal property. In short, at this time, the federal government will largely leave states alone to regulate marijuana within their borders, so long as the regulatory processes are sufficiently strict, federal concerns are addressed, and potential negative consequences are minimized. This approach respects state sovereignty and allows state -level marijuana legalization experiments to continue. However, the shift from the Ogden Memo policy to the federal government "flexing its muscle" under the Cole Memo and then back to an even more relaxed approach with the Cole Memo II illustrates the danger of relying too heavily on such executive policies. Such policies can change without notice and without formal legislative or court action. Essentially, DOJ has made a non - binding promise to forestall enforcement of the federal marijuana prohibition —a promise which exists at the whim of the current executive with no guarantee it will be continued by the next administration 39 This leaves the states that have "legal- but - not - entirely - legal "4a marijuana in a precarious situation. In addition to the fear of arrest, criminal prosecution, and asset forfeiture for marijuana professionals (growers, the owners and employees of dispensaries, investors, etc.) other difficulties exist that can stall the development of a legal marijuana industry. Section 28oE of the Internal Revenue Code prohibits "See David Blake & Jack Finlaw, Marijuana Legalization in Colorado: Learned Lessons, 8 Harv. L. & Pol'y Rev. 359,362 n.6 (2014) `e Chemerinsky, Cooperative Federalism and Marijuana Regulation, 62 UCLA L. Rev. 74, 113 (2015). 25 N A Local Governments and Marijuana Regulation: A Resource Guide forthe City of Seward, Alaska marijuana business operators from deducting operating expenses, such as rent and the costs of paying employees, from their taxes.41This puts marijuana businesses at a serious disadvantage and makes running a marijuana business very difficult. Another burden is the difficulty marijuana businesses have in obtaining basic banking services .41 The original Cole Memo warned financial institutions that knowingly engaging in transactions involving the proceeds of activities known to be violating the CSA may also be in violation of federal drug laws, federal money laundering laws, and other federal commerce and financial laws. As a result, banks and credit card companies have ceased working with marijuana businesses, leaving the marijuana industry mostly a cash -only enterprise. This requires businesses to keep lots of cash on hand, to pay their employees and tax bills with cash, sets them up as prime crime targets, makes it more difficult to track sales, enforce tax payments, and prevent illegal diversion. State and local jurisdictions must also wrestle with questions about contract law (whether contracts with marijuana businesses may be deemed unenforceable), employment law {such as whether employees can be terminated for off -duty marijuana use), whether marijuana use can be a grounds forrevocation of probation or parole.43 The federal government has taken limited action to remedy these problems. In February 2024, the US Justice Department and Treasury Department issued joint statements on how banks could work with marijuana businesses. Adherence to strict guidelines was required and many banking institutions were still hesitant to enter the industry due to fear of fines or other penalties. At the end of 2024, the U.S. Treasury Department's Financial Crimes Enforcement Network reported there were 205 banks and credit unions working with legal -state marijuana companies. In late 2ol , a survey found that 60% of legal marijuana businesses do not have bank accounts. The recently - passed federal budget included several marijuana provisions. One prevents the Department of Justice and the Drug Enforcement Agency from spending any money on interfering with state medical marijuana laws, the other prevents the DOJ and the DEA from using funding to interfere with state research programs for industrial hemp.", "See Kamin, The Limits of Marijuana Legalization in the States, Iowa Law Review Bulletin, Vol. 99.39 at 4S and Leff, Tax Planning for Marijuana Lawyers (available at: http: / /pa p ers.ssm.cOm fsOI3 /pap ers.dm ?a bstract_id= 22264x6) "See Kamin, Id. at 47. "Id. 44-47 "http:lJK i.adn.comlarrlr�201 S 222. con rgss- softe n arl m uana_poliry-kevobstacles- remain- alaskas -oath - 26 Local Governments and Marijuana Regulation: A Resource Guide forth. city of Seward, Alaska Over the past few years, Congress has considered several other pieces of legislation aimed at remedying this tension between state and the federal law. To date, none of these bills "have gained much traction:"s Examples include bills that would: • remove marijuana from the CSA schedule of drugs and the enforcement and punishment provisions of the federal code;46 • reschedule marijuana to allow marijuana for medical use in the states where medical marijuana has been legalized and to ensure "an adequate supply of marijuana is available fortherapeutic and medicinal research;-47 • amend the asset forfeiture provisions of the CSA to prohibit the seizure of real property used in activities performed in compliance with state marijuana laws;ye • prohibit the DEA and the DOJ from spending taxpayer money to raid, arrest, or prosecute medical marijuana patients and providers in states where medical marijuana is legal ;4' • prohibit any provision of the CSA from being applied to any person acting in compliance with state marijuana laws;'* and • provide legal immunity from criminal prosecution to banks and credit unions providing . financial services to marijuana - related businesses acting in compliance with state law.'' "See Chemerinsky, supra, at 213-24 (listing proposed bills). `6 Ending Federal Marijuana Prohibition Act of 2013, H.R. 499, 223th Cong. § 201 (2023). Federal law would continue to prohibit trafficking and the unlicensed cultivation, production, manufacturing, and sale of marijuana. "States' Medical Marijuana Patient Protection Act, H.R. 699, 123thCong. § 4 (2023), "a States' Medical Marijuana Property Rights Protection Act, H.R. 784, 223thCong. §3 (20-13). H. Arndt. 748, 223th Cong. (2023 -24) (amending Commerce, Justice, Science, and Related Agencies Appropriations Act, H.R. 4660, 223th Cong. (2023 -24)). se Respect State Marijuana Laws Act of 2023, H.R. 2S23i 213th Cong. S 2 (2023), "Marijuana Business Access to Banking Act of 2023, H.R. 2662, 213th Cong. § 3 (2023). Loral Govemmentsand Marijuana Regulation: A Resource Guide for the City of Seward, Alaska Alaska State Marijuana Laws Much like the federal Controlled Substances Act, on its face the Alaska Criminal Code prohibits all marijuana - related activity.' There are, however, three exceptions to Alaska's general proscription of marijuana which allow marijuana use under state law in limited circumstances. The first is the result of the ballot measure enacted by Alaska voters in 2oi4. Ballot Measure 2, titled "An Act to tax and regulate the production, sale, and use of marijuana," created new state statutes that permit persons over 21 years of age to use marijuana for recreational purposes and instructed the Alaska Legislature to develop a regulatory scheme for the taxation and regulation of recreational marijuana production and sale.' Alaska is now one ofjust four state that will allow the taxation and regulation of retail recreational marijuana. The second exception comes from the Medical Uses of Marijuana for Persons Suffering from Debilitating Medical Conditions Act, originally passed by voters as another ballot in i998.0 This law permits individuals who have consulted with a doctor and registered with the state to use marijuana to treat "debilitating medical conditions. "ssThe last exception comes from the Ravin Doctrine, a common law rule created through a series of state court decisions beginning in -1975. Ravin allows adults over ig to possess a small amount of marijuana in the home for personal use.56 These three exceptions are discussed in greater detail in a subsequent section. Interplay Between Federal and State Marijuana Laws As explained above, the CSA makes all marijuana possession, use, and sale illegal, and violations of the CSA's marijuana provisions carry steep criminal penalties. Thus, those who use, possess, grow or sell marijuana in compliance with state laws that tax and regulate medical or recreational marijuana still violate federal law and can be "See AS 11.71.o6o(a)(1) (stating penalty for display of any amount of marijuana). However, Alaska has historically rated marijuana offenses as among the least serious of all drug offenses and continues to classify it as a Schedule VIA substance —a drug with the lowest degree of danger to a person or the public. Waters v. State, 483 P.2d 199, 20-1 (Alaska 1971) (finding an absence of foundation for characterization of marijuana offender as the worst type of drug offender for sentencing purposes); AS 11.7-1.1go(a), (b). "See generally AS 17.38 et seq. ss AS 17.37.080 ss AS 17,37.070(4) 56 Jason Brandeis, Ravin Revisited: Alaska's Historic Common Law Marijuana Rule At The Dawn Of Legalization, 32 Alaska Law Review 309,337 (2015)• Local Govemmema and Marijuana Regulation: AResource Guide forthe City of Seward, Alaska prosecuted for doing so. The idea that the same conduct could be legal and illegal in the same jurisdiction at the same time is a complicated and confusing concept. The legal question raised here, whether the federal CSA preempts, and thereby renders invalid, state laws that conflict with the CSA, hovers over all discussions of changes to state and local marijuana law and policy. Federal preemption of state laws is based on the U.S. Constitution's Supremacy Clause, which states that federal law is "the supreme law of the land" and it trumps conflicting state laws. The constitutional question at issue turns on whether state laws legalizing marijuana create such an impermissible "conflict" such that the CSA prohibits any and all marijuana use and possession. No federal court has answered the broad question of whether the federal CSA preempts state laws that conflict with the CSA, and full analysis of this question is beyond the scope of this guide.' But, in short, legal scholars cite the Tenth Amendment's anti - commandeering rule as the counterbalance that protects a state's ability to enact marijuana legislation that diverges from federal policy. The anti - commandeering rule precludes the federal government from forcing states to enact coexistent, or even complimentary, controlled substance laws, or from requiring state officers to enforce federal drug laws within the state.sa States can therefore experiment with different legalization and decriminalization programs, but the resulting state - federal relationship is complicated and potentially antagonistic. n Several state courts have ruled against local government officials seeking to invalidate state medical marijuana laws as preempted by federal law. The U.S. Supreme Court denied certiorari when it was sought in these cases. See Chemerinsky, 62 UCLA L. Rev 74, at 102 and Mikos, On the Limits of Supremacy: Medical Marijuana and the States' Overlooked Power to Legalize Federal Crime, 62 Vand. L. Rev. %4ag. "New York v. United States, 505 U.S. 144, 162 (1992) ( '(T)he Constitution has never been understood to confer upon Congress the ability to require the States to govem according to Congress' instructions "); Printz v. United States, 521 U.S. 698, 935 (1997) (holding that Congress cannot compel states to enact or enforce a federal regulatory program); Robert A. Mikos, On The Limits Of Supremacy: Medical Marijuana And The States' Overlooked Power To Legalize Federal Crime, 62 VAND. L. REV. 1421, 1446 (2oog) ( "The preemption power is constrained by the Supreme Court's anti- commandeering rule. That rule stipulates that Congress may not command state legislatures to enact laws nor order state officials to administer them. "). 28 29 Local Governments and Madjuana Regulation: A Resource Guide forth city of Seward, Alaska PART FOUR: THE LEGAL STATUS OF MARIJUANA IN ALASKA As explained above, Alaska's marijuana laws are unique in the nation. Three other states, Colorado, Washington, and Oregon, currently allow personal possession and retail sale of limited amounts of marijuana for recreational use.sgTwenty -two other states and Washington, DC allow some form of marijuana cultivation, sale, and use for medicinal purposes. But only Alaska combines recreational and medical marijuana legalization with a common-law right to personal marijuana use in the home. The result is a complex system that permits limited marijuana use under various fact- specific circumstances based on three separate bodies of law. Whether marijuana - related activity is permitted under Alaska law ultimately depends on the location of the activity, the amount of marijuana in question, and the age ofthe possessor. It is important to note that the term "marijuana" can refer to numerous derivatives of the cannabis plant, all taking different forms, having different methods of consumption, and containing varying levels of psychoactive chemicals. The Alaska Statutes currently contain two definitions for marijuana. The most recent was added by 2014 Ballot Measure 2, which defines marijuana as: all parts of the plant of the genus cannabis whether growing or not, the seeds thereof, the resin extracted from any part of the plant, and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or Its resin, including marijuana concentrate. "Marijuana" does not include fiber produced from the stalks, oil, or cake made from the seeds of the plant, sterilized seed of the plant which is incapable of germination, or the weight of da Pursuant to Oregon Ballot Measure 91 (passed November 2014), Oregonians may currently grow limited amounts of marijuana on their property and possess limited amounts of recreational marijuana for personal use. This home grow /personal possession provision took effect on July 1, 2015. The Oregon Liquor Control Commission (OLCC) also has the authority to tax, license and regulate recreational marijuana grown, sold, or processed for commercial purposes. The OLCC will begin accepting applications for growers, wholesalers, processors and retail outlets on January 4, 2o16 with the ability for consumers to buy marijuana at a retail outlet expected to start during the fall of 2o16. http: / /www.ore gon.gov /oicc/m arijuan a /Pages/Frequently- Asked- Questi on s.aspk. In late July the Governor of Oregon signed a bill that will allow medical marijuana dispensaries in Oregon to sell small amounts of marijuana to adults over 21 for recreational purposes beginning on October 1, 2o15. That law will sunset on December 31, 2o16. http: / /www.reuters.coml article /2015 /o7 /3o /us -usa- marijuana- aregon- IdUSKCNo04o452015073o; http: / /whatslegaloregon.com/ #gift -or- share. 30 Local Governments and Marijuana Regulation: A Resource Guide forthe city of Seward, Alaska any other ingredient combined with marijuana to prepare topical or oral administrations, food, drink, or other products." This definition incorporates the different methods of marijuana production and consumption described above, but it differs slightly from the preexisting definition found in the Alaska Criminal Code6' The main difference is that the statutory definition created by the initiative specifically includes "resin extracted from any part of the plant, and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or its resin, including marijuana concentrate." AS 17.38.goo(6). Conversely, the previous definition specifically excludes "the resin or oil extracted from any part of the plants, or any compound, manufacture, salt, derivative, mixture, or preparation from the resin or oil, including hashish, hashish oil, and natural or synthetic tetra hydrocannabinol" from the definition of marijuana. AS 11.71.goo(14). This is significant because the new definition allows for marijuana derivatives and concentrates such as hash and hash oil to be considered "marijuana," listed as a Schedule VIA controlled substance (one with the least potential for harm and danger) instead of being separately listed as Schedule IIIA controlled substance, which has a higher degree of probable danger and a corresponding greater penalty for use."' The incongruence between these definitions illustrates the complexity of modem marijuana regulation. "Traditional" marijuana, the actual flowers and buds, or other smoke -able THC- containing parts ofthe cannabis plant, are now consumed /used apace with other marijuana derivatives, such as edibles and concentrates.63 '*AS 17.38.goo(6) "The Alaska Criminal Code states the following: "marijuana" means the seeds, and leaves, buds, and flowers of the plant (genus) Cannabis, whether growing or not; it does not include the resin or oil extracted from any part of the plants, or any compound, manufacture, salt, derivative, mixture, or preparation from the resin or oil, including hashish, hashish oil, and natural or synthetic tetrahydrocannabinol; it does not include the stalks of the plant, fiber produced-from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation ofthe stalks, fiber, oil or cake, or the sterilized seed ofthe plant which is incapable ofgermination. AS 21.71.900(14). da AS 21.71.060(f)(1),(2) "The statutes created by BM2 provide some additional clarification by defining terms such as "marijuana products" ( "concentrated marijuana products and marijuana products that are comprised of marijuana and other ingredients and are intended for use or consumption, such as, but not limited to, edible products, ointments, and tinctures." AS 17.38.900(11)) N J Local Governments and Marijuana Regulation: A Resource Guide for the City of geward, Alaska Personal Marijuana Use, Possession, Cultivation, and Transfer Recreational Marijuana Alaska law allows individuals to possess and use marijuana for recreational (i.e., non- medical) purposes. The following ads are legal under Alaska state law, if performed by persons 21 years of age or older: • Possessing, using, displaying, purchasing, or transporting one ounce or less of marijuana 64 • Possessing, growing, processing, or transporting no more than six marijuana plants (with three or fewer being mature, flowering plants).65 • Possession of the marijuana produced by lawfully- possessed marijuana plants on the premises where the plants were grown66 • Transferring one ounce or less of marijuana and up to six immature marijuana plants to a person who is 21 years of age or older without remuneration.'' • Non- publie""consumptioniig of marijuana' • Assisting another person who is 21 years of age or older with any lawful marijuana conduct described in AS 17.381 • Possessing, using, displaying, purchasing, or transporting marijuana accessories.7' 6' AS 17.38.020(1) 66 AS 17.38.020(2). 66 AS 17.38.020(2) 6' AS 17.38.020(3) 68 "In public" means in a place to which the public or a substantial group of persons has access and Includes highways, transportation facilities, schools, places of amusement or business, parks, playgrounds, prisons, and hallways, lobbies, and other portions of apartment houses and hotels not constituting rooms or apartments designed for actual residence. 3 AAC 304.990(a)(6)(A) -(B). it does not include an area on the premises of a licensed marijuana retail store designated for on -site consumption. 3 AAC 3o6.99o(a)(6)(q. fig consumption means the act of ingesting, inhaling, or otherwise introducing marijuana into the human body. AS 17.38.900(3) "AS 17.38.020(4) ' AS 17.38.o2o(e) 7' AS 17.38.010(1), .060 32 Local Govemmems and Marijuana Regulation: A Reso —Guide forth, Oty of Seward, Alaska • Manufacture, possess, or purchase marijuana accessories.73 • Distribution or sale of marijuana accessories to a person who is 21 years of age or older.74 Medical Marijuana Alaska law allows individuals to possess and use marijuana to treat certain medical conditions under the direction of a physician.)$ An individual seeking to do so must first become a registered medical marijuana patient by submitting an application tojoin the Medical Marijuana Registry.j6 The application is submitted to the Alaska Bureau of Vital Statistics and must contain a physician's statement certifying that the patient suffers from a "debilitating medical condition "77 and that the patient might benefit from the medical use of marijuana"ifthe application is approved, the Division will then issue an identification card and add the applicant's name to the state registry of all authorized users.79 Registered patients may then possess up to one ounce of marijuana and six plants (of which only three can be flowering and producing usable marijuana at any time).e* They may not smoke marjuana in public, but may possess it in public under certain conditions: the marijuana must be in a sealed container, the marijuana must be concealed, and the individual must be transporting it to a location where it is permissible to use )t8' "AS 17.38.060 "AS 17.38.060 "AS 17.37.0107.37.080 (2012) "Application available at: http: / /dhss.alaska.g ov /dph/Vita]St ats/ Documents /P DFs /M a dical Ma rij uan a.pdf "See AS 17.37.070(a) -(c) (broadly defining "debilitating medical condition" as Including "cancer, glaucoma, positive status for immunodeficiency virus, or acquired immune deficiency syndrome" or any othei chronic diseases, or treatment for such diseases, which produce "cachexia; severe pain; severe nausea; seizures, including those that are characteristic of epilepsy, or persistent muscle spasms, including those that are characteristic of multiple sclerosis. "). "AS 27-37-010(c). 79 AS 17.37.010. go. AS 17.37•040(a)(4)(AH13)• et. AS 17.37•040(a)(2)(A)--(Q• 33 Local Governments and Marijuana Regulation: A Resource Guide forth¢ City of Seward, Alaska A medical marijuana patient may also designate a "primary caregiver" and an "alternative caregiver. "8i The caregiver designation means patients with debilitating illnesses do not have to be responsible for procuring or cultivating their own marijuana; designated caregivers may possess marijuana to the extent the individual they are caring for can 83 The medical marijuana law does not authorize patients or caregivers to buy or sell marijuana.84 Registered medical marijuana patients and their caregivers have an affirmative defense to prosecution for marijuana- related activity that would otherwise violate state law.85 The Ravin Doctrine The Alaska Supreme Court's 1975 decision in the case Ravin v. State ofAiaska ('Ravin' created a legal doctrine that permits adults (those over 1g years of age) to possess and use a modest amount of marijuana in their homes.86 Ravin was based on an interpretation of the Alaska Constitution's right of privacy. The court balanced that right against the state's interest in promoting public health and safety by banning all marijuana use. Ultimately, the court found that any potential negative impacts of "' AS 17.37.02o(a). 8" See AS 17.37.04o(a)(3) ( "a patient may deliver marijuana to the patient's primary caregiver and a primary caregiver may deliver marijuana to the patient for whom the caregiver is Iisted'J. Neither the Act nor the - Alaska Administrative Code specifically defines the duties of a primary or alternative caregiver. See AS 17.37.010- 17.37.080 (omitting a definition of a primary or alternative caregiver). But the Act does explain that if the medicinal marijuana patient is a minor, the minors parent or guardian must serve as the primary caregiver and "control the acquisition, possession, dosage, and frequency of use of marijuana by the patient" 17.37.010(c)(3). It follows that the caregiver for an adult patient would serve in a similar role. AS "Alaska law only permits the primary caregiver to "deliver" marijuana to his or her patient, and vice versa. AS 17.37.040(a)(3). "Deliver" means the "actual, constructive, or attempted transfer from one person to another of a controlled substance whether or not there is an agency relationship." AS 11.71.goo(6). Conversely, such a noncommercial transfer is not permissible under Ravin. See Wright v. State, 6s1 P.2d 846, 849 (Alaska Ct. App. 1982) ( 'We conclude that non - commercial transfers of small quantities of marijuana must be deemed to fall within the ambit ofthe prohibition against distribution which is contained in AS 17.12.01o.y. es AS 17.37.o3o(a). e6 S37 P.2d 494 (Alaska 1975)• Local Governments and Marijuana Regulation: A Reource Guide for the City of Seward, Alaska recreational marijuana use by adults in the privacy of their homes were not harmful enough tojustify a blanket marijuana ban. The activity protected by the Ravin Doctrine (which includes Ravin and several subsequent opinions) is narrow. It only applies to personal use and possession of small amounts of marijuana in the privacy of the home (an amount currently understood by the Alaska courts as less than four ounces).87It does not permit transporting marijuana in public, commercial marijuana activity, any marijuana use by minors, or driving under the influence of marijuana. Personal Marijuana Cultivation ("Home Grow11 Alaska law allows people 21 years and older to cultivate marijuana for personal use (known as a "home growl, subject to the following limitations: • A person 21 years of age or older may grow up to six marijuana plants, three of which may be mature, flowering plants.' • Marijuana must be grown in a location where the plants are not subject to public view without the use of binoculars, aircraft, or other optical aids,89 • Marijuana plants must be secure from unauthorized access;'* • Marijuana may only be grown on property lawfully in possession of the cultivator or with the consent of the person in lawful possession of the property g' • Persons 21 and over may possess, purchase, distribute, or sell marijuana grow accessories." 81 This four ounce limit includes usable marijuana as well as the weight of any marijuana plants. See Noy v. State. "For purposes of calculating the aggregate weight of a live marijuana plant, the aggregate weight shall be one -sixth of the measured weight of the marijuana plant after the roots of the marijuana plant have been removed." AS 11.71.080. 88 AS 17.38.010(2). 8g AS 17.38.o3o(a)(1) 'o AS 17.38.030(a)(2). "AS 17.38.030(a)(3)• "AS 17.38.060, AS 17.38.9oo(7). Local Governments and Marijuana Regulation: A Resource Guide forthe City of Seward, Alaska Commercial Marijuana Production And Sale Comparison of State Laws Regulating Commercial Marijuana Production And Sale Colorado, Washington, Alaska, and Oregon have legalized the limited possession, cultivation, and recreational use of marijuana for adults 22 years old and over. Via ballot initiatives in 2022, Colorado and Washington became the first states to approve regulatory systems for retail recreational marijuana sales. Alaska and Oregon followed suit in 2024, and those states are in the process of implementing their regulatory frameworks. The laws governing marijuana production, sale, and use in these four states share some similarities: for example, all four prohibit sales to persons under 22 and do not allow marijuana use in public. But there are significant differences as well: Washington does not permit any home cultivation for personal use; Alaska and Oregon levy excise taxes at the wholesale level based on the weight of the marijuana sold, whereas Colorado and Washington tax the value of wholesale and retail transactions; and Alaska is the only one of the four states without a designated revenue use plan for marijuana taxes; and licensure fees vary amongst the states 93 Marijuana Establishments The laws enacted as part of Ballot Measure 2 required state or local regulators to establish a system of licensing and control under which the commercial marijuana industry in Alaska would function. The Act did not instruct any public or private organization to establish retail outlets for sale of marijuana in Alaska, nor did it guarantee that any would exist. The ballot measure simply assumed that demand for retail marijuana existed in Alaska, and it allows for a regulated market to operate to meet that demand. The act authorizes the operation of four types of "marijuana establishments "94 in the state: marijuana cultivation facilities,95 marijuana testing facilities,g6 marijuana product "See LRS report to Sen. McGuire (22/28/24) at 2, Table 2. (available at: https: / /www.al askasenate.org /2oi6/fi1 es /5624 / 2763 /2o2o /Leg_Rese arch_Report_o n_M arijua na Legalization.pdf) 91 AS 27.38.900(9): "Marijuana establishment' means a marijuana cultivation facility, a marijuana testing facility, a marijuana product manufacturing facility, or a retail marijuana store. 95 AS 27.38.goo(8); "an entity registered to cultivate, prepare, and package marijuana and to sell marijuana to retail marijuana stores, to marijuana product manufacturing facilities, and to other marijuana cultivation facilities, but not to consumers." 36 Laval Gawrnmentsand Marijuana Regulation: A Resource Guide forthe City of Seward, Alaska manufacturing facilities," and retail marijuana stores g8 Lawful operation of any such establishment is contingent upon a current, valid registration and all persons acting as owner, employee, or agent ofthe establishment must be at least 22 years of age.99 Lawful Activities of Marijuana Establishments Notwithstanding any other provision of law, the following acts, when performed by one of the four types of marijuana establishments with a current, valid registration, or a person 22 years of age or older who is acting in his or her capacity as an owner, employee or agent of a marijuana establishment, are lawful and shall not be an offense under Alaska law or be a basis for seizure or forfeiture of assets under Alaska law:'°° Retail Marijuana Store — (2) Possessing, displaying, storing, or transporting marijuana or marijuana products, except that marijuana and marijuana products may not be displayed in a manner that is visible to the general public from a public right - of -way; (z) Delivering or transferring marijuana or marijuana products to a marijuana testing facility; (3) Receiving marijuana or marijuana products from a marijuana testing facility; (4) Purchasing marijuana from a marijuana cultivation facility; (5) Purchasing marijuana or marijuana products from a marijuana product manufacturing facility; and (6) Delivering, distributing, or selling marijuana or marijuana products to consumers. g6AS 27.38.900(22); "an entity registered to analyze and certify the safety and potency of marijuana." wAS 27.38.900(20); "an entity registered to purchase marijuana; manufacture, prepare, and package marijuana products; and sell marijuana and marijuana products to other marijuana product manufacturing facilities and to retail marijuana stores, but not to consumers." 99AS 27.38.900(23); "an entity registered to purchase marijuana from marijuana cultivation facilities, to purchase marijuana and marijuana products from marijuana product manufacturing facilities, and to sell marijuana and marijuana products to consumers." 99 AS 27.37.o8o(a) -(d) 10°AS 27.38.070(e) provides that it is lawful under Alaska law to lease or otherwise allow property to be use as a marijuana establishment. tas AS 27.38.o70(a)(2)-(6) Local Govemmenuand Marijuana Regulation: A Resource Guide for the city afSeward, Alaska Marijuana Cultivation Facility'°' (1) Cultivating, manufacturing, harvesting, processing, packaging, transporting, displaying, storing, or possessing marijuana; (2) Delivering ortransferring marijuana to a marijuana testing facility; (3) Receiving marijuana from a marijuana testing facility; (4) Delivering, distributing, or selling marijuana to a marijuana cultivation facility, a marijuana product manufacturing facility, or a retail marijuana store; (5) Receiving or purchasing marijuana from a marijuana cultivation facility; and (6) Receiving marijuana seeds or immature marijuana plants from a person 21 years of age or older. Marijuana Product Manufacturing Facility1e3 (1) Packaging, processing, transporting, manufacturing, displaying, or possessing marijuana or marijuana products; (2) Delivering or transferring marijuana or marijuana products to a marijuana testing facility; (3) Receiving marijuana or marijuana products from a marijuana testing facility; (4) Delivering or selling marijuana or marijuana products to a retail marijuana store or a mar Juana product manufacturing facility; (5) Purchasing marijuana from a marijuana cultivation facility; and (6) Purchasing of marijuana or marijuana products from a marijuana product manufacturing facility. Marijuana Testing Facility'°4 (1) Possessing, cultivating, processing, repackaging, storing, transporting, displaying, transferring or delivering marijuana; (2) Receiving marijuana or marijuana products from a marijuana cultivation facility, a marijuana retail store, a marijuana products manufacturer, or a person 21 years of age or older; and (3) Returning marijuana or marijuana products to a marijuana cultivation facility, marijuana retail store, marijuana products manufacturer, or a person 21 years of age or older. —AS 17.38.o7o(b)(1) -(6) "AS 17.38.070(c)(1) -(6) 'a6 AS 17.38.070(d)(1) -(3) Local Governments and Marijuana Regulation: A Resource Guide forthe oty of Seward, Alaske PART FIVE: ALASKA MARIJUANA INDUSTRY REGULATIONS Regulatory Authority Ballot Measure 2 granted the Alaska Legislature the authority to establish a Marijuana Control Board (MCB) to oversee the cultivation, manufacture, and sale of marijuana in the state.1es In the absence of the creation of such a board, the authority for rulemaking and the promulgation of regulations would rest with the Alcoholic Beverage Control (ABC) Board.'°sThe Alaska MCB was established in April 2015' % and thus had nine months from the effective date of the Act (February 24, 2015) to adopt regulations consistent with the parameters set out in Ballot Measure 2. That process was completed on time.. Regulatory Guidance As a preliminary matter, marijuana industry regulations were required to include and comply with the following :ioe • Procedures for the issuance, renewal, suspension, and revocation of a registration to operate a marijuana establishment; • A schedule of application, registration, and renewal fees, provided that application fees shall not exceed $5,000, with this upper limit adjusted annually for inflation, unless the board determines a greater fee is necessary to carry out its responsibilities underthis chapter; • Qualifications for registration that are directly and demonstrably related to the operation of a marijuana establishment; "AS 17.38.080 '°s AS 17.38.080 — See HB 123; http:// www. legis .state.ak.usibasis /get_fulltext .asp ?session =2g &bill= HB123. Board members are appointed by the Governor and confirmed by a majority vote of the legislature in joint session. AS 17.38.o8o(b). Board members afe selected based on the following criteria: (1) one person from the public safety sector, (2) one person from the public health sector; (3) one person currently residing in a rural area; (4) one person actively engaged in the marijuana Industry; and (S) one person who is either from the general public or actively engaged in the marijuana industry. AS 17.38.o8o(b)(1) -(5). Though the initial Board must contain two representatives with experience In the marijuana Industry. See SCS CSHB 123(FIN) Sec. 1o.Gov. Walker appointed the initial five MCB members on July 1, 201S; http: / /www.g ov.state.ak. us/ W a I ker /press- room /full - press -rel ease.htm I ?pr -7224, 'ce AS 17.38.ogo 39 w Loral Govemmentsand Marijuana Regulation: A Resource Guide forth- City of Seward, Alaska • Security requirements for marijuana establishments, including for the transportation of marijuana by marijuana establishments, • Requirements to prevent the sale or diversion of marijuana and marijuana products to persons under the age of 21; • Labeling requirements for marijuana and marijuana products sold or distributed by a marijuana establishment; • Health and safety regulations and standards for the manufacture of marijuana products and the cultivation of marijuana; • Reasonable restrictions on the advertising and display of marijuana and marijuana products; and • Civil penalties for the failure to comply with applicable regulations. Additionally, several procedures for the application process for registration and licensing are included in the statute: • Each application for a registration to operate a marijuana establishment must be submitted to the MCB .'09 • Each renewal application for a registration to operate a marijuana establishment must be submitted to the MCB, and may be submitted up to go days prior to the expiration of the current registration 10 • Upon receipt of an application or renewal application, the MCB will forward a copy of the registration and half of the registration fee to the local regulatory authority where the applicant desires to operate the marijuana establishment (unless the local government has not established such a regulatory authority) "' • The MCB shall issue an annual registration to an applicant within 45-go days of receipt of an application or a renewal application."' Applications maybe denied if the board finds the applicant is not in compliance with regulations enacted 101 AS 17.38.10o(a) 1O AS 17.38.1oo(a) '" AS 17.38.100(c) " AS 17.38.1oa(c). 40 Local Govemmentsand Marijuana Regulation: A Resource Guide forthe City of Seward, Alaska pursuant to AS 17.38.ogo, or if the board is notified by the relevant local government that the applicant is not in compliance with applicable local marijuana ordinances and regulations. � �3 These lists may be expanded, as the MCB maintains broad power over the cultivation, manufacture, and sale of marijuana in the state.. -The MCB also has identified goals which will likely guide and influence its rulemaking: • Keep marijuana away from underage persons; • Protect public health and safety; • Respect privacy and constitutional rights; • Prevent diversion ofmarijuana, and • Degrade illegal markets for marijuana. "s And, though its role in the regulatory process is limited, the legislature can influence and direct regulators through implementing legislation; with the following limitations: (i) the legislature cannot repeal an initiative within two years of the effective date ;i6 (z) legislation "tantamount to repeal" is similarly prohibited; "7 and the Act prohibits rules that make the operation of retail marijuana establishments "unreasonably impracticable. "sse In short, Ballot Measure a did not contemplate a significant direct role for the legislature in crafting the regulatory framework or enforcing the state's retail marijuana laws. Rather, most of the power resides in the MCB and local governments. "3 AS i7.38.ioo(c). "` AS 17.38.o84(a) "'These goals were identified by the ABC Board before the MCB was created. Preliminary Considerations for Implementation of AS 17.38 (Prepared for the Alcoholic Beverage Control Board and Public, Feb. 12,1o15) http: // commerce .state.ak.us /dnn/Portals /g /pub /Preliminary_Considerations_fof implementati onofAS %1017.38.pdf i0 Alaska Const. Art. A, Sec. 6 Warren v. Thomas, S68 P.1d 400 (1977) "• AS 17.38.0go(a); This term is defined In the Act as "Measures necessary to comply with the regulations require such a high investment of risk, money, time, or any other resource or asset that the operation of a marijuana establishment is not worthy of being carried out in practice by a reasonably prudent businessperson." AS 17.38.goo(u4) 41 Local Governments and Marijuana Regulation: ARemo— Guide forth. City ofSeward, Alaska Summary Of Alaska Marijuana Industry Regulations Ballot Measure z, codified in AS 17.38, established the broad framework for regulating marijuana in Alaska. The task of crafting the specific implementing rules was charged to the ABC Board, or an MCB, if the Legislature created one. Legislation creating the MCB passed on the last day of the 1015 legislative session, five members were later appointed to the Board, and the MCB met for the first time on July z, 2015. The Legislature took no other formal action with respect to state marijuana laws during that session, though several marijuana - related bills were introduced. Pursuant to this statutory requirement, the MCB drafted a set of regulations to govern the marijuana industry in Alaska. "g The regulations are comprehensive, covering all aspects of the industry, including cultivating marijuana plants, converting cultivated marijuana into marijuana products (such as edibles and concentrates), safety and quality testing for marijuana and marijuana products, and retail sale. The regulations include extensive requirements for business, including dictating how and when retail stores may operate and advertise, and mandate special training requirements for all marijuana establishment employees. The regulations also assert control over marijuana production, requiring stringent adherence to potency limits, quality standards, safety protocols, inventory tracking, and product packaging and labeling requirements. The regulations provide the MCB with broad investigation and enforcement powers, allowing it to inspect premises and business records as it sees fit. In short, the marijuana industry in Alaska is heavily regulated. The regulations are spread across nine articles: 1. Licensing, Fees (3 AAC 3o6.005 -3 AAC 306-200) z. Local Options (3 AAC 3o6.2oo - 3 AAC 306.26o) 3. Retail Marijuana Stores (3 AAC 3o6.300 - 3 AAC 3o6.36o) 4. Marijuana Cultivation Facilities (3 AAC 3o6.400 - 3 AAC 3o6.480) 5. Marijuana Product Manufacturing Facilities (3 AAC 3o6•Soo - 3 AAC 3o6.57o) 6. Marijuana Testing Facilities (3 AAC 3o6.600 - 3 AAC 306.675) 7. Operating Requirements for All Marjuana Establishments (3 AAC 306.700 - 3 AAC 3o6.755) 8. Enforcement, Civil Penalties (3 AAC 306.800 - 3 AAC 3o6.85o) g. General Provisions (3 AAC 3o6.9o5 - 3 AAC 3o6•ggo) Amongst these articles are several regulations that are of concern to local governments, as municipalities may be involved in numerous aspects of the licensure process and will °'3 AAC Chapter3o6: Regulation of Marijuana Industry. 42 Local Governments and Marijuana Regulation: A Rewurce Guide forthe Oty of Seward, Alaska play an important role in implementing the regulations, enforcing requirements, and monitoring the industry. For example: • Local governments may protest a license application.1O • Local governments may suggest conditions for a new application or renewal (and will have responsibility for monitoring compliance with such adopted conditions).'" • Local governments are expected to notify the Board if marijuana establishments violate any applicable statute or regulation. "' • Marijuana establishments must comply with all applicable health and safety requirements and are subject to inspection by "the local fire department, building inspector, or code enforcement officer to confirm that no health or safety concerns are present ° "3 • Local governments may prohibit outdoor marijuana production.224 Additionally, numerous other proposed regulations, including signage and security requirements, enforcement of age restrictions, security zoning compliance, and public health and safety concerns, appear as if they will require local oversight. The local option regulations are also of significant concern to local governments. These regulations are modeled on the Alaska local option statutes for alcohol establishments. The local option regulations include rules prescribing types of local options, a change of a local option, the removal of a local option, the effect on licenses of a prohibition on sale, the prohibition of importation or purchase after a local option election, the effect on licenses of a restriction on sale, licensing after a prohibition on sale except on premises operated by a municipality, the procedure for local option elections, and notice of results of a local option election. Other regulations of note include: Who canno obtain a license: those who have a previous felony conviction, those who have been found guilty of certain alcohol offenses, including selling alcohol to a minor, have a misdemeanor controlled substances conviction during the past five years, or a specific marijuana- related conviction within the last two years." 3 AAC 306.o1o(c), .o6o(a). 3 AAC 306.o6o(b) 3 AAC 306.o6o(c) :a3 3 AAC 306.735(a)• tli 3 AAC 306.43o(b). "5 3 AAC 3o6.o1o(d) w w Local Governments and Marijuana Regulation: A Resource Gulde forthe City of Seward, Alaska • Zoning restrictions: "The board will not issue a marijuana establishment license if the licensed premises will be located within 500 feet of a child - centered facility including a school, daycare, or other facility providing services to children; a building in which religious services are regularly conducted; or a correctional facility" or "if the licensed premises will be located in a liquor license premises." u6 • Licenses will only be issued to residents of the state, with certain conditions applying to ensure residency when the license is issued to a business entity. "7 • Application fee for new establishment license set at $1,000. The renewal application fee is s600.i8 • Annual license fees set at: fora marijuana retailer license, s5000; for a limited marijuana cultivation facility license, $1000; fora marijuana cultivation facility license, s5000; fora marijuana extract only manufacturing facility license, sl000; for a marijuana product manufacturing facility license, s5000; for a marijuana testing facility license, sl000. "9 • Retail stores will have to comply with requirements for signage, hours of operations, restricting certain areas, and requirements for marijuana handler permits for employees. �3° • Marijuana sales transactions will be limited to the following: one ounce of usable marijuana; seven grams of marijuana - infused extract for inhalation, or marijuana or marijuana products containing no more than 5600 mg of THC. "' "6 AAC 306.oio(a), (b) "7 3 AAC 3o6.02s(b). A "resident of the state" is a person who meets the residency requirement for a permanent fund dividend during the calendar year in which that person applies for a marijuana establishment license. 3 AAC 306.o15(e)(2). fa 3 AAC 3o6.1oo "93 AAC 306.1oo(d) 1J0 3 AAC 3o6.310, .320, .325, •715 3 AAC 306.355 44 Local Governments and Madjuana Regulation: A Resourca Guide for the MY of Seward, Alaska • Marijuana may only be sold to a consumer who is physically prints on the licensed premises; sales over the intemet are not permitted.132 A more detailed summary of the regulations follows, with a focus on items of significance to local government. Licensing and Fees Article 1 provides further detail on the four different license types authorized by statute and required for operation of a marijuana establishment in the State of Alaska (retail marijuana store license, marijuana cultivation facility license, marijuana product manufacturing facility license, and marijuana testing facility license). '33 This section outlines the process for applying for a new license, renewing a license, or transferring a license;'34 establishes the fees applicable for each type of license,X35 describes the role of the public and local governments in the application process;X36 and establishes a process for license seekers to challenge or appeal adverse decisions.'37 Numerous restrictions are placed on the MCB's ability to issue a marijuana establishment license. For example, the MCB will not issue a license if: the licensed premises would be located within Soo feet of school grounds, a recreation or youth center, a building used for religious services, or a correctional facility;'38the licensed premises would be located in a liquor license premises;'39when the location of the licensed premises would conflict with a local zoning ordinance; 4• or when the person seeking the license has a certain criminal history." Marijuana establishment licenses will only be issued to a specific individual, to a partnership, a limited liability company, a corporation or a local govemment.14' No one other than a licensee may have a financial interest in the business for which a license is '3' 3 AAC 306.710(a)(5)• '33 3 AAC 3o6.005 '74 3 AAC 3o6.o2o '353 AAC 3o6.1oo 184 3 AAC 3o6.o6o, o65_070 137 3 AAC 3o6.075, .080., .o8s, .o9o, .095 s38 3 AAC 306.o1o(a) '393 AAC 306.o%o(b) Me 3 AAC 3o6.o1o(c) '4.3 AAC 3o6.olo(d) �4' 3 AAC 306.o15(a) 45 Local Governments and Marijuana Regulation: A Resource Guide for the City of Seward, Alaska issued.'43 Individuals or sole proprietors seeking a license must be residents of the State of Alaska,14 meeting the residency requirement standard applicable for a permanent fund dividend�45 For a partnership, each partner must be a resident of the state.iy6 A limited liability company must be qualified to do business in the state and each member of the company must be a resident'47 For a corporation, the corporation must be qualified to do business in the state or incorporated in Alaskafpe. Applications require extensive information, including a detailed operating plan (including plans for security, inventory tracking, employee qualifications, waste disposal, transportation and delivery of products, signage and advertising) and a criminal history background check (3 AAC 306.055). There is public notice of each application. 3 AAC 3o6.o25. Local governments have the opportunity to protest any marijuana establishment license application (application for a new marijuana establishment license, renewal of a license, or transfer of a license to another person). 3 AAC 306.060. Protests must be filed no later than 6o days after the application notice is posted. 3 AAC 306.o6o(a). A protest is filed by sending the MCB director and applicant a written explanation of the reasons for the protest. Id. If a protest is filed, the MCB will deny the application unless it determines that the protest was arbitrary, capricious, or unreasonable. Id. A local government may also recommend a condition placed upon a marijuana establishment license. Similarly, the condition will be imposed unless it is found to be arbitrary, capricious, or unreasonable.'49If the board imposes a condition recommended by a local govemment, the local government may be responsible for monitoring compliance with the condition. Local Option Article z details the local option rules, whereby a local government may prohibit the sale or importation for sale of marijuana and any marijuana product, and the operation of any marijuana establishment, within its borders. 3 AAC 3o6.2oo(a)(i) -(1). Such a local option may be effectuated by a public majority vote on the question to approve the option, or a local government's assembly or city council may pass an ordinance to the same effect. 3 AAC 306.2oo(a). A ballot question to adopt a local option must follow certain procedures and contain specific language. 3 AAC 3o6.2oo(b); .23o. The regulations also provide instructions for changing or removing a local option, and the ' 3 AAC 306.o15(a) '44 3 AAC 306.o1S(b)(1) Ks 3 AAC 306 =S(e)(1) s46 3 AAC 3o6.oi5(b)(2) 1V7 3 AAC 306.015(b)(3) s48 3 AAC 306.o1S(b)(4) '49 3 AAC 3o6.o1S(b). Local Governments and Marijuana Regulation: A Resource Guide forth e Gty of Seward, Alaska impact of an adopted local option on existing licenses. 3 AAC 3o6.210, .120, .i3o, .z5o. The results of local option elections must be publicly noticed. 3 AAC 306.260. If a local option to prohibit the sale of marijuana or any marijuana product is enacted, a person may not knowingly bring,'se send,'s' or transport's' marijuana or marijuana products for sale into the area within the boundary of that local government, nor may any person who resides within the boundary of that local government purchase marijuana or marijuana products from another person in violation of the local option. 3 AAC 3o6.240(a), (b). However, a licensed marijuana establishment may transport marijuana through the boundaries of a jurisdiction that has banned the purchase and sale of marijuana, provided certain conditions are met. 3 AAC 3o6.240(c). Marijuana Establishments Articles 3 -7 establish rules for all types of marijuana establishments in the State of Alaska, including retail marijuana stores (Article 3), marijuana cultivation facilities (Article 4), marijuana product manufacturing facilities (Article 5), and marijuana testing facilities (Article 6). The regulations also include a section on operating requirements applicable to all marijuana establishments and license types (Article 7). Operating Requirements for All Marijuana Establishments All marijuana establishment licensees, employees, or agents, who sell, cultivate, manufacture, test or transport marijuana or marijuana products, or who check the identification of customers or visitors, must obtain a marijuana handler permit before receiving a license or beginning such employment. 3 AAC 306.70o(a). To obtain a marijuana handler permit, a person must complete an education course and pass a written test administered by the MCB. 3 AAC 306.70o(b). All marijuana establishments must restrict access to the public and employ certain security and surveillance measures. 3 AAC 306.710, .715, .720. Marijuana establishments must carefully track their inventory, maintain records, and may only transport marijuana and marijuana products, or dispose of marijuana waste, according to certain guidelines. 3 AAC 306.730, .740, •750, •755• 1$O "Bring" means to carry or convey or to attempt or solicit to carry or convey. 3 AAC 306.14o(d)(1). "' "Send" means to cause to be taken or distributed or to attempt or solicit or cause to be taken or distributed, and includes these of the United States Postal Service. ""Transport" means to ship by any method, and Includes delivering or transferring or attempting or soliciting to deliver or transfer marijuana or marijuana products to be shipped to, delivered to, or left or held for pickup by any person. 46 47 Local Governments and Marijuana Regulation: A Resource Guide for the City of Seward, Alaska Importantly for local governments, local fire departments, building inspectors, and code enforcement officers are authorized to inspect marijuana establishments to ensure that no health or safety concerns are present. 3 AAC 3o6.735. Retail Marijuana Stores Licensed retail marijuana stores may sell marijuana and marijuana products purchased from licensed marijuana cultivation facilities and product manufacturing facilities for consumption off the licensed premises. 3 AAC 306.305(a)(1) -(2). In limited circumstances, marijuana and marijuana products may be consumed in designated areas on the licensed retail premises. 3 AAC 306.305(a)(4). Prior approval from the MCB will be necessary for such a "marijuana cafe "'53to operate, and local anti - smoking ordinances which apply in public places would remain in effect Alaska will be the first state to allow such limited public marijuana consumption. There are numerous other restrictions on retail marijuana store operations. For instance, marijuana may not be sold to anyone under 21 years of age, or to anyone under the influence of alcohol or any other controlled substance. 3 AAC 306.310(a)(1) -(2). Any marijuana or marijuana product sold must be properly labeled and packaged. 3 AAC 306.310(a)(3)r 345• Marijuana may not be sold in a quantity exceeding the following in a single transaction: one ounce of usable marijuana, seven grams of marijuana concentrate, or marijuana products containing more than 5,600 mg of THC. 3 AAC 3o6355• Retail marijuana stores must be closed to consumers between 5:oo a.m. and 8:oo a.m. each day. Marijuana may only be sold to a consumerwho is physically present on the licensed premises; sales over the Internet are not permitted. 3 AAC 306.710(a)(5). Additionally, no marijuana or marijuana products may be sold until all required laboratory testing of such products is completed. 3 AAC 3o6.340. There are also restrictions on marketing and advertising of marijuana and marijuana products for sale. A retail marijuana store may not offer or deliver samples, or free marijuana or marijuana products, to a consumer as a marketing promotion or for any other purpose, 3 AAC 306.31o(b)(3)(A) -(B), and there are limits on coupons and other promotional activities. 3 AAC 3o6.36o(d). A retail marijuana store may have no more than three signs that identify the store visible to the public, signs must be in a window or attached to the outside of the store, and may not exceed 4,800 square inches. 3 AAC 306.36o(a). Advertisements may not represent therapeutic effects of marijuana, nor may they appeal to children. 3 AAC 3o6.36o(b). Advertisements must contain health warnings. 3 AAC 3o6.36o(e). There are also restrictions on the permissible location of marijuana advertising. Such advertising may not be placed within 1,000 feet of a child- centered 'n http:// www .npr.org /20IS/12/24/46o8439SO /alaskas -pot- cafes - will - give - patrons -a- taste -of- cannabis Local Governments and Marijuana Regulation: A Resource Guide for the city of Seward, Alaska facility (such as a school, childcare facility, recreation center, park, or library); on or in public transit vehicles or public transit shelters; on or in publicly owned property; within i,000 feet of a substance abuse facility, or on a college campus. 3 AAC 3o6.36o(c). Marijuana Cultivation Facilities Except as provided in the personal use marijuana rules contained in AS 17.38.020, or under the Ravin Doctrine or Alaska's medical marijuana law, a person may not "plant, propagate, cultivate, harvest, trim, dry, cure, package, or label marijuana grown at a place under that person's control, or sell marijuana grown at a place under that person's control to any marijuana establishment unless the person has obtained a marijuana cultivation facility license ... or is an employee or agent acting for a licensed marijuana cultivation facility." 3 AAC 3o6.400(a). Marijuana cultivation licenses come in two sizes: "standard," with no listed size restrictions, or "limited," which may have no more than Soo square feet of space under cultivation. 3 AAC 306.400(a)(1) -(2); 3 AAC 3o6.405;.3 AAC 306.41o. With such limited licenses available, individuals may be able to grow commercial marijuana in their homes, depending on local zoning ordinances. All marijuana cultivation facility employees or agents are required to have a marijuana handler permit. 3 AAC 3o6.425. Premises licensed for marijuana cultivation are generally limited to the cultivation of marijuana plants, which will yield bud and flower for sale. However, such facilities may produce marijuana concentrates and extracts if the facility also has a marijuana product manufacturing license and such activity occurs in a secure area separate from any cultivation area. 3 AAC 3o6.450. A marijuana cultivation facility may not sell any marijuana until all required laboratory testing is complete on each harvest batch. 3 AAC 3o6.455• Marijuana cultivation facilities must package and label the marijuana they sell according to specific guidelines. 3 AAC 3o6.47o, .475. 48 49 Local Governments and Marijuana Regulation: A Resource Guide forthe City of Seward, Alaska Marijuana cultivation facilities may be wholly indoors, in a fully enclosed secure greenhouse with rigid walls, a roof and doors, or production of marijuana may occur outdoors, so long as the outdoor facility is enclosed by a physical barrier and public view is obscured by a wall or fence at least six feet high. 3 AAC 3o6.430. Whether the cultivation and production of marijuana occurs indoors or outdoors, marijuana cultivation facilities must ensure that any marijuana at the facility cannot be observed by the public from outside the facility and does to emit an odor detectable to the public outside the facility, except as allowed by a local conditional use permit. 3 AAC 3o6•430(c)(1) -(2). Local governments may prohibit outdoor production. 3 AAC 3o6.43o(b). Marijuana Product Manufacturing Facilities A licensed marijuana product manufacturing facility may purchase marijuana from a cultivation facility or another product manufacturing facility; extract marijuana concentrate (see 3 AAC 3o6.555 for more details); manufacture, refine, process, cook, 'I Photo source: httPs: / /pixabay.com /en /marijuana - colorado- marijuana- grow- a6985i/ So Local Governments and Marijuana Regulation: A Resource Guide forthe City of Seward, Alaska package, label, and store marijuana concentrates or any marijuana product for topical use on the body (such as ointments, salves, patches, or tinctures) and any product intended for consumption (such as edibles). 3 AAC 3o6.5o5(3). Marijuana product manufacturing facilities may sell marijuana products to licensed retail marijuana stores or other licensed product manufacturing facilities. They may also transport marijuana and provide limited samples of their products in furtherance of their licensed activities. 3 AAC 3o6.505. Marijuana product manufacturing facilities may not: sell marijuana or marijuana products directly to a consumer; sell any products that are not manufactured, packaged, and labeled in compliance with state regulations; allow any person to consume marijuana on the licensed premises. 3 AAC 3o6.5io. There are also limits on the types of products that may be produced: marijuana product manufacturing facilities may not t familiar food or drink item; or any product that product "closely "would appeal tochildren-"3leAAC 3o6.510(a)(4); 3 AAC 3o6.sio(b). All products must adhere to strict potency guidelines. A single serving of a marijuana product may not exceed five mg active THC and a single packaged unit of marijuana product to be eaten or swallowed may not exceed ten servings, or 5o mg active THC. 3 AAC 3o6.56o. The THC must be homogenous, or evenly distributed throughout the product. Id. Products must be packaged and labeled as required by the regulations. 3 AAC 306-565,..57o. ES 6dP(os)4sl4sey le:)lpaw ue:)u awy: allj /elpawl #6df•(004sl4se4'leDipaw ueDuawy: apj1!m im16jo•elpawPi!'wsuowwo3/j:sdu4 - suowwo:) elpawi>liM eln WE VS-AS » japun pasua:)l-1 • )pom umo - uossaidfyl Aq ,(01)4s14se4 le:iIpaw ue:)Iiawy.., alpue4 oqm saaAoldwa Allll:)e; 6ul.in:pe ;nuew lonpad euenfuew 'sivaw4sllgelsa euenfuew .121410 Ile of Aldde 11243 suolleln6ai B43 43Im 6ulAldwo� pue 'uol3eD'ulyaD jalpue4 euenfuew ane4 saaAoidwa Ile le4l 6uunsua 'asua:)il a 6ululelgo of uopippe ul ansetv'piamosio ko ay»y aping a nosayy:uonejnSaa euan(peVj pues3uawwanog IM-1 6df•; 1a)ii6e/e/ suowwoa/ eipedhllmi6jo •elpawppm•peoldnj/:sdu4 - suowwo:) elpawislim e1A ulewoa Dllgnd japun pasua31-1 ss. SSS•go£ :)yy E •sallllpe; Aluo- alejluaauoo pallwil pue sallllpe; uollonpad piepuels ilioq of Aldde 4314m amlumoo euenfuew ;o uopnpoid a43 03 algeolidde saullapin6 ogpads aie aJa41 •lonpad Jaglo Aue olul ale .4ua:)uoo euenfuew 3Jam103 lou Aew sallglDe; 4:)nS •STS•goE :)yy E •saslwaid pasua:),y a4l uo aleiluawoD euenfuew ;o uollonpo.id a4l jo; Aluo smope le41 algellene sl asuao!I Pal!w!I avow y •oSS•goE :)VV E •alaldwo:) sl 6ullsa3Aio3ejogel pailnbai lie I!lun siallelai of plos aq Aew spnpad euenfuew ou'Alleuolllppy •p)SzS•goE oyy E •luawAed a;); pue uolle:)lldde alejedas annbai lllm'uoile:)lldde asunq leillul 041 of luanbasgns'shnpoid mau jo; lenaddy •SzS•go£ :)yy E -ales jo; ainloe ;nuew of s)laas Alllne; 6uunloe ;nuew lonpad euenfuew a lonpo.id Pea jo; kiessa3au sl lenoidde 9:)v4 'AlleuollippV SScd31H eHsaJy'p,einas ;a Aso aw,o, aping aa,nosaa y:uopeinSou auenfpew pae swawwanog iewi t- en Loral Governments and Marijuana Regulation: A Resource Guide forth, Oty of Seward, Alaska marijuana at the facility must obtain a state food safety worker card.'n Marijuana product manufacturing facilities must comply with the Alaska Food Safety Code, local kitchen - related health and safety standards for food establishments, and are subject to inspection by local safety officials, including fire departments, building inspectors, and code enforcement officers.'s' Marijuana Testing Facilities Marijuana testing facilities play an important role in Alaska's marijuana regulatory framework. As discussed in previous sections, no marijuana or marijuana products can be sold to retailers or the public until all required testing is completed. Required tests may include potency analysis, moisture content, foreign matter inspection, microbial screening, pesticide, other chemical residue, and metals screening, and residual solvents levels.'sg To ensure objectivity, no licensee of any marijuana testing facility, nor any agent or employee of a testing facility may have an ownership interest in, or any other direct or indirect financial interest in any other licensed marijuana establishment's, Enforcement and Civil Penalties Representatives of the MCB, including the director, enforcement agents, or other w employees, have broad inspection authority over marijuana establishments to ensure oe compliance with all applicable laws and regulations. 3 AAC 306.800. They may enter any marijuana establishment and inspect the licensed premises and access business records, computer files, and the marijuana inventory tracking system. 3 AAC 306.800. This power extends to local governments as "peace officers," defined to include a member of the police force of a municipality, a village public safety officer, a regional public safety officer, and any officer whose duty is to enforce and preserve the public peace, may also inspect licensed marijuana establishment premises and business records at any reasonable time. 3 AAC 306.800; 3 AAC 3o6.900(31). Following an inspection, an inspection report, advisory report, or notice of violation may be issued. 3 AAC 306.805. Such action may lead to suspension or revocation of a marijuana establishment license. 3 AAC 306. 805, .81o, .8i5, .820. In cases where a marijuana establishment poses an immediate threat to the public health, safety, or welfare, a summary suspension of the license, requiring an immediate stop to the offending activity, may be ordered. 3 AAC 3o6.825. In addition, the MCB may impose 's' 3 AAC 306.53o(b). '58 3 AAC 306.545• 'ss 3 AAC 306.645(a) s 6°3 AAC3o6.6o5(d) 54 Local Governments and Marijuana Regulation: A Resource Guide forthe Oty of Seward, Alaska civil fines ranging from $10,000 to $50,00o depending on the number of violations, or up to three times the amount of the monetary gain that resulted from the violation. 55 w Local Governments and Marijuana Regulation: A Resource Guide for Meaty of Seward, Alaska PARTSIX: CIVIL AND CRIMINAL PENALTIES FOR MARIJUANA CULTIVATION, POSSESSION, AND SALE As explained above, Alaska state law generally proscribes all marijuana - related activities, and attached criminal penalties for violations But limited marijuana production, use, possession, and sale is permitted in certain circumstances. When activities fall outside of those narrow conditions, criminal penalties still apply. The applicable penalties depend on a combination of factors, including the purpose of the use /possession, the intent of the user /possessor, the location of the use /possession, the age of the user /possessor, and the amount of marijuana involved. The Alaska Statutes classify the most common marijuana crimes and penalties across a spectrum from violations (punishable by a civil fine) to felonies. Other than exempting certain conduct from criminal penalties, there were no formal criminal punishment provisions contained in Ballot Measure z. Thus, for example, an unregistered marijuana cultivation facility or testing center operating without a license could be charged under the existing criminal statutes prohibiting marijuana possession as well as penalized for violating the civil licensure provisions. During the last legislative session, the Alaska Legislature considered several bills aimed at updating Alaska's statutes to reflect recent changes in state marijuana lawsi6' However, the only marijuana - related bill to pass was the one establishing the MCB; no changes to Alaska's criminal statutes were made. Marijuana Violations • A violation is a noncriminal offense punishable only by a fine.i6' • Public consumption of marijuana is classified as a violation punishable by a fine up to slo0.i63 • A marijuana home grow that does not comply with the statutory requirements (i.e., the grower is under 22; there are more than six plants; more than three mature, flowering plants; the grow is not secure; or is visible to public) is a violation punishable by a fine up to $750.i14 See, e.g. SB3o, HB75. AS 22.82.900(63) i" AS 27.38.040. X46 AS 27.38.03o(b) 56 Local Governments and Marijuana Regulation: A Resource Guide forte City of Seward, Alaska Marijuana Misdemeanors • Misconduct Involving a Controlled Substance in the Sixth Degree (MICS -6). This crime includes: • Use or display of any amount of marijuana. AS z1.71.o6o(a)(i)i61 • Possession of less than one ounce of marijuana. AS 22.72.o6o(a)(2)166 Penalty: Class B Misdemeanor; punishable by up to go days in prison and a $2,000 fine.117 • Misconduct Involving a Controlled Substance in the Fifth Degree (MICS -5). This crime includes: • Manufacture or delivery,' or possession with intent to manufacture or deliver, less than one ounce of marijuana.i69 • Possession of one ounce or more of marijuana'r° • Penalty: Class A Misdemeanor, is punishable by up to one year in prison and a sio,000 fine:'n Marijuana Felonies • Misconduct Involving a Controlled Substance in the Fourth Degree (MICS -4). This crime includes: '65 AS 27.38.o2o(A) renders this section inapplicable to persons over 22 who are in possession of one ounce or less of marijuana. AS 2.7.38.02o(A) renders this section inapplicable to persons over 22 who are in possession of one ounce or less of marijuana. "I AS 22.72.o6o(b); i2.55.135(b); 22.55.035(6)(6)• "' "deliver' or "delivery" means the actual, constructive, or attempted transfer from one person to another of a controlled substance whether or not there is an agency relationship. AS 22.72.900(6). X49 AS 22.72.o5o(a)(2); Under AS 27.38, this would be applicable to amounts greater than one ounce. AS 27.38 also allows adults over 22 to transfer up to one ounce of marijuana to another person without remuneration. "° AS 22.72.o5o(a)(2)(E). Under AS 27.38, this would be applicable to amounts greater than one ounce. "' AS 22.55.235(•); 22.55.035(b)(5); AS 22.72.o5o(b) 57 Local Governments and Marijuana Regulation: A Resource Guide forthe Oty of Seward, Alaska • Manufacture, delivery, or possession with intent to manufacture or deliver, one ounce or more of marijuana.'7' • Possession of four ounces or more of marijuana. AS =-72.040(a)(3)(F) • Possession of any amount of marijuana with reckless disregard that the possession occurs on or within Soo feet of school grounds; or at or within Soo feet of a recreation or youth center; or on a school bus. AS 22.72.040(a)(4)(A)(i)-(ii), -.72.040(a)(4)(B) • Possession of 2S or more marijuana plants. AS 22.72.040(a)(3)(G), (d). • Penalty: Class C Felony, punishable by a prison sentence of up to five years and a s5o,000 fine.'73 • Misconduct Involving a Controlled Substance in the Third Degree (MICS -3). This crime includes: • Delivery of any amount of marijuana to a person under ig years of age who is at least three years younger than the person delivering it X74 • Penalty: Class B Felony, punishable by a prison sentence of up to ten years and a sioo,000 fine.'75 Driving Under The Influence Of Marijuana Alaska law prohibits driving under the influence of a controlled substance. Marijuana is a a Schedule VIA controlled substance, so it is illegal to operate a motor vehicle under the ° influence of marijuana (or a combination of marijuana, any other controlled substance, inhalant, or alcoholic beverage).i76 Driving while under the influence (DUI) is a Class A misdemeanor, with increasing minimum penalties depending on the number of prior convictions,'n or it can be a Class C Felony depending on the number and recentness of prior convictions.i78 "' AS 22.72.040(a)(2). Under AS 27.38, this would be applicable to amounts greater than one ounce. '73 AS 22.72.040; 22.5Sn25(e); 22.55.035(b)(4)• *76 AS 22.71.030(a)(2). "SAS 22.72.03o(C); AS 22.55.225(d); AS 22.55.035(6)(3)• '7' AS 25.35.030(a)(2) "" AS 25.35.03o(b) "a AS 25.35.030(n) Local Governments and Marijuana Regulation: A Resource Guide forthe City of Seward, Alaska Determining if the operator of a motor vehicle is under the influence of marijuana is not as straightforward as determining if a driver is under the influence of alcohol. First, there is no Breathalyzer or other "quick" scientific test for marijuana. Second, residual THC (the psychoactive ingredient in marijuana) can remain in the human body for extended periods of time. Thus, testing for "active" THC is necessary to determine if an individual is currently operating a vehicle under the influence of marijuana. �79Testing for active THC requires a blood test, which cannot be administered in the field, may require a warrant, and is far more invasive, expensive, and time consuming than an oral breathalyzer test for alcohol. Given these constraints, determination of whether a driver is operating a vehicle under the influence of marijuana in Alaska is generally made through the observations of an investigating officer trained in drug recognition. "o THC levels alone may still not provide an accurate determination if a person is driving while impaired. If a blood test is performed, there is significant debate over what mount of active THC in the bloodstream constitutes impairment or even indicates that a person is "high.""' People metabolize THC at different rates and the degree of impairment can vary greatly. Alaska does not currently have a set limit on blood marijuana content to determine when a driver is impaired because of marijuana.iB3 The state takes a zero tolerance approach, criminalizing driving with any amount of controlled substances (including THC) in the bloodstream.i83 Laws, policies, and technologies regarding testing for marijuana intoxication continue to evolve, but it is unclear how this issue will develop in Alaska. Ballot Measure z did not amend Alaska's driving under the influence statute, nor has the Alaska Legislature taken any subsequent action to address marijuana use and driving. Relying on an officer's drug recognition expertise, maintaining a zero tolerance THC limit, or adopting 'm See http:/ /www. npr .org /2024/02/23/280310526/with- support- for - marijuana - concem -over- driving -high- grows; http:/ /www.adn.com /article/20350408 /how -do- alaska- police -test- m arij uan a- drivers - suspected -du i "k'See Blake and Finlaw, Marijuana Legalization in Colorado: Lessons Learned at 375 -76; http:/ /www.a d n.com /a rticle/20150408/ how -do- alaska -pol ice - test -m arij ua na -d dvers- suspected -dui; http:pwww.adn.com/ article /2o25oSo6 /highly - informed - followup- cannabis -dui- and- request - readers. "See Blake and Finlaw at 376; See http: / /www. npr. org / 2024 /05/22/324279722/without -a- m arijua n a -bre ath alyzer- how -to -curb- stoned -d rivin g "'AS 25.35•03o(a)(2) specifies the blood alcohol content (BAC) of o.o8% or more constitutes driving under the influence of alcohol. X63 i.e., any amount of THC renders a driver per se impaired 59 A Local Governments and Marijuana Regulation: A Resource Guide forthe City of Seward, Alaska a protocol with a specific baseline, all raise concerns and have limitations. However, Colorado and Washington, two other states with legalized marijuana, have set the DUI limit for THC In the blood at five nanograms of active THC per milliliter of whole blood. Otherjurisdictions, such as Los Angeles, are testing oral swab technology.'4 At a minimum, it is important for local law enforcement to be adequately trained in drug impairment recognition. Local Governments and Marijuana Regulation: A Resource Guide for the my of Seward, Alaska PARTSEVEN: LOCALREGULATION The federal government has not repealed its marijuana prohibition, but it has supported a grant of significant control over marijuana regulation to the states. Over twenty states have legalized some form of marijuana use and the number is likely to keep growing. As a result, states are left to determine the amount of power, if any, they should give to local governments to regulate marijuana.'lls Regulation of the commercial marijuana industry in Alaska will involve a mix of state and local oversight. The statutes enacted by Ballot Measure 2 contemplate the creation of a strong regulatory framework established by a state agency with local governments tasked with implementing the regulations. In the event that the state agency, in this case the MCB, failed to adopt regulations pursuant to AS 17.38.o9o, or did not timely accept or process registration applications pursuant to AS 27.38.100, there was a mechanism for local governments to establish a local regulatory agency and fill that role.' Otherwise, local governments may enact ordinances governing the time, place, manner, and number of marijuana establishment operations within its jurisdiction; 287 and may establish and enforce civil penalties for violation of such time, place, manner, and number ordinances.' Local governments who have established local regulatory authorities will receive a copy of all registration or renewal applications and one -half of the application fee for all applicants seeking to open a marijuana establishment in their jurisdiction."' Local governments are also expected to communicate with the MCB and notify the MCB if an applicant is not in compliance with any applicable local ordinances and regulations concerning marijuana establishments in effect at the time of application.'g° Such notification must occur prior to the MCB's registration decision. ""See Mikos, Marijuana Localism, 65 Case Western L Rev 719 (2015). '" AS 17.38.11o(c). Additional details regarding the procedures that must be followed by local governments and local regulatory authorities if the MCB does not timely adopt regulations or process applications can be found in AS 17.38.110(d) -(k). "AS 17.38.11o(b) 'W AS 17.38.11o(b) "I AS 17.38.100(c) '& http://www•npr.org/2014/02/23/280320526/ with - support- for - marijuana - concem -over- driving -high -grows 's° AS 17.38.1oo(d) Local Govemmems and Marijuana Regulation: A Resource Guide for the Oty of seward, Alaska Opt -Out Provisions AS 17.38.1100) provides the option for local government to prohibit the operation of marijuana cultivation facilities, marijuana product manufacturing facilities, marijuana testing facilities, or retail marijuana stores through the enactment of an ordinance or by a voter initiative. Communities can therefore opt out of allowing the manufacture and sale of marijuana within their jurisdictions, but cannot ban marijuana entirely. AS 17.38.020 states that personal use, possession, cultivation, and transfer of marijuana remains lawful in all political subdivisions in the state, and local governments also remain bound by the Alaska Supreme Court's ruling in Ravin v. State of Alaska regarding individual constitutional privacy rights and marijuana use and possession. Opt -out provisions are discussed in more detail in a previous section. Local Civil and Criminal Penalties Political subdivisions in Alaska have different levels of authority to maintain self- government depending on how they are organized among various classes of cities and boroughs. Alaska state criminal laws apply in political subdivisions, and local governments adopt and incorporate provisions of the Alaska Criminal Code, including the Alaska Controlled Substances Act, into their ordinances. �9' Local ordinances pertaining to marijuana use, possession, cultivation and sale, as well as possession of marijuana accessories, must be interpreted and applied in a manner consistent with changes to state law legalizing certain types of marijuana activities. Currently, the City of Seward ( "City ") prohibits the possession and use of "narcotic [s] " �9'and "dangerous drugs. " �9'The City also prohibits the sale of "items designed or marketed for use with controlled substances," which has a broad definitionX94 that covers most items used in the cultivation and consumption of marijuana, without a license.X95 However, the code does provide that is a defense to any "'See, e.g., Arch. Mun. Ord. o8.35.oio(a): The Controlled Substances Act set forth in the Alaska Statutes 11.71 is hereby adopted by reference and incorporated in this code, pursuant to Charter section 10.04. Specific provisions for municipal enforcement are listed In this section. No person shall violate any provision of this section or any applicable law of the Controlled Substances Act as may be hereinafter amended by the State of Alaska, nor any rule or regulation adopted by any authorized agency of the State of Alaska pursuant to the Controlled Substances Act. Seward City Code Sec. 20-30-010 Seward City Code Sec. 20.30.020 1° Seward City Code Sec. 20-30.020(2) 62 Local Governments and Marijuana Regulation: A Resource Guide for the ❑ty of Seward, Alaska charge of unlawful possession of narcotics or dangerous drugs to show that the individual charged is "licensed by the United States or the state to buy, sell, prescribe and administer" such narcotic or dangerous drug.ig6 Thus this section may not apply to lawfully registered marijuana establishments. X9' Seward City Code Sec. 20. 30.025 '96 Seward City Code Sec.10.30.o1o(c) and 10.30.020(d) Local Governments and Marijuana Regulation: A Resource Guide forthe city of Semrd,Alaska PART EIGHT: REVENUE - GENERATING ASPECTS OF REGULATION Marijuana and Revenue - Generating Opportunities Many communities have used the marijuana industry to generate revenue. Typically, revenue generation is by both license fees and taxation. However, it is through excise and sales taxes that communities are seeing the largest financial impad.'gr Alaska Statute 29.35.010(6) grants municipalities "general powers, subject to other provisions of law ... to levy a tax or special assessment, and impose a lien for its enforcement" The Alaska Constitution requires that a "liberal construction shall be given to the powers of local government units. "'98 As a home rule city, Seward has the authority to "exercise all legislative powers not prohibited by law. "'s' Municipal Sales and Use Tax Alaska Statute 29.45.65o -7io authorizes the levy of sales and use taxes at the municipal level. The statutes give broad authority to municipalities to levy taxes on sales, rents and services provided within the municipality. Currently, the general sales tax for the City is 4% and the rate of sales tax for the Kenai Peninsula Borough ('Borough ") is 3 %, for a combined rate of 7 %. This general sales tax should apply to the sale of marijuana and marijuana products within the City. —The City also imposes a 4% bed tax. Thus, the City may be able to impose an additional tax on marijuana products and marijuana sales. Excise Tax An excise tax is a tax on the performance of an act. An excise tax resembles an import or manufacturing tax. Due to the nature of the excise tax, it is not subject to voter ratification. 'a' According to the Colorado Department of Revenue, Colorado counties have cumulatively generated $3,849,973 in sales tax on retail marijuana sales during May 2015. Colorado's retail marijuana sales tax is 2.9%; Retail marijuana has an additional io %sales tax, which represents 85% of total 10% retail marijuana tax that is retained by the State. See http s: /lwww.colorado.gov /pacific /site s /default /fileslo c1 s %2OM a ri l uana %2oSa ieSn /`2oTaxalo2o b Y 9 uLItY°/a32RSP9ttpd "' Liberati v. Bristol Bay Borough, 584 P.2d 1115,1120 (Alaska 1978). '" Seward City Charter Sec. 1.4 " a" Seward City Code Sec. 5.35.035(a)• Local Gavemmentsand Marijuana Regulation: A Resource Guide forthe City of Seward, Alaska The City may be able to establish an excise tax. As stated above, AS 29.35.010(6) provides: "All municipalities have the following general powers, subject to other provisions of law ... to levy a tax or special assessment, and impose a lien for its enforcement" The Alaska Supreme Court is reluctant to impose limitations on the taxing authority of municipalities where none are expressed. The fad that only property taxes and sales taxes are mentioned in AS 29.45 is not likely to be construed as a prohibition on taxes that are not mentioned. Currently, other municipalities, such as the Kodiak Island Borough, impose a severance tax on certain' extraction and cultivation activities, which is a type of excise tax. Thus, it is possible to expand the scope of taxes applicable to the marijuana industry. The cost of independently pursing an excise tax will need to be explored more thoroughly to determine whether the benefits outweigh the costs. If the City is interested in imposing an excise tax, it may wish to approach the Borough regarding consolidating collection efforts to offset administrative costs. Additionally, the State will impose an excise tax on the sale or transfer of marijuana from a marijuana cultivation facility to a retail marijuana store or marijuana product manufacturing facility. This should not preclude the City from imposing its own excise tax, however, as there is no general prohibition against like municipal and state taxes. License and Application Fees Alaska Statute 17.38.100 mandates that individuals must register with the MCB to operate a marijuana establishment. The MCB began accepting registration applications on February 24, 2016. Upon receiving an application, the MCB must immediately forward a copy of each application and half of the registration application fee to the local regulatory authority for the local government in which the applicant wishes to operate a marijuana establishment. The application fee for a new marijuana establishment license is currently set at $1,000.2a'The application fee to renew a marijuana establishment license is currently set at $600.'a' The annual state license fees are currently set at: • for a marijuana retailer license, SS000; • for a limited marijuana cultivation facility license, $1000; • for a marijuana cultivation facility license, s5000i • for a marijuana extract only manufacturing facility license, $1000; 'a' 3 AAC 306.1oo(a). 'a' 3 AAC 306.1oo(b) 64 65 Local Governments and Madjuana Regulation: A Resource Guide fcrthe City of Seward, Alaska • for a marijuana product manufacturing facility license, s5000; • for a marijuana testing facility license, si000.'a' The state fee for a marijuana handler permit card is currently $50.114 License fees are not automatically shared with local governments, but the application fees will generate a steady stream of revenue on an annual basis for local municipalities. Other Sources of Revenue There are other potential revenue sources through the regulation of marijuana. The new law provides for the cultivation, testing, processing, packaging, transporting and sale of marijuana. The City will regulate many, if not all, of these aspects of marijuana becoming legalized. The City will likely be able to collect fees for building design and inspection, business registration issuance, suspension and /or revocation, as well as other various fees associated with starting and operating a business. These options will need to be explored more fully once the pending marijuana legislation is passed. Municipalities will also want to consider embracing the fast growing marijuana tourism industry. In Colorado and Washington, small businesses are connecting travelers with marijuana shopping expeditions, visits to growers, lodging in marijuana - friendly hotels, and other opportunities to consume marijuana.'as Recreational Marijuana became legal a in Colorado and Washington in 2014. Hotels.com found that Denver hotel searches went up 73% compared to the year before, for the Marijuana festival weekend of April 2014, the first to be held following legalization of marijuana sales.zo6 Other entrepreneurs are creating cannabis cooking classes, spa treatments and pot- smoking airport layovers.'•rMunicipalities should be prepared to work with small business owners given the success ofthe marijuana tourism industry.'oa '°] 3 AAC 306.1oo(d)(1) -(6 2% 3 AAC 306.1oo(e). 'as Boom Your'Bud And Breakfast', Marijuana Tourism is Growing In Colorado and Washington, http; /jvn�tnv�forbes. om sitglJulieweedlzolcloalzz�ok your -bud • and•breakfast- mari)uana- tourism- is- growin0- in- colorado- and- washingtonl '°s Id. Id. Alaska as destination.for cannabis tourists depends on regs, hip ;(j-vsv_a_askeJourgg(.com[?oi5 io -za yka- destinaticin 4annabis -Lour -dgp, nG ds -reo� Local Governments and Madjuana Regulation: A Resource Guide for the City of Seward, Alaska PART NINE: ZONING, LAND USE, AND THE ENVIRONMENT While state entities may struggle with the scope of marijuana - related activities permitted under State of Alaska law, municipalities will remain responsible for regulating the location and operation of the marijuana dispensaries and grow facilities within their boundaries. Much like the introduction of any new industry in a municipality, municipal governments will need to develop deliberate and transparent processes for adopting and revising zoning laws, land use practices, and even comprehensive community planning to address the introduction of the marijuana industry. Understanding Land Use Regulations Adopted by the State of Alaska Although first and second class boroughs are obligated to provide for planning, platting, and land use regulation on an area wide basis, the MCB has proposed regulations that impose minimum zoning and land use regulations. Thus, these regulations must be taken into account when drafting municipal land use ordinances. Primarily, the State regulations involve the implementation of buffer zones. Currently, 3 AAC 3o6.oio requires a Soo -foot buffer zone between a licensed marijuana establishment and a child - centered facility (including schools, daycare, or any other facility providing services to children), a building in which religious services are regularly conducted, or a correctional facility. The regulations also prohibit the MCB from issuing a marijuana establishment license if the premises are located in a liquor license premises. The regulation also prohibits the MCB from issuing a marijuana establishment license when a municipality protests the application under 3 AAC 306.060 on the grounds that the applicant's proposed licensed premises are located in a place . within the municipality where a local zoning ordinance prohibits marijuana establishments, unless the municipality has approved a variance of the local ordinance. Consequently, municipalities should consider whether they wish to have additional minimum buffer distance requirements for the separation of certain uses from licensed marijuana producers, processors, or retailers. As discussed below, marijuana cultivation operations generate a great deal of odor that many people find offensive. While there are preventative measures that operators can take, an odor may still persist. Municipalities will need to take this into consideration when determining the location of these types of facilities as the odor may impact the surrounding businesses or create a nuisance for those living and working nearby. 66 67 Local Govemmentsand Marijuana Regulation: A Resource Guide fbMe city of Seward, Alaska Environmental Impacts of Marijuana Industry on Land Use Regulation As is the case with any industry, all branches of the marijuana industry will have an impact on the community in which the industry operates. This resource guide attempts to provide introduction to each of the potential impacts, including but not limited to the social, legal, and environmental impacts as each of these impacts should be considered when devising land use regulations. While the social and legal issues surrounding the industry have been discussed throughout this resource guide, environmental considerations may have the largest impact on local land use regulations, including but not limited to controlling odor emissions, ensuring proper ventilation, and responsible water and energy usage. Odor Emissions and Commercial Grow Operations Marijuana can emit a very strong odor that many people find offensive. The odor can migrate in and around a cultivation facility. Some marijuana strains can generate such a strong odor that its detectable by a commercial grow operation's surrounding neighborhoods. Municipalities will need to consider modifying their building codes to require air filtration systems to greatly reduce the impact of the odor. Requiring filters, especially in cultivation rooms, can be an effective way to cut down citizen complaints about marijuana odor. The City of Denver, Colorado issued guidelines for Best Management Practices for cultivation facilities to control the odor and promotes the use of Activated Carbon Filters, Negative Ion Generation technology, and Ozone Generators. These technologies filter, trap or breakdown the odor causing agents associated with growing and processing marijuana. Municipalities should require grow facilities to employ a similar type offiltration system to reduce the marijuana odor and citizen complaints. Ventilation Municipalities may also want to amend their building codes to require proper ventilation In indoor marijuana grow facilities. Indoor growers are experiencing serious issues with mold due to the amount of humidity that is created through the growing process. Mold, of course, poses serious health concerns for the people living and working in the facility. Mold can also compromise a building's structural integrity as it can cause rotting and decomposition of any wood used in the building's construction. Some grow operations, depending on their heating system and the type and amount of fuel they use, may require an air quality permit. Local Governments end Marijuana Regulation: A Resou" Guide for the City of Seward, Alaska Waste Disposal In addition to these primary environmental concerns, there are numerous other peripheral environmental considerations municipalities may need to consider. For example, many growers use chemicals during the marijuana cultivation process. This can contaminate the water supply if not treated and disposed of properly. This type of contamination can also cause issues for the wastewater treatment systems that are charged with filtering a city's drinking water. The result can be an increase in the costs of treatment or possibly impacting downstream ecologies. Legalization states have already implemented licensing rules that require marijuana stems and organic waste from growing and processing operations to be rendered unusable by mixing them with 50 percent other materials and grinding them up before disposal or composting. The current regulations contain a provision discussing waste storage, management, and removal. Specifically, 3 AAC 3o6.74o requires that litter, waste, and rubbish be properly removed. The regulation also requires that waste disposal equipment be maintained to avoid contaminating any area where marijuana or marijuana products are stored, displayed or sold, as well as to prevent odor and avoid attracting pests. Additionally, dangerous waste regulations will need to be followed if grow facilities and dispensaries generate hazardous waste. Water and Light Marijuana cultivation requires a great deal of water and light. According to a study published in zoiz, a typical indoor marijuana grow room has the same power density - about ioo watts per square foot- as a data center. Pot growers use about a third of the electricity used by all the data centers in the U.S. In California, marijuana production accounts for about 3% of electricity used. This is because growing marijuana requires the use of heaters, carbon dioxide and ozone generators, carbon filters, dehumidifiers, fans, and high intensity lights. Municipalities should consider energy efficiency rebates for growers who use efficient lighting systems. Another option is requiring marijuana growers to use renewable energy for a portion of their operation. While this may increase the growers' costs, it will help take pressure off the electrical grid and the growers can recoup the cost through the rebate program ?°s I" http: / /www.adn.com /article /zoi5izz5 /pot - growing - expands - power- demands - tax -us -grids 6B 69 A a Local Govemmentsand Marijuana Regulation: A Resource Guide forthe City of Seward, Alaska PARTTEN: PRESENT AND FUTURE REGULATORY CHALLENGES There are numerous challenges associated with creating, implementing, and monitoring a regulatory framework for a marijuana industry, as well as documented risks which can be mitigated through a comprehensive legalization plan. Some of the risks and challenges posed by mar Juana legalization have been discussed elsewhere in this resource guide. Chiefly, federal marijuana prohibition still exists, leading to much uncertainty about the future of legalization and the possibility of criminal charges against those involved in the industry. Risk of diversion of legal marijuana back into the black market is a concern, especially as it relates to compliance with the guidelines set out in the Cole Memo. Federal prohibition also continues to affect the day -to -day business operations of licensed marijuana businesses, including lack of access to banking services, lines of credit, and high tax rates. Effective DUI enforcement remains a pressing public safety concern as does the possibility of increased marijuana use by youth. Included in this section are several examples of issues that have presented in the course of implementing marijuana legalization plans in other states, and should be of concern to Alaska policymakers and regulators. Before discussing those issues, it is important to note that it is too early to conclude whether the policy of legalizing marijuana in Colorado and Washington has been successful, nor is it clear how exactly to measure "success" in this context. But numerous commentators have discussed the success of these states' initial implementation of their marijuana legalization plans. Regarding Colorado in particular, the Brookings Institute notes: "Colorado's strong rollout is attributable to a number of elements. Those include: leadership by state officials; a cooperative, inclusive approach centering on task forces and working groups; substantial efforts to improve administrative communication; adaptive regulation that embraces regulatory look -back and process- oriented learning; reorganizing, rebuilding, and re- staffing critical state regulatory institutions; and changes in culture in state and local government, among interest groups, and among the public. " "° Implementing a marijuana legalization law involves "design, construction, and execution of institutions, rules, and processes related to a system of legalized marijuana ."— According to Brookings, "Success occurs when those institutions, rules, — See Hudak, Colorado's Rollout of Legal Marijuana Is Succeeding: A Report on the State's Implementation of Legalization at z (available at http: / /www.brookings. edu/- /media /re search /file s /papers /zolq /o7 /cOlora d o -marij uana- I egal izatio n- succeed i ng /cepm mjcovz. pdf) "' Id. at q. 70 Local Governments and Madluana Regulation: A Resource Guide forthe city of5eward, Alaska and processes produce a system consistent with the goals of that polity." This raises the biggest current challenge for Alaska: the regulations that will govern the state's marijuana industry have not yet been finalized. Thus, it is unclear how many marijuana establishment licenses will be issued, where the establishments will be located, and what issues may arise. To meet this challenge, state and local lawmakers must look to the experiences in these other states and make an effortto emulate their best practices, while adapting them to the unique requirements of governing in Alaska. This will involve not just formal legal and regulatory actions, but also informal efforts such as strong leadership, public outreach and education, and coordinated community communication. It is also important to note that data gleaned from the experiences in Colorado and Washington is limited — regulated sales of recreational marijuana have only been occurring in those states since 2014. Thus this is a small sample size, but the information is instructive. Additionally, both Colorado and Washington (and now Oregon as well) had some previous experience with retail marijuana sales, as those states' recreational marijuana industries followed years of permitting commercial sale of medical marijuana. Home Grow Operations Ballot Measure z and the Ravin Doctrine provide individuals with the ability to cultivate marijuana in their homes for non - commercial purposes (known as "home grows "). Restrictions on the size of home grows are provided in state statute, but monitoring home grows is difficult, as they will exist absent the registration and reporting requirements applicable to commercial marijuana establishments. There are several risks inherent in home grow practices. First, there is risk that home growers will grow more marijuana than they are permitted to. This removes customers, revenue, and taxes from the retail market, and presents an opportunity to divert marijuana back to the black market, which risks federal intervention. Second, home grows present problems relating to product safety and quality assurance. Home grows also raise more localized concerns, including environmental hazards and increased crime. A final, specific issue raised by home grows involves butane hash oil extraction. As explained in a previous section, this process involves using a solvent to extract THC- or CBD -rich oils from marijuana. The extract is then used for dabbing, vaping, or cooked into edibles. Butane is a popular solvent used in home extraction processes, but it is highly flammable and has led to at least one reported explosion in Alaska. "' "' See http : / /www.newsminer.com/newsllocal news/hash -oil- cited -in- north - pole- explosion- th at -d am aged - home /a rticle_88f8%9Se- Boos -aleq- 8979- 73bgobe67d yf. htm I 71 Local Governments and Marijuana Regulation: A Resource Guide for the City of Seward, Alaska Edible Marijuana Edible marijuana has proven to be a challenging aspect of legalization for state regulators. In Colorado, for example regulators did not anticipate that such a high demand for edible marijuana products would exist. Colorado now estimates that edible marijuana products accounted for nearly 45% of the legal marijuana market in 2014 (this includes food, drinks, and pills). �3 Challenges and concerns with regulating edible marijuana products exist on several fronts. First, It is difficult to identify and monitor public use of edibles because the products themselves may not offer any notice that they contain marijuana. Unlike burning marijuana to smoke it, dabbing, or vaping, once an edible marijuana product has been removed from its packaging, (or in the case of homemade edibles, where there is no packaging), it may appear indistinguishable from any other edible product. Second, serving sizes for edible marijuana may not be clear and intuitive. Because product dosing and standard serving sizes for marijuana edibles is much different than standard food, relying on individuals to appropriately self - regulate their intake may be problematic. One oft - mentioned example is the marijuana brownie that contains six 'uwww.cdc.gov/mmwr/preview/ mmwrhtml /mm6428a6.htm ?s_cid= mm6428a6_e 72 Local Governments and Marijuana Regulation: A Resource Guide forthe City of Seward, Alaska servings. This requires users to divide the product into sixths, or bite off a small chunk to consume an appropriate amount. Additionally, the effects of edible marijuana may not be felt for 30 -6o minutes after the product is ingested, as opposed to the immediate effects often felt after smoking marijuana. " Thus, new users may over - consume in order to achieve the "high" feeling they are seeking. Further education and research is needed to address these issues, though research has been limited because of the federal prohibition on marijuana. Overconsumption can lead to negative health consequences, including extreme fatigue, upset stomach, and potentially negative psychoactive effects. One case has identified marijuana intoxication from edibles as a contributing factor in a teenager's death. "s Inconsistent potency is another issue with regulating edibles. Colorado has reported numerous examples of edible marijuana products containing significantly more or less THC than was indicated on package labeling. Such errors and inaccurate labeling can also lead to overconsumption, even though users may follow directions carefully. Marijuana edibles have also taken numerous forms (such as candies, chocolates, brownies, and cereals) which appeal to children or may be accidentally ingested by children. Colorado has begun to address these issues by appointing a dedicated state working group to this topic and passed legislation requiring the creation of rules to address specific concerns about edibles, such as establishing equivalency standards between marijuana flower and edible marijuana and expanding potency testing. Defining Public v. Private Use, Marijuana Cafes and Social Clubs To date, marijuana legalization laws have not included opportunities to use marijuana outside of private settings. Regulations that do not permit marijuana to be consumed in public or where it is sold, and clean -air statutes and ordinances which ban tobacco and marijuana smoke, combine to limit the places where marijuana can be consumed. The same was true in Alaska. As the MCB drafted Alaska's marijuana industry regulations, it was expected that marijuana use would remain permitted only in non- public areas. This raised issues for individuals who wished to use marijuana in social settings and for businesses who sought to accommodate those users. This matter recently came to a head, with the state issuing cease - and - desist letters to marijuana social clubs— "public locations run for the exclusive purpose of providing a controlled environment in which "' htto /Mn+n+ thedallybeast corn farticles /2oia /o6laalsmoke -vs- snack -why- edible- mariluana- i s • stronger - than -sm okin0.html "s www.cdc.gov /mmwr/ preview/ mmwrhtmi /mm642ga6.htm ?s_cid= mm6428a6_e A DD Local Governments and Marijuana Regulation: A Resource Guide for the City of Seward, Alaska to consume marijuana and socialize with like- minded consumers.""' At such establishments, people pay a membership fee to access a space where they can bring their own marijuana to smoke and share with others, and some clubs have additional free marijuana available. "' The state argued that these clubs violate the state law that prohibits consuming marijuana in public, which "includes a business to which the public or a substantial portion of the public has access. "i8 The state also likens the situation to alcohol "bottle clubs," which are also prohibited by state statute. Lack of places to consume marijuana is a concern for some residents of Alaska, but it could be especially difficult for tourists. Other than a private residence or a hotel (of which the number of rooms which allow smoking of any sort may be restricted, assuming there are marijuana - friendly hotels), the options for non - residents to consume marijuana are limited. If people who are visiting Alaska can legally purchase marijuana, they believe accommodations should be made so that there is a place for them to safely consume it. Part of this debate has been resolved. Under the regulations, licensed retail marijuana establishments in Alaska can seek approval from the MCB to permit consumption of marijuana or a marijuana product purchased on the licensed premises in a designated area on the licensed premises. "g In other words, this opens the door for marijuana retailers to establish "marijuana cafes," where individuals can buy and consume marijuana. Alaska would be the first state to have such cafes. — Several complications still exist on this front, even with the ability of the MCB to grant on -site consumption licenses. First, local governments may object to such licenses, which could impede the operation of marijuana cafes in certain jurisdictions. Second, some municipalities ban smoking in general, and marijuana smoking in particular, by ordinance. "' In those jurisdictions, the form of marijuana that could be consumed on- site would be limited; additional guidance may be needed to distinguish between burning and smoking marijuana, vaping, and eating an edible product. Fourth, the current regulations do not contain a license type for stand -alone marijuana social clubs, which would not necessarily sell marijuana or have a retail license. Such clubs continue to occupy a wide "gray space" between private residences, where marijuana use is legal, i6 Mikos at 374• "' http: /Iwww.adn.com /article /20150702 /state- takes - aim - marijuana- social -clubs "e Id. "93 AAC 3o6.305(a)(4) httD: llwww. npr. org12o2s l221z4146p843gso /alaskas -pot- cafes - will - give - patrons -a- taste -of- cannabis "'hP ILwtiJscom sL^.0.d41 §�fQ�SS�SS3 W Sh ��7Sh.S ?94on Lr4RxL�� law. s Z63j 74 Local Governments and Marijuana Regulation: A Resource Guide for the city of Seward, Alaska and public facilities like restaurants and bars, where it is not. "' The legal question this may ultimately turn on is whether a public facility that charges a membership or initiation fee or monthly dues creates a space private enough to allow marijuana use on the premises. Finally, on -site consumption raises several policy and local governance questions, including zoning, public health, nuisance complaints, and increased risk of DUI .123 Employment and Drug Testing Despite the legal status of marijuana under state law, public and private employees and employers must be aware of how marijuana use can affect their job status. This is particularly important in safety - focused Industries like oil and gas, seafood processing, transportation and health care, where many workers have the potential to be drug tested. Additionally, as discussed in the DUI section of this resource guide, testing for marijuana use can reveal use that occurred previously, during non -work hours. The Colorado Supreme Court recently ruled that businesses can fire employees who use marijuana during their off - time.. �4 In that case, an employee of Dish Network became quadriplegic in a car accident and used marijuana to control leg spasms. His marijuana use was lawful under Colorado's medical marijuana law. In zoio, he was fired from his job as a customer service representative after failing a random drug test Dish Network has a zero tolerance drug polity. The employee sued, claiming wrongful termination. A trial court dismissed the suit, finding that the state's medical marijuana law did not make the use of marijuana a "lawful activity" that is protected against employment discrimination. The Colorado Court of Appeals affirmed, finding the termination was lawful because marijuana is prohibited by federal law. The Colorado Supreme Court upheld these decisions, holding that the federal prohibition on marijuana makes the drug unlawful despite Colorado's approval of its use for medicinal purposes. That ruling Is not binding on Alaska courts, but it could guide the Alaska Supreme Court if faced with a similar question. "' Mikos at 374 "3 Id. "I See Coats v. Dish Network (available at: https:/ /www.courts.state.co.usluserfiles /file /court_probation /supreme court/opinions /zoi3/3.3S c394•pdf) 75 Local Governments and Marijuana Regulation: A Resource Guide lathe qty of Seward, Alaska Security It is anticipated that marijuana establishments will remain a mostly cash -only enterprise for some time. In general, cash- dependent businesses face numerous security risks, including increased likelihood of internal and external theft. Regulations that mandate stringent security protocols, such as extensive video surveillance, can reduce the incentive for illegal activity by increasing the likelihood of detection. The potential for off - premises crimes committed against employees who are paid in cash must also be considered. These security risks correspond with a growth in business opportunities for marijuana security specialists, ranging from consulting on facilities design to designing security protocols, to performing security operations. 76 . �._ �...... -. ._ ..+- -..... - ... --...- ._.t,•— - ,—. s`"�+�.•. tee-- tom: ---- _ , .. R a` A�step. by step :introduction toy facility, hcerisin� an Ataska •i. i Y t f �Ho1y C: Wells m x. •d Aav es Birch HortonB;ttn'er & Cherof -..Y. , �yw a Nt iufactuYmg + t ��^�` 'bat �; # '' r' !� � `� t c +i,1 +. °•sy {'�;..� 1 dry, �T nE`li. L k•• Y� 5 3~.k� .� A w F W ra. i ry, Cultivation .iycF�en�e .all °civvs a erso:ox. - p. 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"., w .�.is +•� ^� "LEGAL- NESS" OF MARIJUANA UNDER ALASKA STATE LAW BEFORE BM2 AFTER BM2 ACTIVITY Public Consumption Illegal Illegal - Penalty: a Misdemeanor - Penalty: Noncriminal violation; Max $100 fine DUI - Marijuana Illegal Illegal (no change) Simple Possession — Marijuana (Non - Plant) Up to 1 ounce Illegal Legal - Penalty: a Misdemeanor - Adults over 21 only *Adults over 18 may possess *The provisions of Ravin v. up to four ounces of State and the Alaska Medical marijuana in the privacy of the Marijuana Law remain in home for personal use under effect. Ravin v. State * *The Alaska Medical Marijuana Law permits possession of up to one ounce of marijuana for registered users. 1 AS 11.71.060(a)(1) 2 AS 17.38.040 3 AS 28.35.030 4 AS 11.71.060(a)(2) 5 AS 17.38.020(a) F:\505786\81\00469706.DOCX 68 More than 1 ounce Illegal TIllegal y: A Mi sdemeanor - Penalty: A Misdemeanor *Adults over 18 may possess *Adults over 21 may possess all up to four ounces of of the marijuana produced by marijuana in the privacy of the lawfully- possessed marijuana home for personal use under plants on the premises where Ravin v. State. the plants were grown. * *Adults over 18 may possess up to four ounces of marijuana in the privacy of the home for personal use under Ravin v. State. More than 4 ounces Illegal Illegal - Penalty: C Felony - Penalty: C Felony *Adults over 21 may possess all of the marijuana produced by lawfully- possessed marijuana plants on the premises where the plants were grown. Simple Possession — Marijuana Plants Up to six plants Illegal Legal *The Alaska Medical -Only three plants may be Marijuana Law permits flowering at any time registered users to possess up to six marijuana plants (three -The provisions of Ravin v. State of which may be flowering). and the Alaska Medical Marijuana Law remain in * *Adults over 18 may possess effect. up to four ounces of marijuana (whether in plant or otherform) in the privacy of the home for personal use under Ravin v. State. 25 or more plants Illegal Illegal (no change) - Penalty: C Felony - Penalty: C Felon 6 AS 11.71.050(a)(2)(E) AS 11.71.050(a)(2)(E) 8 AS 11.71.040(a)(3)(F) 9 AS 11.71.040(a)(3)(G),(d) F:\505786\81\00469706.DOCX 69 1O AS 11.71.050(a)(1) 11 AS 11.71.040(a)(2) 12 AS 17.38.030(b) F:\505786\81\00469706.DOCX 70 Manufacture, Delivery, Possession with Intent to Manufacture or Deliver [Excluding marijuana establishments licensed under AS 17.38] Up to 1 ounce Illegal10 Illegal - Penalty: A misdemeanor - Penalty: A misdemeanor *Adults over 21 may transfer up to 1 ounce of marijuana (and up to six plants) to another person over 21 without remuneration. AS 17.38.020(c) More than 1 ounce Illegal Illegal (no change) - Penalty: CFelony Personal Home Grow Legal* Legal* *Adults over 18 may possess *BM2 and the Alaska Medical up to four ounces of Marijuana Law permit marijuana (whether in plant or possession of up to six other form) in the privacy of marijuana plants (three of the home for personal use which maybe flowering) under Ravin v. State. Possession of more than 25 *Failure to comply with the plants is a felony, regardless statutory requirements for of weight. personal grow operations is punishable by a fine of up to $750.12 Non - Personal Grow Illegal Illegal 1O AS 11.71.050(a)(1) 11 AS 11.71.040(a)(2) 12 AS 17.38.030(b) F:\505786\81\00469706.DOCX 70 Marijuana Initiative FAQs, Board of Alcoholic Beverage Control https: / /www.commerce- alaska.gov/ web/ amco /MarijuanalnitiativeFAQS.aspx State of Alaska > Commerce > Alcohol & marijuana uoncroi umcu , irIaIqualia • �--� — ,___.____..___�_.__.... -.. -- ALCOHOL & MARIJUANA CONTROL OFFICE MARIJUANA INITIATIVE FAQS ._ _ ........ ...... ..... . - -- - - - -_ - -- - -- _ - - - - - - -- -- ..... - - -- - ._._ .. - - -- ... -- - - -- - - - - - -- - - - -- - Many Alaskans have questions regarding AS 17.38, the act to tax and regulate the production, sale, and use of n "proposition 2" or ballot measure 2 "). The Department of Commerce, Community and Economic Development cr( frequently asked questions. Register to receive notification when new FAQs are added. What is AS 17.38? AS 17.38 was passed by citizen's initiative on the November 4, 2014 ballot. The initiative directs the Alcoholic Be entity if the Legislature chooses to create one) to adopt regulations governing marijuana - related entities and then The ABC Board has nine months from the effective date, which is 90 days after certification of the act by the elec regulations. The ABC Board will follow the intent of the initiative and state requirements for the development of nE MARIJUANA ESTABLISHMENT LICENSE QUESTIONS: w Now that the effective date has passed, can I sell or buy marijuana legally? No. No marijuana establishment licenses have been issued at this time. The marijuana retail store regulation marijuana and marijuana products that have been grown in a licensed marijuana cultivation facility or produc manufacturing facility. The Marijuana Control Board anticipates beginning to issue cultivation and testing lice and product manufacturing licenses in September, 2016. Only after retail marijuana stores are licensed and have legal products on their shelves will you be able to le[ products. Only licensed marijuana establishments will be able to sell marijuana or marijuana products. Buyin license is illegal and could be prosecuted as a crime. . I want to apply for a license. What is the first thing I must do? Secure a location. All licenses are premises based, meaning that the first question to answer is where the lic Applicants must demonstrate a right of possession to the property. You must submit a lease or rental agreen' Zoning is a local issue, other than the buffer zones set out in 3 AAC 306.010. The Marijuana Control Board v a physical place where the license type is allowed by the local government. The Alcohol and Marijuana Cont applicant if the address chosen is locally zoned in such a way that a commercial marijuana establishment we contact your local government. . What types of licenses will be available and when will they be issued? The regulations in 3 AAC 306 provide for six types of marijuana establishment licenses: • Retail Marijuana Store • Standard Cultivation Facility • Limited Cultivation Facility • Marijuana Product Manufacturing Facility • Marijuana Concentrate Manufacturing Facility 71 111411)(11 117.-SR PM Marijuana Initiative FAQs, Board of Alcoholic Beverage Control https: / /www.commerce.alaska.gov/ web/ amco /MarijuanalnitiativeFAQs.aspx • Testing Facility License applications will be taken before the board within 90 days of receipt of a completed application, as o The exact date of license issuance is dependent upon several factors including the 1) type of license applied governments, and 3) the implementation of the marijuana inventory tracking system. 1. Type of license and completed application —AS 17.38.100(b) calls for the board to begin accepting and pi the effective date of the act; therefore, applications will be accepted beginning on February 24, 2016. ThE license within 90 days after a completed application is received. The Marijuana Control Board will issue tE licenses first, with retail store and product manufacturing facility licenses to follow. This sequential issuinc latter license types can have legally grown and tracked marijuana in their inventory before opening for bu 2. Response time from local governments — After the director of the Alcohol and Marijuana Control Office d( staff will transmit the application to the local government with jurisdiction over the proposed licensed prep days from the date of receipt of the notice of the application to file a protest to the application or waive its received, the Marijuana Control Board will consider the application and protest at its next meeting. 3. Marijuana inventory tracking system — All marijuana license types will be required to use the State of Ala., tracking system to assure that marijuana sold in licensed retail stores was grown, produced and tested b� will not issue any lice_ nses before the marijuana inventory tracking system is implemented, the anticipates 2016. - Can I own more than one license? _..- ....._.. - Yes, with one exception— testing facility licenses are independent of all other license types. According to 3 A testing facility may not have any licensee, employee, or agent who holds any type of marijuana establishmer license. Can I get a delivery license? . _..._._ ............ ------ .....- _ - - - -- -- No. No. Delivering marijuana to consumers is not permitted under AS 17.38 or 3 AAC 306. . Can I get a dispensary license? _.._....... .... - - _ ..... -- -- ------ -- No. The term "dispensary" is used in other legalized marijuana states but does not appear in AS 17.38 or 3 / marijuana stores. How many licenses will the MCB issue? The Marijuana Control Board is not limited in the number of marijuana licenses it can issue at the state level. that local governments can restrict the time, place, manner and number of marijuana licenses. Check with yc a local limit on licenses. What is the deadline to apply for a license? ....._._ ................. - - -- — _.._._... -- -- - - -- .......... There is no deadline to apply. The Marijuana Control Board will continue to accept applications year round ai licenses at its regularly scheduled meetings throughout the year. . ._ ............ ... _...__----------- ......_.. -- .._ _ I don't have internet access. How do I apply on a paper form? By regulation 3 AAC 306.020, applications must be initiated electronically in order for applicants to demonstr submit data /documents electronically. You cannot participate in the commercial marijuana industry in Alaska internet access. All marijuana licensees are required to use the statewide marijuana inventory tracking syste stable internet connection and basic computer literacy. The application is initiated electronically so applicant: they have the technological resources to enter the industry at this time. 72 nMIC snit 1 1).co 11A 11 Marijuana Initiative FAQs, Board of Alcoholic Beverage Control https: / /www.commerce.alaska.gov/ web / amco /MarijuanalnitiativeFAQs.aspx Why do I have to initiate my application online? By regulation 3 AAC 306.020, applications must be initiated electronically in order for applicants to demonstr submit data /documents electronically. All marijuana licensees are required to use the statewide marijuana in, electronic and requires a stable internet connection and basic computer literacy. The application is initiated e demonstrate to the board that they have the technological resources to enter the industry at this time. What if I need help with the application? The Alcohol and Marijuana Control Office will provide a detailed set of instructions for the application process available on the website on February 24, 2016. . I just need the short version, can you please just tell me what to do to get a license? - ......_... - - - -- —___— It is very important to read and understand the regulations. For those who have questions after reading the r- Questions, reviewing the instructions and watching the training video, the Alcohol and Marijuana Control Offi appointments and walk -ins with questions; the hours will be published on the AMCO website as they are sch AMCO has a small staff serving a large number of people involved in both the alcoholic beverage and mariju you have not read the regulations when you meet with staff, you will lose your appointment until you have re; _ ... What can I do now, since I cannot apply for a license yet? Prepare to submit your application- 1) Read 3 AAC 306 articles 1, 7, 8, 9 and the specific article(s) that pertains to the type of license(s) you plar license, you are stating that you have read and understand all of the marijuana regulations, and are prepare( 2) Work on your operating plan. All license types are required to submit an operating plan with their applicatil plan are set forth in 3 AAC 306.020(c). You can begin drafting your operating plan based on the information i regulations. . Are cultivation and testing facilities expected to be 100% ready when we apply for license, or will we have time to f 24 and June 9, when cultivation facility and testing licenses are expected to be issued? —� Because the board must approve or deny your application within 90 days from the date your application is d( not initiate your application until you are approximately 90 days from being ready to operate your premises. I schedules are often optimistic. The applicant must ensure that their finished facility matches what is laid out i will undergo a preliminary inspection before operations begin. Because all licenses are premises based, applicants are required to secure a location before applying and rr possession to the property. You do not have to own it but you must submit a lease or rental agreement if you Can I take cuttings or clones from my personal use grow for commerical use when my cultivation facility license is It's expected that cultivators will either start their plants from seeds or from cuttings only after receiving a lice Board. The regulations require that all cuttings that are 8" tall and present on the licensed premises on the d; into the marijuana inventory tracking system. After the initial inventory is established, the regulations prohibit marijuana grown outside the licensed premises being entered into the tracking system. Is the Alcohol and Marijuana Control Office keeping a list of individuals or businesses interested in starting a marij name on? The Alcohol and Marijuana Control Office will begin accepting applications for licenses on February 24, 201E 73 ».c4 Dm Marijuana Initiative FAQs, Board of Alcoholic Beverage Control https: / /www.commerce.alaska.gov /web / amco /MarijuanaMtiativeFAQs.aspx individuals /businesses is being kept by the office. Where can I get the license application forms? I looked all over your website and can't find them. The Marijuana Control Board reviewed application forms at its February 11, 2016 meeting. The finalized forn February 24, 2016. Has anyone had access to the forms ahead of the 2124 application date? -- ------- ---- .._....._._ — -- .............. - -._._. -- ..... _ ...... ..- - -- ...... -- ....__...._ No. The forms were approved by the board at its meeting on 02/11/16. The forms have not been released all board's packet for the meeting. The board changed a few of the forms so no one should attempt to complete available on 02/24/16. I would like to run my business idea by you and see if you think it will be good enough. How do I do that? The AMCO staff cannot answer hypothetical questions or give advice about how the board will respond to a application is structured in a way that requires an applicant to outline its operating plan and for the board to r or deny the license. AMCO staff is not authorized to tell any applicant that their plan is good enough to pas questions will be referred to the pertinent regulations and the applicant must take on the responsibility of artii regulations to the board. PERSONAL USE QUESTIONS: ..- ... _- ..... _ - -- - - -- - - Since the effective date has passed, where can I legally buy marijuana? __ ............ .... . .... .-----.-._ ............. .............. ------- ............................... ._ .... ____ . ..... _ ................. __ .... . ___ ._ ... _._ ............ ...- ....... -- ....... _.__ ...... .......... _ ...................... ---._ ....... .......... ......... _. ........ ._._.... ..... ---.. ............ ..... ..- . .... ... - ------ - -- ._....... _ Nowhere. The Marijuana Control Board will begin issuing cultivation and testing licenses in approximately Ju Store regulations state that stores may only sell marijuana and marijuana products that have been grown in facility or produced in a licensed marijuana product manufacturing facility. Until those other facility types are licensed and begin producing legal marijuana and marijuana products, the licenses. Until Retail Marijuana Stores are licensed and have legal products on their shelves, buying or sellin illegal and could be filed and prosecuted as a crime. Will it continue to be a criminal offense for persons under 21 years of age to possess any amount of marijuana? Yes. AS 17.38.010 made the use of marijuana legal only for persons 21 years of age or older. AS 17.38.040 bans public consumption. How is "public" defined? Based on the emergency regulation filed by Lieutenant Governor Byron Mallott on February 24, 2015, in AS place to which the public or a substantial group of persons has access and includes highways, transportatior amusement or business, parks, playgrounds, prisons,'and hallways, lobbies, and other portions of apartment rooms or apartments designed for actual residence. On November 20, 2015, the Marijuana Control Board ar marijuana retail stores that have a consumption endorsement issued by the board. No such endorsements h continues to be a violation of AS 17.38.040 to consume marijuana in a public place, including unlicensed, un _......._._............. .......... ..... _ ... _ ..... _ ........ ....__ ...... -- .......... -- ... ............. -- ----._ .......... _ ........ ... ..._._.__ ... _ ... __ ........ ... -- - -- w How much harvested marijuana does AS 17.38 allow an unlicensed person to possess in his or her home? AS 17.38.020 allows for the in -home production and possession of marijuana for personal use. AS 17.38.02( marijuana harvested from up to six plants (three or fewer being mature, flowering plants) on the premises wt statute does not specify a limit on the amount of harvested marijuana that may be possessed. 3 If multiple people live in a single residence, can they combine personal -use plant and /or harvested- marijuana limit: the legal limit for the residence? 74 �i��i�ni� i�•cst PAA Marijuana Initiative FAQs, Board of Alcoholic Beverage Control https: / /www.commerce.alaska.gov/ web / amco /MarijuanalnitiativeFAQs.aspx AS 17.38.020 allows for the in -home production and possession of marijuana for personal use. That statute of 21 may grow up to six plants, up to three of which may be flowering, in their home. The statute is silent on on the number of plants that may be grown when more than one adult resides there. There is legislation this plant per household limit. The Marijuana Control Board has clarified through definitions that personal grows circumvent licensure requirements. See 3 AAC 306.990. Can a person legally possess more than four ounces of harvested marijuana by establishing an unlicensed cooper acting as a proxy for another person? M How does AS 17.38 change the legality of operating a motor vehicle while under the influence of marijuana. Marijuana continues to be a controlled substance in Title 11 even after the effective date of AS 17.38. It is a c motor vehicle while under the influence of any controlled substance, inhalant, alcoholic beverage, or any con crime to drive a motor vehicle while impaired. Do persons registered in the Alaska Medical Registry Program as set forth in AS 17.37 receive any benefit or prote, 17.38.020? No. Nothing in AS 17.38 changed any privileges and prohibitions related to medical cards issued per AS 17.: _..._._. --- ....... ___— Can a property owner ban someone from possessing, growing or consuming marijuana on his/her private property' ....._...._._...:....... ---..._..._....:... .... _. .... _._._ ___. ........ -- .._._. ...... —._ -- ..._.... — _ __.._..__.._.._... - -- --- ..._.. - -- -- Yes. AS 17.38.120(d) states that a person, employer, school, hospital, recreation or youth center, correction entity who occupies, owns or controls private property may prohibit or otherwise regulate the possession, coi distribution, sale, transportation or growing of marijuana on or in that property. FINANCING QUESTIONS: V I am hoping to start a marijuana business. What do I need to know about raising capital for my business? i...... _.. .......... __._—___.__ ... _ ..... _..__._. _.__ ...... - -..._ _ _ _ _ --- .._..._._............_..._ _---_....__..._...._....__.-...__.__.._................... ... __..—.__ .... _ ............ ----- ...... _ ............ — Seeking investors for your business may involve state and federal securities laws. Before offering securities securities laws and regulations and consult a professional who is knowledgeable about securities transactior meeting certain securities law requirements, you may not advertise to find investors. This prohibition include: your own website, Facebook, Twitter, and Craigslist. Offering a security may involve legal and financial consequences that can result in civil liability and money d,, law. Contact the Division of Banking and Securities at (907) 269 -8140 or (888) 925 -2521 or visit the Division information. LOCAL OPTION QUESTIONS: Will individual communities be able to opt out of allowing commercial marijuana establishments? Yes. AS 17.38 and 3 AAC 306.200 provide that local governments as defined in AS 17.38.900 can opt out of establishments by ordinance or petition election. Local government officials interested in the opt -out process regulations. Do you maintain a list of communities that have already opted out? No. At this time, local governments are not required to report to the Alcohol and marijuana Controi viku kA11 commercial marijuana establishments by ordinance or petition election. AMCO is attempting to obtain assist,, this information. Check back on this question in the future for updates. . 75 11.49 DA4 Marijuana Initiative FAQs, Board of Alcoholic Beverage Control https: / /www.commerce.alaska.gov/ web/ amco /MarijuanalnitiativeFAQs.aspx w Do you maintain a list of municipal zoning ordinances or other local government ordinances related to marijuana? No. Again, there is no obligation on the part of local governments to report this information to the Alcohol an( I want to open a marijuana business at 123 Sally Street in Medium City, Alaska. Can you tell me if this location will v The Alcohol and Marijuana Control Office cannot advise any potential applicant if the address chosen is loca commercial marijuana establishment would be permitted in that location. This is a question for your local gov The 500 foot buffer zone blocks off the location I want to use for a marijuana licensed premises. Can my local govei Marijuana Control Board to allow it? T ~ No. The 500 foot buffer zone is the inside limit for the proximity of a marijuana licensed establishment to a sc building where religious services are held, or correctional facility. Please read 3 AAC 306.010(a) to determin( 500 foot distance represents the State of Alaska's Drug Free School Zone. REGULATORY QUESTIONS: Who wrote the regulations in 3 AAC 306? ........ _._ - - - - -- The contract attorney, Alcohol and Marijuana Control Office staff, the Marijuana Control Board, the DepartmE final regulatory product together. The Alcohol and Marijuana Control Office retained Virginia Rusch, a contract attorney who specializes in wril the Alaska Attorney General's Office in the Regulations Section for many years. Ms. Rusch and AMCO staff Marijuana Control Board (MCB); prior to the MCB members being seated on July 2, 2015, draft regulations v Beverage Control Board as outlined in 17.38.080. The board put sections of regulations out for public comma received, and made many changes to the regulations during 14 separate board meetings in 2015. Once the Department of Law reviewed the regulations and recommended technical changes. Lieutenant Governor Byi January 22, 2016 with an effective date of February 21, 2016. . ..... ........._.._.__._..�__......._ Where can I get a copy of the marijuana regulations? You may download and save the final regulations as amended and adopted by the Marijuana Control Board. if you choose to print the regulations you may want to consider printing two pages on one sheet of paper, i.e. properties screen. R The location of the premises 1 am considering is near a park. Is that allowed? ........... _ ... - ..... - -- - ..._....._.. -- ._...... - -- __ ...... - .._._........... - ... __ - -- ._ ._......._._..._.._._.._...._.. — - -- ......... _._ ..... _ - -- __. — The only location rules defined by the State of Alaska are the buffer zones set out in 3 AAC 306.010(a), whic license from being issued within 500 feet of a school, recreation or youth center (defined in 3 AAC 306.9000 services are regularly conducted, or a correctional facility. Please see the regulation for instructions regardin! other zoning issues are locally established; contact your local government to inquire about zoning restriction: _..._._ ... .... _. ... ..... -..- ......... ......... ---.. ...... __ .... _._ ............._....- - -- Can I lease some warehouse space and tend to my friend's personal use grows? _ No. AS 17.38.020 only permits adults over the age of 21 to possess one ounce and grow 6 plants, with three permits adults to keep the harvest of their personal use plants on the premises where the plants were grown less of marijuana and give an ounce or less to someone else. You cannot buy or sell your personal use marij others to make what looks like a commercial grow operation. Do the existing regulations allow a home -rule municipality to protest the issuance of a marijuana license? Also, do municipalities from charging a permit fee to operate marijuana facilities in city limits? 76 Marijuana Initiative FAQs, Board of Alcoholic Beverage Control https: / /www.commerce.alaska.gov/ web / amco /MarijuanainitiativeFAQs.aspx A home rule municipality is included in the definition of local government. Local governments have a right of governments can tax marijuana or charge fees for municipal licenses or permits. Department/Division AMCO Banking & Securities Revenue Contact Person 1 Title Email John Calder Administrative Officer marijuana @alaskE ...... .. ................ ........ ............... ...__.. ... ... _.... ....................- George Humm Janis Hales Fairbanks 1979 Peger Rd. Fairbanks, AK 99701 Phone (907) 451 -2030 Richard Finney Investigator III _........._ ..... _ . . ............... .......... ... ......... . .... ..... .... Securities Examiner ' george.humm @al: Income & Excise Tax Specialist I Janis.hales @alasl We acce t credit cards ,•^�4tG"� , n :,: n m tlutr . lnxrnulu.Nrert Juneau State Office Building, 9th floor 333 Willoughby Ave Juneau, AK 99801 Phone (907) 465 -2330 Steven Johnson Investigator III 77 117-SR PM Disclaimer The following regulations were adopted by the Marijuana Control Board, on November 20, 2015 and amended on December 1, 2015. Following adoption, the regulations were reviewed by the Department of Law and signed into law by Lieutenant Governor Byron Mallot AS CORRECTED BY THE DEPARTMENT OF LAW. What is included below is NOT reflective of the changes made by the Department of Law. To see their changes, please click on the link below. The full notice can be found on the Alaska Online Public Notice System under the title "Alaska Administrative Code - Title 3 - Marijuana Control Board - Omnibus licensure requirements and procedures for marijuana establishments" https: / /aws.state.a k.us /Online Pubi!cNotices /N otices /Attachment.aspx ?id= 102183 The effective date of the regulation is February 21, 2016. The entire set of regulations incorporating changes made by the department of law in a typed rather than handwritten format will not be available until formally published, sometime around April of 2016. Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 3 AAC is amended by adding a new chapter to read: Chapter 306. Regulation of Marijuana Industry. Article beginning page 1. Licensing, Fees (3 AAC 306.005 - 3AAC 306.100) 1 2. Local Options (3 AAC 306.200 - 3AAC 306.260) 28 3. Retail Marijuana Stores (3 AAC 306.300 - 3AAC 306.360) 34 4. Marijuana Cultivation Facilities (3 AAC 306.400 - 3AAC 306.480) 44 5. Marijuana Product Manufacturing Facilities (3 AAC 306.500 - 3AAC 306.570) 63 6. Marijuana Testing Facilities (3 AAC 306.600 - 3AAC 306.675) 80 7. Operating Requirements for All Marijuana Establishments (3 AAC 306.700 - 3AAC 306.755) 97 8. Enforcement, Civil Penalties (3 AAC 306.800 - 3AAC 306.850) 112 9. General Provisions (3 AAC 306.905 - 3AAC 306.990) 122 Article 1. Licensing, Fees. Section 05. License required 10. License restrictions 15. License conditions 20. Application for new license 25. Application procedure 30. Petition for license in area with no local government 35. Application for renewal of license 0 00 0 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 1211/2015 40. Ownership change to be reported 45. Application for transfer of a license to another person 50. Relocation of licensed premises not allowed 55. Criminal justice information and records 60. Protest by local government 65. Public participation 70. Hearing on public protest 75. Procedure for action on license application 80. Denial of license application 85. Informal conference 90. Formal hearing 95. Appeals 100. Fees, refund 3 AAC 306.005. License required. A marijuana establishment may not operate in the state unless it has obtained the applicable marijuana establishment license from the board. The board will issue the following marijuana establishment licenses under this chapter. (1) a retail marijuana store license, granting authority for activities allowed under AS 17.38.070(a), and subject to the provisions of 3 AAC 306.300 - 3 AAC 306.360 and 3 AAC 306.700 - 3AAC 306.755; (2) a marijuana cultivation facility license, as described in 3 AAC 306.405 — 3 AAC 306.410, granting authority for activities allowed under AS 17.38.070(b), and subject to the provisions of 3 AAC 306.400 - 3 AAC 306.480 and 3 AAC 306.700 - 3AAC 306.755; (3) a marijuana product manufacturing facility license, as described in 3 AAC 2 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 306.505 and 3 AAC 306.515, granting authority for activities allowed under AS 17.38.070(c), and subject to the provisions of 3 AAC 306.500 - 3 AAC 306.570 and 3 AAC 306.700 — 3 AAC 306.755; and (4) a marijuana testing facility license, granting authority for activities allowed under AS 17.38.070(d), and subject to the provisions of 3 AAC 306.600 - 3 AAC 306.675 and 3 AAC 306.700 - 3AAC 306.755. (Eff. _/_ / Register _) Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 3 AAC 306.010. License restrictions. (a) The board will not issue a marijuana establishment license if the licensed premises will be located within 500 feet of a school grounds, a recreation or youth center, a building in which religious services are regularly conducted, or a correctional facility. The distance specified in this subsection must be measured by the shortest pedestrian route from the public entrance of the building in which the licensed premises would be located to the outer boundaries of the school, recreation or youth center, or the main public entrance of the building in which religious services are regularly conducted, or the correctional facility. This section does not prohibit the renewal of an existing marijuana establishment license or the transfer of an existing marijuana establishment license to another person if the licensed premises were in use before the school, recreation or youth center, the building in which religious services are regularly conducted, or the correctional facility began use of a site within 500 feet. If an existing marijuana establishment license for premises located within 500 feet of a school, a recreation or youth center, a building in which religious services are regularly conducted, or a correctional facility is revoked, or expires, the board will not issue another 3 00 ►+ Register_, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 marijuana establishment license for the same premises unless the school, the recreation or youth center, the building in which religious services are regularly conducted, or the correctional facility no longer occupies the site within 500 feet. (b) The board will not issue a marijuana establishment license if the licensed premises will be located in a liquor license premises. (c) The board will not issue a marijuana establishment license when a local government protests an application under 3 AAC 306.060 on the grounds that that the applicant's proposed licensed premises are located in a place within the local government where a local zoning ordinance prohibits the marijuana establishment, unless the local government has approved a variance from the local ordinance. (d) The board will not issue a marijuana establishment license to a person that (1) is prohibited under AS 17.38.100(i) from receiving a marijuana establishment license because of a conviction of a felony; if the applicant is a partnership, limited liability company, or corporation, the board will not issue a license if any person named in 3 AAC 306.020(b)(2) is prohibited under AS 17.38.100(i) from obtaining a license; in this paragraph, ..conviction of a felony" includes a suspended imposition of sentence; (2) has been found guilty of (A) selling alcohol without a license in violation of AS 04.11.010; or (B) selling alcohol to a minor in violation of AS 04.16.051 or AS 04.16.052; or (C) a misdemeanor crime involving a controlled substance, violence against a person, use of a weapon, or dishonesty within the preceding five years (3) has, within two years before submitting an application, been convicted of a 4 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 class A misdemeanor relating to selling, furnishing, or distributing marijuana or operating an establishment where marijuana is consumed contrary to state law.. (Eff. _/ /_ Register Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 'AS 17.38.090 AS 17.38.900 AS 17.38.084 3 AAC 306.015. License conditions. (a) The board will issue each marijuana establishment license to a specific individual, to a partnership, including a limited partnership, to a limited liability company, to a corporation, or to a local government. A person other than a licensee may not have a direct or indirect financial interest in the business for which a marijuana establishment license is issued. (b) The board will not issue a marijuana establishment license to (1) an individual or a sole proprietorship unless the individual or proprietor is a resident of the state; (2) a partnership unless each partner is a resident of the state; (3) a limited liability company unless the limited liability company is qualified to do business in the state, and each member of the limited liability company is a resident of the state; or (4) a corporation unless the corporation is incorporated or qualified to do business in the state, and each shareholder is a resident of the state. (c) The board will issue each license for a specific location identified on the license as the licensed premises. A marijuana establishment must have a right to possession of its licensed premises at all times, and may not lease its licensed premises to another person for any reason. If 5 00 N Register, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 • marijuana establishment wishes to reduce or expand the area of the licensed premises used for • marijuana establishment, the marijuana establishment must submit a new line drawing showing the proposed changes to the premises, and must obtain the board's written approval. A marijuana establishment may not relocate its licensed premises to a different place without obtaining a license for the new premises. (d) The board will impose other conditions or restrictions on a license issued under this chapter when it finds that it is in the interests of the public to do so. (e) In this section, (1) "direct or indirect financial interest" means (A) a legal or equitable interest in the operation of a business licensed under this chapter; (B) does not include a person's right to receive (i) rental charges on a graduated or percentage lease -rent agreement for real estate leased to a licensee; or (ii) a consulting fee from a licensee for services that are allowed under this chapter, (2) "resident of the state" means a person who meets the residency requirement under AS 43.23 for a permanent fund dividend in the calendar year in which that person applies for a marijuana establishment license under this chapter. (Eff. /_ /_, Register _) Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 3 AAC 306.020. Application for new license. (a) An applicant for a new marijuana 6 Register r, 2016 COMMERCE, CONV%4 TTy, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 establishment license must file an application as provided in 3 AAC 306.025, on a forth the board prescribes, with the information and documents described in this section, along with the application fee and the annual license fee set out in 3 AAC 306.100, and the fingerprint cards and fees required by 3 AAC 306.055(a). The application must be initiated electronically; the completed application and fees may be filed electronically, or mailed or delivered to the director at the office of the board. (b) An application for a new marijuana establishment license must include (1) the name of the applicant and any business name the applicant will use for the proposed marijuana establishment, along with the applicant's state business license number issued under AS 43.70; (2) the name, mailing address, telephone number, and social security number of each proposed licensee and each affiliate of each proposed licensee; unless the context indicates otherwise, "licensee" means each individual named in an application that complies with this section; an individual to be identified as a "licensee' under this section includes (A) if the applicant is an individual or a sole proprietor, the individual or sole proprietor, (B) if the applicant is a partnership, including a limited partnership, each partner holding any interest in the partnership; (C) if the applicant is a limited liability company, each member holding any ownership interest; and (D) if the applicant is a corporation, each owner of any of the corporation's stock (E) if the applicant is a local government, an authorized official of the 7 Register 2016 COMMERCE, COMMUNITY; AND EC. DEV. Final Adopted Regulations as of 12/1/2015 local government. (3) for each applicant that is not an individual, the applicable documents and information as follows: (A) for a partnership, including a limited partnership, the partnership agreement, the name of each general or managing partner, and a list of all partners with percentage of ownership of each partner, (B) for a limited liability company, the limited liability company agreement, and a list of all members with the percentage of ownership of each member, (C) for a corporation, the certificate of incorporation, the name of each corporate officer, and a list of all shareholders with percentage of ownership of each shareholder, 00 (D) for a local government, a resolution of the governing body approving w the application and designating an official responsible for the proposed marijuana establishment. (4) for each person listed in compliance with paragraph (2) of this subsection, a statement of financial interest on a form the board prescribes; (5) for each applicant that is not an individual, the name of the individual licensee or designated government official listed in the application under paragraph (2) of this subsection who is responsible for (A) management of the marijuana establishment; and (B) compliance with state laws; (6) an electronic mail address at which the applicant agrees to receive any correspondence from the board before and after it receives a license; an applicant and a licensee must ensure that any electronic mail address provided to the board is current so that the board Register, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 can contact the applicant or licensee at any time; (7) the type of license the applicant is requesting; (8) the address of the premises to include GPS coordinates where the applicant intends to operate a marijuana establishment; and a detailed diagram of the proposed licensed premises; the diagram must show all entrances and boundaries of the premises, restricted access areas, and storage areas; (9) the title, lease, or other documentation showing the applicant's right to possession of the proposed licensed premises; (10) an affidavit showing where and when the applicant posted notice of the application; and proof of advertising as required in 3 AAC 306.025(b); and (11) additional information required by the board as follows: (A) for a retail marijuana store, the information required under 3 AAC 306.315; (B) for a marijuana cultivation facility, the information required under 3 AAC 306.420; (C) for a marijuana product manufacturing facility, the information required under 3 AAC 306.520; and (D) for a marijuana testing facility, the information required under 3 AAC 306.615. (c) A marijuana establishment license application must include the applicant's operating plan, in a format the board prescribes, describing, to the board's satisfaction, the proposed marijuana establishment's plans for (1) security; 8 9 Register_ 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 (2) inventory tracking of all marijuana and marijuana product on the premises; (3) employee qualification and training; (4) waste disposal; (5) transportation and delivery of marijuana and marijuana products; and (6) signage and advertising. (d) An application for a marijuana establishment license must be signed by (1) the applicant, if the applicant is an individual; (2) an authorized general partner if the applicant is a partnership, including a limited partnership; (3) a member who owns at least 10 percent of the limited liability company if the applicant is a limited liability company; (4) the authorized officers of the corporation if the applicant is a corporation; or A (5) a designated official if the applicant is a local government. (e) Each person signing an application for a marijuana establishment license must declare under penalty of unworn falsification that (1) the application is true, correct, and complete; (2) the applicant has read and is familiar with AS 17.38 and this chapter; and (3) the applicant will provide all information the board requires in support of the application. (Ef. /_/ ,Register_) Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 Editor's note: Forms and instructions for filing an application for a marijuana establishment license can be obtained online at the Marijuana Control Board's website or at the Register__2016 COMMERCE, COMMUNITY, AND EC. DEV. Fi nal Adopted Regulations as of 12/1/2015 board's office. The board's Internet address is www.commerre.alaska.gov /web /abc/ and its office is at 550 West 7th Ave. Suite 1600, Anchorage, AK 99501. The board's telephone number is (907)269 -0350. 3 AAC 306.025. Application procedure. (a) An applicant shall initiate a new marijuana establishment license application on a form the board prescribes, using the board's electronic system. (b) As soon as practical after initiating a new marijuana license application, the applicant shall give notice of the application to the public by (1) posting a copy of the application, on the form the board prescribes, for 10 days at (A) the location of the proposed licensed premises; and (B) one other conspicuous location in the area of the proposed premises; and (2) publishing an announcement once a week for three consecutive weeks in a newspaper of general circulation in the area; in an area where no newspaper circulates, by announcements on a radio station serving the local area where the proposed licensee seeks to operate twice a week for three successive weeks during triple A advertising time; the newspaper or radio notice must state (A) the name of the applicant; (B) the name and location of the proposed premises; (C) the type of license applied for along with a citation to a provision of this chapter authorizing that-type of license; and (D) a statement that any comment or objection may be submitted to the board; and 10 11 00 to Register, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 (3) submitting a copy of the application on the form the board prescribes to (A) the local government; and (B) any community council in the area of the proposed licensed premises. (c) After the applicant completes the notice requirements in (b) of this section and submits each remaining application requirement listed in 3 AAC 306.020, the applicant shall pay the application and licensing fees set out in 3 AAC 306.100. The applicant must then use the board's electronic system to inform the board that the applicant has submitted a complete application. (d) When the director receives an application for a marijuana establishment license, the director shall determine if the application is complete. Any application for a marijuana establishment license that the director receives without the application fee is incomplete. If the director determines the application is complete, the director shall immediately give written notice to premises; (1) the applicant; (2) the local government with jurisdiction over the applicant's proposed licensed (3) the community council if the proposed licensed premises are located within the boundary of a community council established by municipal charter or ordinance; and (4) any nonprofit community organization that has requested notification in writing. (e) If an application for a marijuana establishment license is incomplete, the director shall notify the applicant by email at the address provided by the applicant, and will either (1) return an incomplete application in its entirety; or 12 Register r. 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 (2) request the applicant to provide additional, identified items needed to complete the application. (f) When the director informs an applicant that its application is incomplete as provided in (e) of this section, the applicant must complete the application not later than 90 days after the date of the director's notice. If an applicant fails to complete its application during the 90 day period after the director's notice, the applicant shall file a new application and pay a new application fee to obtain a marijuana establishment license. (Eff. _/ /_, Register__) Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 3 AAC 306.030. Petition for license in area with no local government. (a) The board will not approve a new license in an area outside, but within 50 miles of, the boundary of a local government unless the board receives a petition to issue the license signed by a majority of the permanent residents residing within one mile of the proposed premises. (b) The board will not approve a new license in an area that is 50 miles or more from the boundary of a local government unless the board receives a petition to issue the license containing the signatures of two-thirds of the permanent residents residing within a radius of five miles of the United States post office station nearest to the proposed licensed premises. If there is no United States post office station within a radius of five miles of the proposed licensed premises, the petition must be signed by two- thirds of the permanent residents residing within a five mile radius of the proposed licensed premises. (c) A petition authorized by this section must be on a form the board prescribes. The applicant must obtain the required signatures within the 90 day period immediately before 13 co ON Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 submitting the petition to the board. A signature may not be added to or removed from the petition after the board has approved the application. (d) In this section, "permanent resident" means a person 21 years of age or older who has established a permanent place of abode. A person maybe a permanent resident of only one place. (Ef. . / / Register_) Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 3 AAC 306.035. Application for renewal of license. (a) On or before May 1 of each year, the director shall send notice that a marijuana establishment must file a renewal application not later than June 30 of the current year. The director shall send the notice to the marijuana establishment's electronic mailing address on file with the board. The notice will include a hyperlink for the marijuana establishment to access the electronic renewal application by means of the internet, along with instructions on using and submitting the form. The marijuana establishment must submit the completed renewal application electronically, along with the license renewal fee, to the director no later than June 30 of each year, ifJune 30 falls on a Saturday or Sunday, the deadline is extended to 4:30 p.m. on the first business day following June 30. A marijuana establishment must maintain a current electronic mailing address on file with the director. A marijuana establishment is not excused from filing a renewal application as required in this section even if the marijuana establishment fails to receive a renewal notice from the director. (b) A marijuana establishment's renewal application must (1) identify the license sought to be renewed by license number, license type, 14 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 establishment name, and premises address; (2) provide the information required for a new license application under 3 AAC 306.020(b)(1) -(9); (3) report any change from the marijuana establishment's new license application or last renewal application, and pay the fee as provided in 3 AAC 306.100 for board review of any change in (A) the name of the marijuana establishment business; (B) the licensed premises from the last diagram submitted; and (C) the marijuana establishment's operating plan; (D) any new product a licensed marijuana product manufacturing facility wishes to produce; (4) report, for each licensee listed in 3 AAC 306.020(bX2), (A) any criminal charge on which that licensee has been convicted in the previous two calendar years; and (B) any civil violation of AS 04, AS 17.38, or this chapter in the previous two calendar years; and (5) declare under penalty of unswom falsification that (A the application is true, correct and complete; (B) the applicant has read and is familiar with AS 17.38 and this chapter, and (C) the applicant will provide all information the board requires in support of the renewal application. (c) If the director determines that the renewal application is complete, the director shall 15 00 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 give written notice of a renewal application to (1) the applicant; (2) the local government in the area in which the applicant's proposed licensed premises are located; (3) the community council if the proposed licensed premises are located within the boundary of a community council established by municipal charter or ordinance; and (4) any nonprofit community organization that has requested notification in writing. (d) The director may require an applicant for renewal of a license under this chapter to submit fingerprints and pay fees as required by 3 AAC 306.055(a). (e) A licensee that does not deliver a renewal application to the director on or before June 30 of each year is delinquent, and must pay a non - refundable $1,000 late renewal application fee with the renewal application. (f) On or before August 15 of each year, the director shall deliver a notice of expiration to each marijuana establishment that has not filed a complete application for renewal of a license, along with any applicable affidavit and the required fee, unless the marijuana establishment has notified the director that it does not intend to seek a renewal of its license. The director shall deliver the notice of expiration to the electronic mail address the marijuana establishment has provided to the director. A marijuana establishment is not excused from filing a license renewal application not later than August 31 of each year even if the marijuana establishment does not receive the notice of expiration described in this section. (g) If a marijuana establishment fails to deliver a complete license renewal application, or fails to pay the required renewal fee and the late renewal application fee on or before August 16 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 31 of each year, that marijuana establishment license expires at 12:00 midnight on August 31 of that year. A holder of an expired license shall immediately return the license to the board. Any holder of an expired license that seeks authority to operate must file a complete new application under 3 AAC 306.020, and 3 AAC 306.025, along with the required fees. (Ef. . /_ /_, Register Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 3 AAC 306.040. Ownership change to be reported. (a) A licensed marijuana establishment shall, not later than 10 days after an ownership change as described in this section, report the change on a form prescribed by the board. In this section, an ownership change means (1) ifthe licensee is a partnership, including a limited partnership, any change in the identity of the partners, or in the ownership percentages held by any partners; (2) if the licensee is a limited liability company, any change in the identity of the members, or in the ownership percentage held by any member, or (3) if the licensee is a corporation, any sale of corporate stock to a person not currently an owner, or any change of the percentage ownership of an existing shareholder. (b) If any change required to be reported under this section will result in a change in controlling interest of the marijuana establishment license, the marijuana establishment must file an application for transfer of license to another person under 3 AAC 306.045. (Eff. Register_ Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 17 00 00 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 AS 17.38.084 3 AAC 306.045. Application for transfer of a license to another person. (a) A person may not receive or transfer a marijuana establishment license or a controlling interest in a marijuana establishment license issued to a partnership, including a limited partnership, a limited liability company, a corporation or a local government, without applying for and receiving the written consent of the board. Transfer of a license includes a sale of all or part ofthe interest of an individual owner. (b) An application for transfer of a marijuana establishment license, or of a controlling interest in a marijuana establishment license issued to a partnership, a limited liability company, a corporation or a local government, must be filed in writing on a form the board prescribes, in compliance with the application procedure set out in 3 AAC 306.025. The application must name the current holder of the marijuana establishment license and the proposed transferee, including all persons listed in 3 AAC 306.020 if the transferee is a partnership, limited liability company, a corporation, or a local government. The application must contain the following information: (1) the same information about each transferee as is required of an applicant for a new license under 3 AAC 306.020; (2) a statement, under oath, executed by the current holder of the marijuana establishment license, listing all debts of the business, all taxes the business owes, current contact information for each creditor, and an affirmation that the current holder of the marijuana establishment license has submitted a copy of the transfer application to all creditors; and (3) any other information required by the board for the type of marijuana establishment license sought to be transferred. 18 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 (c) When the board receives a complete application for transfer of a license to another person, the director shall immediately send written notice of the proposed transfer to (1) each listed creditor of the current holder of the marijuana establishment license, along with the amount shown as owed to that creditor, (2) the local government in the area in which the licensed premises are located; (3) the community council if the licensed premises are located within the boundary of a community council established by municipal charter or ordinance; and (4) any nonprofit community organization that has requested notification in writing. (d) A current holder of a marijuana establishment license must submit a license renewal application before or at the same time as an application for a transfer of a marijuana establishment license that is submitted after April 30 and before July 1. (Efi: Register_ Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 3 AAC 306.050. Relocation of licensed premises not allowed. A marijuana establishment license may not be relocated to any other premises. A holder of a marijuana establishment license that wishes to operate a marijuana establishment at different location must submit a new application for any new premises, and must surrender an existing license for any premises where the marijuana establishment does not intend to continue its operation. (Eff. _/ /_, Register_) Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 19 Go 1z Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 3 AAC 306.055. Criminal justice information and records. (a) When filing an application for a new marijuana establishment license or transfer of a license, the applicant, including each individual listed in 3 AAC 306.020(bx2), must submit the person's fingerprints and the fees required by the Department of Public Safety under AS 12.62.160 for criminal justice information and a national criminal history record check. (b) The director shall submit the fingerprints to the Department of Public Safety to obtain a report of criminal justice information under AS 12.62 and a national criminal history record check under AS 12.62.400. The board will use the information obtained under this section to determine if an applicant is qualified for a marijuana establishment license. (c) In this section, "criminal justice information" has the meaning given in AS 12.62.900. (Eff / / Register_) Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 3 AAC 306.060. Protest by local government. (a) Not later than 60 days after the director sends notice of an application for a new marijuana establishment license, renewal of a marijuana establishment license, or transfer of a marijuana establishment license to another person, a local government may protest the application by sending the director and the applicant a written protest and the reasons for the protest. The director may not accept a protest received after the 60 -day period. If a local government protests an application for anew or renewal license or for a transfer of a license to another person, the board will deny the application unless 20 Register_ 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 the board finds that the protest is arbitrary, capricious, and unreasonable. (b) A local government may recommend that the board approve an application for a new license, renewal of a license, or transfer of a license to another person subject to a condition. The board will impose a condition a local government recommends unless the board finds the recommended condition is arbitrary, capricious, and unreasonable. If the board imposes a condition a local government recommends, the local government shall assume responsibility for monitoring compliance with the condition unless the board provides otherwise. (c) If a. local government determines that a marijuana establishment has violated a provision ofAS 17.38, this chapter, or a condition the board has imposed on the licensee, the local government may notify the board. Unless the director finds that the local govemment'§ notice is arbitrary, capricious, and unreasonable, the director will prepare the determination as an accusation against the licensee under AS 44.62.360 and conduct proceedings to resolve the matter as provided under 3 AAC 306.820. (Efi / /_, Register__) Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 3 AAC 306.065. Public participation. A person may object to an application for a new license, renewal of a license, or transfer of a license to another person by submitting a written statement of reasons for the objection to the board and the applicant not later than 30 days after notice of the application, but no later than the deadline for objections stated in a posted or published notice of the application. The objection must be sent to the applicant at the mailing address or electronic mail address provided in the notice of application. If the board determines to conduct a public hearing under this section, an interested person may give oral testimony at 21 Register _­2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV, . the public hearing. (Eff. /_ / Register Final Adopted Regulations as 12/1/2015 _� petition, and any testimony received at a hearing on public protest held under 3 AAC 306.070 Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 when it considers the application. The director will retain the written objection, n, protest, or AS 17.38.070 AS 17.38.090 AS 17.38.900 suggested condition or petition, and the hearing ecord of the B as part permanent record of the AS 17.38.084 board's review of an application (Eff. / /_, Register_ 3 AAC 306.070. Hearing on public protest. The board may, on its own initiative or in Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 response to an objection or protest, hold a hearing to ascertain the reaction of the public or a AS 17.38.070 AS 17.38.090 AS 17.38.900 local government to an application. The director will send notice of a hearing under this section AS 17.38.084 as provided in AS 44.62. (Eff. / / Register _� 3 AAC 306.080. Denial of license application. (a) After review of the application, Authority: AS 17.38.010 AS 17.38.087 AS 17.38. 100 including the applicant's proposed operating plan and all relevant information, the board will AS 17.38.070 AS 17.38.090 AS 17.38.900 deny an application for a new license if the board finds that AS 17.38.084 (1) the application is not complete as required under the applicable provisions of 3 AAC 306.075. Procedure for action on license application. (a) The board will 3 AAC 306.020 - 3 AAC 306.055, or contains any false c decide whether to grant or deny an application not later than 90 days after receiving the complete statement of material fact; or (2) the license would violate any restriction in 3 AAC 306.010; or application. However, the board will not grant or deny the application before (3) the license would violate any restriction applicable to the particular license (1) the time allowed for a protest under 3 AAC 306.060, unless the local type authorized under this chapter; government waives its right to protest; or (4) the license is prohibited under this chapter as a result of an ordinance or (2) the time allowed for an objection under 3 AAC 306.065 has elapsed. election conducted under AS 17.38.110, 3 AAC 306.200, or 3 AAC 306.230; (b) Not later than 7 days before the date set for board action on an application for a new (5) the board finds that the operating plan does not adequately demonstrate that license, renewal of a license, or transfer of a license to another person, the director will post a the applicant will comply with applicable provisions of this chapter, or meeting agenda listing the matters scheduled for action at that meeting. The board may review (6) the license would not be in the best interests of the public. an application for a new license, renewal of a license, or transfer of a license to another person, (b) After review of the application and all relevant information, the board without additional notice to the applicant. will deny an application for renewal of a marijuana establishment license if the board finds (c) The board will consider any written objection, protest, suggested condition, or (1) any cause listed in (a) of this section; 22 23 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 (2) that the license has been revoked for any cause; (3) that the license has been operated in violation of a condition or restriction the board previously imposed; or (4) that the applicant is delinquent in the payment of taxes due in whole or in part from operation of the licensed business. (c) After review of the application and all relevant information, the board will deny an application for transfer of license to another person if the board finds (1) any cause listed in (a) ofthis section; (2) that the transferor has not paid all debts or taxes arising from the operation of the business licensed under this chapter unless the transferor gives security for the payment of the debts or taxes satisfactory to the creditor or taxing authority; (3) that transfer of the license to another person would result in violation of the provisions of this chapter relating to identity of licensees and financing of licensees; or (4) that the prospective transferee does not have the qualifications of an original applicant required under this chapter. (d) If the board denies an application for a new license, renewal of a license, or transfer of a license to another person, the board will, not later than 15 days after the board meeting at which the application was denied, furnish a written statement of issues to the applicant, explaining the reason for the denial in clear and concise language, and identifying any. statute or regulation on which the denial is based. The notice of denial will inform the applicant of the right to an informal conference under 3 AAC 306.085, and to a formal hearing under 3 AAC 306.090. (Eff. /_/_, Register_ Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 24 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 3 AAC 306.085. Informal conference. (a) An applicant for a new license, renewal of a license, or transfer of a license to another person that is aggrieved by an action of the board denying the application may, no later than 15 days after the date of the written notice of denial, request an informal conference with the director or the board. An informal conference requested under this section must be field at a time and place convenient to the applicant and the board, but not later than the next scheduled meeting of the board. An informal conference may be conducted telephonically. (b) If the informal conference does not resolve the matter to the applicant's satisfaction, the applicant may, within 15 days after the last day of the informal conference, request a formal hearing under 3 AAC 306.090 by filing a notice of defense in compliance with AS 44.62.380(b). (EfI / /_, Register_) Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 3 AAC 306.090. Formal hearing. An applicant for anew license, renewal of a license, or transfer of a license that is aggrieved by an action ofthe board denying the application may request a formal hearing by filing a notice of defense in compliance with AS 44.62.380 within 15 days after the date of the'written notice of the denial, or as provided in 3 AAC 306.085(b) if the applicant requested and participated in an informal conference. Failure to file a notice of defense as provided in this section constitutes a waiver of the right to a formal hearing. (b) When an aggrieved person requests a hearing under the section, the board may 25 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 6 Register 201 COMMERCE, COMMUNITY, AND EC. DEV. request the Office of Administrative Hearings to conduct the hearing in compliance with due Final Adopted Regulations as of 12/1/2015 (c) The nonrefundable fee to request board approval of a change in a licensed marijuana process, the Alaska Administrative Procedure Act, AS 44.62.330 — AS 44.62.630, and the establishment's business name, licensed premises diagram, operating plan, or proposed new applicable regulations adopted by the Office of Administrative Hearings at 2 AAC 64.100 - 2 marijuana product is $250; a change fee does not apply to an application for transfer of a license AAC 64.990. (Efi: _/_ / Register __) to another person. Authority: AS 17.38.010 AS 17.38.087 AS 17.38. 100 (d) The annual license fee, to be paid with each application for a new AS 17.38.070 AS 17.38.090 AS 17.38.900 marijuana establishment facility license and each license renewal application is AS 17.38.084 (1) for a marijuana retailer license, $5000; 3 AAC 306.095. Appeals. (a) An aggrieved applicant or marijuana establishment (2) for a limited marijuana cultivation facility license, $1000; license holder may appeal to the board regarding any action of the director, or an employee or (3) for a marijuana cultivation facility license, $5000; agent of the board regarding an application for a new license, a license renewal, or a transfer of (4) for a marijuana extract only manufacturing facility license, $1000; license to another person. (5) for a marijuana product manufacturing facility license, $5000; (b) An applicant or marijuana establishment license holder aggrieved by a final decision (6) for a marijuana testing facility license, $1000. N of the board regarding an application for a new license, a license renewal, or a transfer of license • (e) The fee for a marijuana handler permit card is $50. to another person may appeal to the superior court under AS 44.62.560. (Efi: / / (f) If the board denies an application for a license or for renewal of a license, the board Register _) will refund the annual license fee. The board will not refund a license fee after the license has Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 been issued. AS 17.38.070 AS 17.38.090 AS 17.38.900 (g) Processing fees for late renewal after failure to pay taxes are as follows: AS 17.38.084 (1) if a licensee pays its delinquent tax after a local government protests renewal 3 AAC 306.100. Fees, refund. (a) The non - refundable application fee for anew of the license, but before the board denies license renewal, $200; marijuana establishment license or an application to transfer a license to another person is $1000. (2) if a licensee pays its delinquent tax after appealing the board's denial (b) The non - refundable application fee for a license renewal application is $600; if a of a license renewal, but before a hearing officer is renewal application is late as provided under 3 AAC 306.035(e), an additional non - refundable appointed to hear the applicant's appeal, $500; (3) if a licensee pays its delinquent tax after appealing the board's denial of a late renewal application fee is $1000. license renewal, but before the administrative hearing begins, $5000; and 26 27 w Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 (4) if a licensee pays its delinquent tax after an administrative hearing that results in a hearing officer recommendation to deny the license renewal, $10,000. (Eff. /_ Register _) Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 Article 2. Local Options. Section 200. Local options 210. Change of local option 220. Removal of local option 230. Procedure for local option election 240. Prohibition of importation or purchase after election 250. Effect on licenses of restriction on sale 260. Notice of the results of a local option election 3 AAC 306.200. Local options. (a) If a majority of the persons voting on the question vote to approve the option, or if a local government's assembly or city council passes an ordinance to the same effect, the local government shall adopt a local option to prohibit (1) the sale or importation for sale of marijuana and any marijuana product; (2) the operation of any marijuana establishment, including one or more of the following license types: (A) a retail marijuana store; (B) a marijuana cultivation facility; 28 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 (C) a marijuana product manufacturing facility; or (D) a marijuana testing facility. (b) A ballot question to adopt a local option under this section must at least contain language substantially similar to: "Shall (name of local government) adopt a local option to prohibit (local option under (a) of this section)? (yes or no)." (c) The ballot for an election on the options set out in (a)(2) of this section must include a brief explanation of the activity that each license type on the ballot may carry out (d) If a local government dissolves under AS 29.06.450, any marijuana establishment license issued to that local government expires when the local government dissolves. (e) A local government may not prohibit the personal use and possession of marijuana and marijuana products as authorized under AS 17.38.020. (f) Nothing in 3 AAC 306.200 — 3 AAC 306.260 precludes a local government from applying for a marijuana establishment license under other provisions of this chapter. (Eff. / / Register_) Authority: AS 17.38.020 AS 17.38.100 AS 17.38.900 AS 17.38.090 AS 1739.110 3 AAC 306.210. Change of local option. If a majority of persons voting on the question vote to approve a local option different from one previously adopted under this section and currently in effect, or if the local government's assembly or city council passes an ordinance to the same effect, the local government shall change the local option to the newly approved option. A ballot question to change a local option under this section must at least contain language substantially similar to: "Shall (name of local government) change the local option currently in effect, that prohibits (current local option), and adopt in its place a local option to 29 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 1211/2015 prohibit (proposed local option)? (yes or no)." (Eff. _/ / Register _) Authority: AS 17.38.020 AS 17.38.100 AS 17.38.900 AS 17.38.090 AS 17.38.110 3 AAC 306.220. Removal of local option. (a) If a majority of the persons voting on the question vote to remove a local option previously adopted under this section and currently in effect, or if a local government's assembly or city council passes an ordinance to the same effect, that local option is repealed effective the first day of the month after the election is certified. A ballot question to remove a local option under this section must at least contain language substantially similar to: "Shall (name of local government) remove the local option currently in effect, that prohibits (current local option), so that no local option continues in effect? (yes or no)." (b) When issuing a license within the boundaries of a local government that has removed A a local option, the board will give priority to any formerly licensed applicant whose license was not renewed because of the results of the previous local option election. However, an applicant described in this subsection does not have a legal right to a license and the board is not required to approve the application. (Eft: /_ /_, Register_) Authority: AS 17.38.020 AS 17.38.100 AS 17.38.900 AS 17.38.090 AS 17.38.110 3 AAC 306.230. Procedure for local option election. When it receives a petition to adopt, change, or remove a local option under 3 AAC 306.200 or 3 AAC 306.220, the local government shall conduct the election in compliance with the initiative process under the local government's election ordinances and regulations and the applicable provisions of AS 29. (Eff. /_, Register Register COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1 /2015 Authority: AS 17.38.020 AS 17.38.100 AS 17.38.900 AS 17.38.090 AS 17.38.110 3 AAC 306.240. Prohibition of importation or purchase after election. (a) If a majority of the voters vote to prohibit the importation for sale of marijuana and any marijuana product under 3 AAC 306.200(a)(3), or if the local government's assembly or city council passes an ordinance to the same effect, a person, beginning on the first day of the month after the results of the election are certified, may not knowingly bring, send, or transport marijuana or marijuana products for sale into the area within the boundary of the local government. (b) A person who resides within the boundary of a local government that has adopted a local option under 3 AAC 306.200(a) may not purchase marijuana or a marijuana product from another person that has brought, sent, or transported marijuana or a marijuana product into the local government for sale in violation of the local option. (c) Notwithstanding (a) or (b) of this section, a licensed marijuana establishment may transport marijuana or any marijuana product through the boundaries of a local government that has prohibited importation or purchase of marijuana if the marijuana or marijuana product is shipped with an attached transport manifest created in compliance with 3 AAC 306.750 and documenting that the shipment originates and terminates in a place that does not prohibit importation and purchase of marijuana or a marijuana product. (d) In this section, (1) "bring' means to carry or convey or to attempt or solicit to carry or convey; (2) "send" means to cause to be taken or distributed or to attempt or solicit or cause to be taken or distributed, and includes use of the United States Postal Service; (3) "transport" means to ship by any method, and includes delivering or 30 31 L44 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 transferring or attempting or soliciting to deliver or transfer marijuana or marijuana products to be shipped to, delivered to, or left or held for pickup by any person. (Eff. Register_) Authority: AS 17.38.020 AS 17.38.100 AS 17.38.900 AS 17.38.090 AS 17.38.110 3 AAC 306.250. Effect on licenses of restriction on sale. If'a majority of the voter; vote under 3 AAC 306.200(a) to prohibit sale of marijuana and marijuana products or the operation of marijuana establishments, or if the assembly or city council passes an ordinance to the same effect, the board may not issue, renew, or transfer to another person, a license for a marijuana establishment with premises located within the boundary of the local government or in the unincorporated area within ten miles of the boundaries of the local government. A license for a marijuana establishment within the boundary of the local government or in the unincorporated area within ten miles of the boundary of the local government is void 90 days after the results of the election are certified. A license that expires during the 90 days after the certification of a local option election may be extended until it is void under this section, by payment of a prorated portion of the annual license fee. (Eff. /_ /_ Register _) Authority: AS 17.38.020 AS 17.38.100 AS 17.38.900 AS 17.38.090 AS 17.38.110 3 AAC 306.260. Notice of the results of a local option election. (a) If a majority of the voters vote to adopt, change, or remove a local option under 3 AAC 306.200 - 3 AAC 306.220 or if the assembly or city council passes an ordinance to the same effect: (1) the clerk of the local government shall notify the board of the results of the election or of the passage of the ordinance immediately after the results of the election are 32 Register, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 certified or the ordinance is formally adopted; (2) the local government shall post public notice of the prohibition in a central location within the boundary of the local government before the date the prohibition becomes effective; and (3) the board shall immediately notify the Department of Law and the Department of Public Safety of the results of the election. (Eff. / / Register Authority: AS 17.38.020 AS 17.38.100 AS 17.38.900 AS 17.38.090 AS 17.3 8.110 Article 3. Retail Marijuana Stores. Section 300. Retail marijuana store license required 305. Retail marijuana store privileges 310. Acts prohibited at retail marijuana store 315. Application for retail marijuana store license 320. Marijuana handler permit required 325. Access restricted at marijuana retail store 330. Marijuana inventory tracking system 335. Health and safety requirements 340. Testing required for marijuana and marijuana products 345. Packaging and labeling 350. Identification requirement to prevent sale to person under 21 355. Limit on quantity sold 33 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 360. Restriction on advertising of marijuana and marijuana products 3 AAC 306.300. Retail marijuana store license required. (a) Except as permitted under AS 17.38.020, a person may not sell, give, distribute, deliver, or offer to sell, give, distribute, or deliver marijuana or any marijuana product to a consumer unless the person has obtained a retail marijuana store license from the board in compliance with this chapter, or is an employee or agent acting for a licensed retail marijuana store operating in compliance with this chapter. A person seeking a retail marijuana store license must (I) submit an application fora retail marijuana store license on a form the board prescribes, including the information set out at 3 AAC 306.020 and 3 AAC 306.315; and (2) demonstrate, to the board's satisfaction, that the applicant will operate in compliance with (A) each applicable provision of 3 AAC 306.300 - 3 AAC 306.360 and 3 AAC 306.700 - 3 AAC 306.755; and (B) each applicable public health, fire, safety, and tax code and ordinance of the state and the local government in which the applicant's proposed licensed premises is located. (b) A licensee of any retail marijuana store, or an employee or agent of a retail marijuana store, may not have an ownership interest in, or a direct or indirect financial interest in any licensed marijuana testing facility. (Eff. /_ /_, Register Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 3 AAC 306.305. Retail marijuana store privileges. (a) A licensed retail marijuana Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 store is authorized to (1) sell marijuana purchased from a licensed marijuana cultivation facility, packaged and labeled as required under 3 AAC 306.345, 3 AAC 306.470, and 3 AAC 306.475 in an amount not exceeding the limit set out in 3 AAC 306.355, to an individual on the licensed premises for consumption off the licensed premises; (2) sell a marijuana product purchased from a licensed marijuana product manufacturing facility, packaged and labeled as required under 3 AAC 306.345, 3 AAC 306.565, and 3 AAC 306.570, in an amount not exceeding the limit set out in 3 AAC 306.355, to an individual on the licensed premises for consumption off the licensed premises; (3) store marijuana and marijuana products on the licensed premises in a manner consistent with 3 AAC 306.710 — 3 AAC 306.720; (4) with prior approval of the board, permit consumption of marijuana or a marijuana product purchased on the licensed premises, in a designated area on the licensed premises. (b) This section does not prohibit a licensed retail store from refusing to sell marijuana or marijuana product to any consumer. (Ef. .. _/ / , Register,_) Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 3 AAC 306.310. Acts prohibited at retail marijuana store. (a) A licensed retail marijuana store may not sell, give, distribute, deliver, or offer to sell, give, distribute, or deliver, marijuana or any marijuana product (1) to any person under the age of 21; 34 35 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/112015 (2) to any person that is under the influence of an alcoholic beverage, inhalant, or controlled substance; (3) that is not labeled and packaged as required in 3 AAC 306.345, and in 3 AAC 306.470 and 3 AAC 306.475 or 3 AAC 306.565 and 3 AAC 306.570; (4) in a quantity exceeding the limit set out in 3 AAC 306.355; (5) over the internet; a licensed retail marijuana store may only sell marijuana or marijuana product to a consumer who is physically present on the licensed premises; (6) after the expiration date shown on the label of the marijuana or marijuana product. (b) A licensed retail marijuana store may not (1) conduct any business on, or allow any consumer to access, the retail marijuana store's licensed premises between the hours of 5:00 a.m. and 8:00 am. each day; (2) allow any person to consume marijuana or any marijuana product on the retail marijuana store's licensed premises, except as provided in paragraph (a)(4) of 3 AAC 306.305; (3) offer or deliver to a consumer, as a marketing promotion or for any other reason: (A) free marijuana or marijuana product, including a sample; or (B) alcoholic beverages, free or for compensation. (Eff. /_ / , Register _) Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 3 AAC 306.315. Application for retail marijuana store license. A person seeking a new retail marijuana store license must submit an application on a form the board prescribes 36 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 including the information required under 3 AAC 306.020, and the following (1) a copy of the food safety permit required under 18 AAC 31.020(a); (2) in the operating plan required under 3 AAC 306.020(c), a description of the way marijuana and marijuana products at the retail store will be displayed and sold. (Eff. / / Register_ Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 3 AAC 306.320. Marijuana handler permit required. A retail marijuana store shall ensure that (1) each licensee, employee, or agent who is required or permitted to be physically present on the licensed premises at any time obtains a marijuana handler permit as provided in 3 AAC 306.700 before being licensed or employed at a retail marijuana store; and (2) each licensee, employee, or agent has that person's marijuana handler permit card in that person's immediate possession, or a valid copy on file on the premises, at all times when on the licensed premises of the retail marijuana store. (Eff. _/ /_ Register Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 3 AAC 306.325. Access restricted at retail marijuana store. (a) A person under the age of 21 may not enter a retail marijuana store. (b) Each entry to a retail marijuana store must be posted with a sign that says "No one under 21 years of age allowed." The sign must be not less than 12 inches long and 12 inches 37 00 Register, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 wide, with letters at least one half inch in height in high contrast to the background of the sign. (c ) An area of a retail marijuana store's licensed premises where marijuana or any marijuana product is stocked for sale, or dispensed for sale, is a restricted access area. The retail marijuana store must post signs, require identification, and escort visitors in compliance with 3 AAC 306.710. (Eff. / / Register__) Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 3 AAC 306.330. Marijuana inventory tracking system. (a) A retail marijuana store shall use an inventory tracking system as provided in 3 AAC 306.730 to ensure all marijuana and marijuana product in the store's possession is identified and tracked from the time the retail marijuana store receives any batch of marijuana or lot of marijuana product through the sale, transfer to another licensed marijuana establishment, or disposal of the batch of marijuana or lot of marijuana product. (b) When any marijuana from a marijuana cultivation facility or marijuana product from • marijuana product manufacturing facility is delivered or transported to the licensed premises of • retail marijuana store, the retail marijuana store shall immediately enter identification information for that batch of marijuana or lot of marijuana product into the retail marijuana store's inventory tracking system. A retail marijuana store may not accept any marijuana or marijuana product that does not have a valid transport manifest generated from the inventory tracking system of the marijuana establishment that originated the delivery. (c) A retail marijuana store shall reconcile each transaction from the store's point of sale system and current inventory to its inventory tracking system at the close of business each day. 38 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 (d) A retail marijuana store shall account for any variance in the quantity of marijuana or marijuana product the store received and the quantity the store sold, transferred, or disposed of (Eff. /_ /_ Register_) Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 3 AAC 306.335. Health and safety requirements. A retail marijuana store must comply with each applicable health and safety requirement set out in 3 AAC 306.735. (Eff. /_, Register _) Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 3 AAC 306.340. Testing required for marijuana and marijuana products. (a) A retail marijuana store may not sell, give, distribute, deliver, or offer to sell, give, distribute, or deliver, marijuana or any marijuana product until all laboratory testing required under 3 AAC 306.645 has been completed, and the label required under 3 AAC 306.475 or 3 AAC 306.570 is affixed. (Eff. / /_, Register_) Authority: AS 17.38.010 AS 17.38.087 AS 17.38. 100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 3 AAC 306.345. Packaging and labeling. (a) A retail marijuana store shall assure that (1) any marijuana sold on its licensed premises is packaged and labeled in compliance with 3 AAC 306.470 and 3 AAC 306.475, except that 3 AAC 306.470(b)(2) does not 39 Register 2016 COMMERCE, COMMUNITY, ARID EC. DEV. Final Adopted Regulations as of 12/1/2015 apply to the packaging of wholesale flower and bud sold by weight to a consumer, and (2) any marijuana product sold on its licensed premises is packaged and labeled in compliance with 3 AAC 306.565 and 3 AAC 306.570, except that 3 AAC 306.565(b)(2) does not apply to the packaging of wholesale marijuana products that are not edible marijuana products; (3) any marijuana or marijuana product sold at a retail marijuana store must be packaged in opaque, re- sealable, child- resistant packaging when the purchaser leaves the retail premises; the packaging must be designed or constructed to be significantly difficult for children under five years of age to open; but not normally difficult for adults to use properly. (b) In addition to labeling requirements provided in (a) of this section, a retail marijuana store shall affix a label to each package of marijuana or marijuana product that (1) identifies the marijuana retail store selling the marijuana product by name or distinctive logo and marijuana establishment license number; and (2) states the total estimated amount ofTHC in the labeled product, and (3) contains the following statements: (A) "Marijuana has intoxicating effects and may be habit forming and addictive;" (B) "Marijuana impairs concentration, coordination, and judgment. Do not operate a vehicle or machinery under its influence;" (C) "There are health risks associated with consumption of marijuana" (D) "For use only by adults twenty-one and older. Keep out of the reach of children;" and (E) "Marijuana should not be used by women who are pregnant or breast feeding;" (Eff. _/_ /_, Register _) 40 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 3 AAC 306.350. Identification requirement to prevent sale to person under 21. (a) A licensed retail marijuana store shall refuse to sell marijuana or a marijuana product to any person who does not produce a form of valid photo identification showing that person is 21 years of age or older. (b) A valid form of identification includes: (1) an unexpired, unaltered passport; (2) an unexpired, unaltered driver's license; instruction permit, or identification card of any state or territory of the United States, the District of Columbia, or a province of Canada; (3) an identification card issued by a federal or state agency authorized to issue a driver's license or identification card. (Eff. /_ /_, Register _) Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 3 AAC 306.355. Limit on quantity sold. (a) A licensed retail marijuana store shall not sell more than the following quantity of marijuana or marijuana product in a single transaction: (1) one ounce ofuseable marijuana; (2) seven grams of marijuana concentrate for inhalation, or (3) marijuana or marijuana products containing more than 5600 Milligrams of THC. (Eff. /_ / Register 41 0 0 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 3 AAC 306.360. Restriction on advertising of marijuana and marijuana products. (a) A retail marijuana store may have no more than three signs, visible to the general public from the public right of way, that identify the store by its business name. A sign may be placed in the store's window or attached to the outside of the licensed premises. The size of each sign may not exceed 4800 square inches. (b) An advertisement for marijuana or marijuana product may not contain any statement or illustration that (1) is false or misleading; (2) promotes excessive consumption; (3) represents that the use of marijuana has curative or therapeutic effects; (4) depicts a person under the age of 21 consuming marijuana; or (5) includes an object or character, including a toy, a cartoon character, or any other depiction designed to appeal to a child or other person under the age of 21, that promotes consumption of marijuana. (c) A retail marijuana store may not place an advertisement for marijuana or a marijuana product, except as provided in (a) of this section, (1) within one thousand feet of the perimeter of any child - centered facility, including a school, childcare facility or other facility providing services to children, a playground or recreation center, a public park, a library, or a game arcade that is open to persons under the age of 21; 42 Register_, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 (2) on or in a public transit vehicle or public transit shelter, or (3) on or in a publicly owned or operated property; (4) within 1000 feet of a substance abuse or treatment facility; or (5) on a campus for post- secondary education. (d) A retail marijuana store may not use giveaway coupons as promotional materials, or conduct promotional activities such as games or competitions to encourage sale of marijuana or marijuana products. (e) All advertising for marijuana or any marijuana product must contain the following warnings: (A) "Marijuana has intoxicating effects and may be habit forming and addictive;" (B) "Marijuana impairs concentration, coordination, and judgment. Do not operate a vehicle or machinery under its influence;" (C) "There are health risks associated with consumption of marijuana" (D) "For use only by adults twenty -one and older. Keep out of the reach of children;" and (E) "Marijuana should not be used by women who are pregnant or breast feeding." (Eff. / / , Register _J Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 Section Article 4. Marijuana Cultivation Facilities. 43 0 Register r. 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 400. Marijuana cultivation facility license required 405. Standard marijuana cultivation facility: privileges and prohibited acts 410. Limited marijuana cultivation facility: privileges and prohibited acts 420. Application for marijuana cultivation facility license 425. Marijuana handler permit required 430. Restricted access area 435. Marijuana inventory tracking system 440. Health and safety requirements 445. Standards for cultivation and preparation 450. Production of marijuana concentrate prohibited 455. Required laboratory testing 460. Samples 465. Random sampling 470. Packaging of marijuana 475. Labeling of marijuana 480. Marijuana tax to be paid 3 AAC 306.400. Marijuana cultivation facility license required. (a) Except as provided under AS 17.38.020, a person may not plant, propagate, cultivate, harvest, trim, dry, cure, package, or label marijuana grown at a place under that person's control, or sell marijuana grown at a place under that person's control to any marijuana establishment unless the person has obtained a marijuana cultivation facility license from the board in compliance with this chapter, or is an employee or agent acting for a licensed marijuana cultivation facility. The board will issue the following types of marijuana cultivation facility licenses, with the privileges 44 Register. 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 and subject to the prohibitions set out in sections 3 AAC 306.405 - 3 AAC 306.410: (1) a standard marijuana cultivation facility license; (2) a limited marijuana cultivation facility license to a person operating a marijuana cultivation facility with fewer than 500 square feet under cultivation. (b) A person seeking a standard or limited marijuana cultivation facility license as provided in (a) of this section must (1) submit an application for the applicable marijuana cultivation facility license on a form the board prescribes, including the information set out at 3 AAC 306.020 and 3 AAC 306.420; and (2) demonstrate to the board's satisfaction that it will operate in compliance with (A) each applicable provision of 3 AAC 306.400 - 3 AAC 306.480 and 3 AAC 306.700 - 3 AAC 306.755; and (B) each applicable public health, fire, safety, and tax code and ordinance of the state and the local government in which the applicant's proposed licensed premises are located. (c) A licensee of any marijuana cultivation facility, or an employee or agent of a marijuana cultivation facility, may not have an ownership interest in, or a direct or indirect financial interest in any licensed marijuana testing facility. (Eff. /_ / Register--) Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.030 AS 17.38.090 AS 17.38.900 AS 17.38.070 3 AAC 306.405. Standard marijuana cultivation facility: privileges and prohibited acts. (a) A licensed standard marijuana cultivation facility is authorized to 45 0 N Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 (1) propagate, cultivate, harvest, prepare, cure, package, store and label marijuana; (2) sell marijuana only to a licensed retail marijuana store, to another licensed marijuana cultivation facility, or to a licensed marijuana product manufacturing facility; (3) provide samples to a licensed marijuana testing lab for testing; (4) store inventory on the licensed premises; any stored inventory must be secured in a restricted access area and accounted for in the marijuana cultivation facility's inventory tracking system as required under 3 AAC 306.730;. (5) transport marijuana in compliance with 3 AAC 306.750; (6) conduct in -house testing for the marijuana cultivation facility's own use; (7) provide marijuana samples to a licensed retail marijuana store or marijuana product manufacturing facility for the purpose of negotiating a sale. (b) A licensed standard marijuana cultivation facility may also apply for a marijuana product manufacturing facility license and a retail marijuana store license. A standard marijuana cultivation facility that obtains any other marijuana establishment license shall (1) conduct any product manufacturing or retail marijuana store operation in a room completely separated from the cultivation facility by a secure door when co- located; and (2) comply with each provision of this chapter that applies to any other type of marijuana establishment license that the standard marijuana cultivation facility licensee obtains. (c) A licensed standard marijuana cultivation facility may not (1) sell, distribute, or transfer any marijuana or marijuana product to a consumer, with or without compensation; (2) allow any person, including a licensee, employee, or agent, to consume 46 Register, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 marijuana or a marijuana product on the licensed premises or within 20 feet of the exterior of any building or outdoor cultivation facility on the licensed premises; (3) treat or otherwise adulterate marijuana with any organic or nonorganic chemical or other compound to alter the color, appearance, weight, or odor of the marijuana; (4) except as permitted under a marijuana product manufacturing facility license, extract marijuana concentrate, using any process described in 3AAC 306.555, at the licensed premises; (5) sell marijuana that is not packaged and labeled in compliance with 3 AAC 306.470 and 3 AAC 306.475. (Eff. /_ /_, Register __) Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.410. Limited marijuana cultivation facility: privileges and prohibited acts. A licensed limited cultivation facility (1) has the privileges set out in 3 AAC 305.405(a) and (b), except that it must have fewer than 500 square feet under cultivation; and (2) is subject to each prohibition set out in 3 AAC 306.405(c). (Eff. / /_, Register _) Authority: AS 17.38.010 AS 17.38.090 AS 43.61.010 AS 17.38.070 AS 17.38.100 AS 43.61.020 AS 17.38.084 AS 17.38.900 3 AAC 306.420. Application for marijuana cultivation facility license. (a) An applicant for a new standard marijuana cultivation facility license or a new limited marijuana 47 0 w Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 cultivation facility shall file an application on a form the board prescribes, including (1) the information required under 3 AAC 306.020; and (2) the proposed marijuana cultivation facility's operating plan, including, in addition to the information required under 3 AAC 306.020(c): (A) the size of the space intended to be under cultivation; (B) the growing medium to be used; (C) fertilizers, chemicals, gases, and delivery systems, including CO2 management, to be used; (D) the irrigation and waste water systems to be used; (E) waste disposal arrangements; (F) odor control; and (G) the testing procedure and protocols the marijuana cultivation facility will follow. (b) An applicant for a limited marijuana cultivation facility license must submit the information required for a new marijuana establishment license set out in 3 AAC 306.020, and (a)(2) of this section. (Eff. / / Register Authority: AS 17.38.010 AS 17.38.084 AS 1239.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 Editor's note: The form for an application for a marijuana cultivation facility license is available online as provided in the editor's note under 3 AAC 306.020. 3 AAC 306.425. Marijuana handler permit required. A marijuana cultivation facility must ensure that each licensee, employee, or agent who is required or permitted to be physically present on the licensed premises at any time (1) obtains a marijuana handler permit as provided in 3 AAC 306.700 before 48 Register. 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 being present or employed at the marijuana cultivation facility's licensed premises; and (2) has the marijuana handler permit card in the person's immediate possession, or a valid copy on file on the premises, at all times while on the marijuana cultivation facility's licensed premises. (Eff. / / Register_ Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.430. Restricted access area. (a) A marijuana cultivation facility shall conduct any operation in a restricted area in compliance with 3 AAC 306.710 and this section (b) A marijuana cultivation facility shall conduct any marijuana growing operation within a fully enclosed secure indoor facility or greenhouse with rigid walls, a roof, and doors. Where not prohibited by local government, outdoor production may take place in non -rigid greenhouses, other structures, or an expanse of open or cleared ground fully enclosed by a physical barrier. To obscure public view of the premises, outdoor production must be enclosed by a sight obscuring wall or fence at least six feet high. (c) A marijuana cultivation facility shall ensure that any marijuana at the cultivation facility (1) cannot be observed by the public from outside the cultivation facility; and (2) does not emit an odor that is detectable by the public from outside the cultivation facility except as allowed by a local government conditional use permit process. (d) A marijuana cultivation facility shall have full video surveillance of the licensed premises as required under 3 AAC 306.720, including any area where marijuana is grown, processed, packaged, or stored, or where marijuana waste is destroyed (Eli. Register __) 49 0 A Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.435. Marijuana inventory tracking system. (a) A marijuana cultivation facility shall use an inventory tracking system in compliance with 3 AAC 306.730 to ensure all marijuana propagated, grown, or cultivated on the marijuana cultivation facility's premises is identified and tracked from the time the marijuana is propagated through transfer to another licensed marijuana establishment or destruction. The marijuana cultivation facility must assign a tracking number to each plant over 8 inches tall. When harvested, bud and flowers, clones or cuttings, or leaves and trim may be combined in harvest batches of distinct strains, not exceeding five pounds; each harvest batch must be given an inventory tracking number. Clones or cuttings must be limited to 50 or fewer plants and identified by a batch tracking number. (b) A marijuana cultivation facility shall record each sale and transport of each batch in its marijuana inventory tracking system, and shall generate a valid transport manifest to accompany each transported batch. (c) A marijuana cultivation facility shall record in its marijuana inventory tracking system all marijuana used to provide a sample authorized under 3 AAC 306.460 for the purpose of negotiating sales, including (1) the amount of each sample; (2) the retail marijuana store or marijuana product manufacturing facility that received the sample; and (3) the disposal of any expired or outdated promotional sample returned to the marijuana cultivation facility. (Eff. /_ / Register _) Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 50 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.440. Health and safety requirements. (a) A marijuana cultivation facility must comply with all applicable health and safety requirements set out in 3 AAC 306.735, and the additional requirements set out in this section. (b) A marijuana cultivation facility shall ensure that any licensee, employee, or agent who is present at the marijuana cultivation facility and in contact with any marijuana (1) wears clean clothing appropriate for the duties that person performs; (2) wears protective apparel, such as head, face, hand and arm coverings, as necessary to protect marijuana from contamination; and (3) practices good sanitation and health habits. (Eff. /_ / Register Authority: AS 17.38.010 AS 17.38.084 AS 17.38. 100 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.445. Standards for cultivation and preparation. A marijuana cultivation facility shall use certified scales in compliance with AS 45.75.080 and 3 AAC 306.745. (Eff. _/ / , Register __) Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.450. Production of marijuana concentrate prohibited. A marijuana cultivation facility may not produce or possess marijuana concentrate that was extracted using any process described in 3 AAC 306.455 on its licensed premises unless the marijuana cultivation facility also has a marijuana product manufacturing facility license. Any extraction or production of marijuana concentrate on the premises of a licensed marijuana cultivation 51 0 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/112015 facility must (1) be in a separate room that (A) is physically separated by a secure door from any cultivation area; and (B) has a sign that clearly identifies the room as a marijuana concentrate production area, and wams unauthorized persons to stay out; and (2) comply with all applicable provisions of 3 AAC 306.500 - 3 AAC 306.570. (Eff. /_ / Register__) Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.455. Required laboratory testing. (a) Except as provided in (d) of this section, a marijuana cultivation facility shall provide a sample of each harvest batch of marijuana produced at the facility to a marijuana testing facility, and may not sell or transport any marijuana until all laboratory testing required by 3 AAC 306.645 has been completed. (b) To comply with (a) of this section, a marijuana cultivation facility shall (1) collect a random, homogenous sample for testing by segregating harvested marijuana into batches of individual strains of bud and flower, then selecting a random sample from each batch in an amount required by the marijuana testing facility; (2) designate an individual responsible for collecting each sample; that individual shall (A) prepare a signed statement Showing that each sample has been randomly selected for testing; (B) provide the signed statement to the marijuana testing facility; and 52 Register_, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 (C) maintain a copy as a business record under 3 AAC 306.755; (3) transport the sample to the marijuana testing facility's licensed premises in compliance with 3 AAC 306.750. (c) A marijuana cultivation facility shall segregate the entire batch from which the testing sample was selected until the marijuana testing facility reports the results from its tests. During this period of segregation, the marijuana cultivation facility that provided the sample shall maintain the batch in a secure, cool, and dry location to prevent the marijuana from becoming contaminated or losing its efficacy. The facility that provided the sample may not sell or transport any marijuana from the segregated batch until the marijuana testing facility has completed its testing and provided those results, in writing, to the marijuana cultivation facility that provided the sample. The marijuana cultivation facility shall maintain the testing results as part of its business books and records. (d) When geographic location and transportation limitations make it unfeasible for a manufacturing facility to transport testing samples to a lab, an applicant for licensure may propose alternative means of testing to meet the requirements of this code. (Eti: Register Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.460. Samples. (a) A marijuana cultivation facility may provide a free sample of marijuana to a retail marijuana store if packaged in A sample jar containing no more than 3 1/2 grams of marijuana and protected by a plastic or metal mesh screen to allow customers to smell the product before purchase. (b) A marijuana cultivation facility may provide a free sample of marijuana to a retail 53 0 a Register r, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 marijuana store or marijuana product manufacturing facility as follows: one ounce; (1) a sample provided for the purpose of negotiating a sale may be no more than (2) a marijuana cultivation facility may not provide any one licensed retail marijuana store or marijuana product manufacturing facility with more than one ounce of marijuana per month free of charge for the purpose of negotiating a sale. (c) A retail marijuana store that receives a marijuana sample may not sell the marijuana sample to a customer, and shall either sample; or (1) return the marijuana sample to the cultivation facility that provided the (2) destroy the marijuana sample after use and document the destruction in its marijuana inventory control system. (Eff. _/ / , Register_, Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.465. Random sampling. (a) The board or the director will from time to time require a standard or limited marijuana cultivation facility to provide samples of the growing medium, soil amendments, fertilizers, crop production aids, pesticides, or water for random compliance checks. The sample may be screened for pesticides and chemical residues, unsafe levels of metals, and used for other laboratory tests the director finds to be in the interests of the public. The marijuana cultivation facility shall bear all posts of testing under this subsection. (b) When the board or the director orders random sampling under this section, the director will identify a licensed marijuana testing facility to perform the testing. The marijuana 54 Register ­2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 testing facility will collect the test samples; the marijuana cultivation facility shall cooperate to facilitate the collection of samples. (Eff. / / Register_--) Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.470. Packaging of marijuana. (a) A licensed marijuana cultivation facility shall package its marijuana bud and flower for sale as follows: (1) to a retail marijuana store, either (A) in a package not exceeding one ounce for resale to consumers without additional handling by the retail marijuana store except to add the retail marijuana store's own identifying name or logo and license number, or (B) in a wholesale package not exceeding five pounds for re - packaging by the retail marijuana store; or (2) to a marijuana product manufacturing facility in a wholesale package not exceeding five pounds, consisting of a single strain or a mixture of strains as identified on the label. (b) When a licensed marijuana cultivation facility packages marijuana for a retail marijuana store to sell to a consumer without re- packaging, the packaging may not have any printed images, including cartoon characters, that specifically target individuals under the age of 21. In addition, the packaging must protect the product from contamination and must not impart any toxic or damaging substance to the marijuana; (c) Each package prepared in compliance with this section must be identified by a tracking label generated for tracking by the marijuana cultivation facility's marijuana inventory control system. 55 0 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 (d) A marijuana cultivation facility shall prepare marijuana for transport or transfer to another marijuana establishment by (1) placing marijuana packaged in compliance with (a) - (c) ofthis section within a sealed, tamper- evident shipping container; (2) affixing a label in compliance with 3 AAC 306.475 to the shipping container; and (3) generating a transport manifest from the marijuana cultivation facility's marijuana inventory system; the transport manifest must remain with the marijuana at all times while being transported, and a copy must be given to the licensed marijuana establishment that receives the shipment. (Eff. / / Register__) Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.475. Labeling of marijuana. (a) When a licensed marijuana cultivation facility packages marijuana for a retail marijuana store to sell to a consumer without re- packaging, the marijuana cultivation facility shall affix a label to each package of marijuana or marijuana product that contains the following statements: (A) "Marijuana has intoxicating effects and may be habit forming and addictive;" (B) "Marijuana impairs concentration, coordination, and judgment Do not operate a vehicle or machinery under its influence;" (C) "There are health risks associated with consumption of marijuana;" and (D) "For use only by adults twenty-one and older. Keep out ofthe reach of children" (E) "Marijuana should not be used by women who are pregnant or breast 56 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 11/1/2015 feeding." (b) With each harvest batch of marijuana sold, a marijuana cultivation facility must disclose in writing (1) each soil amendment, fertilizer, and other crop production aid applied to the growing medium or marijuana plant included in the batch, including any pesticide, herbicide, or fungicide that was used; and (2) the name ofthe licensed marijuana testing facility that performed any required laboratory test and the results of each required laboratory test. (c) A marijuana cultivation facility may not label marijuana as organic. (d) A marijuana cultivation facility shall affix a label containing the following information to each package of marijuana sold to another marijuana establishment (1) the name and license number ofthe marijuana cultivation facility where the marijuana was grown; (2) the harvest batch number assigned to the marijuana in the package; (3) the net weight ofthe marijuana in the package, not including weight ofthe shipping container, using a standard of measure compatible with the inventory tracking system; and (4) a complete list of all pesticides, fungicides, and herbicides used in cultivation ofthe marijuana. (e) If a marijuana cultivation facility transports wholesale marijuana to another marijuana establishment for sale at retail or for use in manufacturing a marijuana product, then a label must be affixed to the shipping container showing that a licensed marijuana testing facility has tested each harvest batch in the shipment as provided in 3 AAC 306.645. The label must 57 0 co Register, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 report the test results, including the following information: (1) a cannabinoid potency profile expressed as a range of percentages that extends from the lowest percentage to highest percentage of concentration for each cannabinoid listed from every test conducted on that strain of marijuana from the same marijuana cultivation facility within the last three months; (2) a statement listing the results of microbial testing required by 3 AAC 306.645(b)(2); (3) a statement listing the results of residual solvent testing required by 3 AAC 306.645(6)(3), if applicable; (4) a statement listing any of the following contaminants for which the product was tested: (A) molds, mildew and filth, in addition to the testing required by 3 AAC 306.645(b)(2); (B) herbicides, pesticides, and fungicides; and (C) harmful chemicals. (f) If a marijuana cultivation facility ships wholesale marijuana from a harvest batch that has not been tested for each contaminant listed in (e)(4) of this section, the label for that batch must include a statement identifying each contaminant listed in (e)(4) of this section for which that harvest batch has not been tested. (Eff. _/ L­ Register__) Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.480. Marijuana tax to be paid. (a) A marijuana cultivation establishment, including a standard marijuana cultivation facility and a limited marijuana cultivation facility 58 Register, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 shall submit monthly reports to the Department of Revenue and pay the excise tax required under AS 43.61.0 10 and AS 43.61.020 on all marijuana sold, or provided as a sample to any marijuana establishment. (Eff. _/_ / Register__) Authority: AS 17.38.010 AS 17.38.084 AS 17.38.900 AS 17.38.030 AS 17.38.090 AS 43.61.010 AS 17.38.070 AS 17.38.100 AS 43.61.020 Article 5. Marijuana Product Manufacturing Facilities. Section 500. Marijuana product manufacturing facility license required 505. Marijuana product manufacturing facility privileges 510. Acts prohibited at marijuana product manufacturing facility 515. Marijuana concentrate manufacturing facility license 520. Application for marijuana product manufacturing facility license 525. Approval of concentrates and marijuana products 530. Marijuana handler permit and food safety worker training 535. Restricted access and storage areas 540. Marijuana inventory tracking system 545. Health and safety standards 550. Required laboratory testing 555. Production of marijuana concentrate 560. Potency limits per serving and transaction for edible marijuana products 565. Packaging of marijuana products 59 r 0 e Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 570. Labeling of marijuana products 3 AAC 306.500. Marijuana product manufacturing facility license required. (a) A person may not extract marijuana concentrate for sale, or formulate or manufacture any marijuana product for sale unless that person has obtained a marijuana product manufacturing facility license from the board in compliance with this chapter, or is an employee or agent acting for a licensed marijuana product manufacturing facility. The board will issue (1) a standard marijuana product manufacturing facility license; and (2) a marijuana concentrate manufacturing facility license. (b) A person seeking any type of marijuana product manufacturing facility license must (1) submit an application for a marijuana product manufacturing facility license on a form the board prescribes, including the information set out at 3 AAC 306.020 and 3 AAC 306.520; and (2) demonstrate to the board's satisfaction that it will operate in compliance with (A) each applicable provision of 3 AAC 306.500 - 3 AAC 306.570 and 3 AAC 306 -700 - 3 AAC 306.755; and (B) each applicable public health, fire, safety, and tax code and ordinance of the state and the local government in which the applicant's proposed licensed premises are located. (c) A licensee of any marijuana product manufacturing facility, or an employee or agent of a marijuana product manufacturing facility, may not have an ownership interest in, or a direct or indirect financial interest in any licensed marijuana testing facility. (Ef . / /_, Register _) Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 60 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.505. Marijuana product manufacturing facility privileges. (a) Except as provided in 3 AAC 306.515, a licensed marijuana product manufacturing facility, including a marijuana concentrate manufacturing facility, is authorized to (1) purchase marijuana from a marijuana cultivation facility or from another marijuana product manufacturing facility; (2) extract marijuana concentrate in compliance with 3 AAC 306.555; (3) manufacture, refine, process, cook, package, label, and store marijuana products approved under 3 AAC 306.525, including (A) marijuana concentrate; or (B) any product intended for consumption or use on the body that is comprised of marijuana and other ingredients, including edible products, ointments, salves, patches, or tinctures; (4) sell, distribute, or deliver marijuana extract or any marijuana product only to a licensed retail marijuana store or to another licensed marijuana product manufacturing facility; (5) provide and transport samples of marijuana concentrate or other marijuana product to a certified marijuana testing lab for testing; (6) provide a sample of marijuana concentrate or a marijuana product approved under 3 AAC 306.525 to a licensed retail marijuana store for the purpose of negotiating a sale; (7) store inventory in a restricted access area on the licensed premises as provided in 3 AAC 306.535; and (8) transport marijuana in compliance with 3 AAC 306.750; or (9) conduct in -house testing for the marijuana product manufacturing facility's 61 0 Register . 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 own use. (Efi / /—Register Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.510. Acts prohibited at marijuana product manufacturing facility. (a) A licensed marijuana product manufacturing facility, including a licensed marijuana concentrate manufacturing facility, may not (1) sell, deliver, distribute, or transfer marijuana, marijuana concentrate, or a marijuana product directly to a consumer, with or without compensation; (2) sell marijuana, marijuana concentrate, or a marijuana product that is not manufactured, packaged, and labeled in compliance with 3 AAC 306.500 — 3 AAC 306.570; (3) allow any person, including a licensee, employee, or agent, to consume marijuana, marijuana concentrate, or a marijuana product on its licensed premises; (4) manufacture or sell any product that (A) is an adulterated food or drink; (B) closely resembles any familiar food or drink item including candy; or (C) is packaged to look like candy, or in bright colors or with cartoon characters or other pictures or images that would appeal to children. (b) in this section, "closely resemble" or "look like' means the product or its packaging has a shape, color, markings, or decorative patterns that are familiar to the public from a widely distributed branded food product, so that the marijuana product could reasonably be mistaken for that branded product, especially by children. (c) A marijuana product manufacturing facility may not accept any marijuana from a marijuana cultivation facility or another marijuana product manufacturing facility unless 62 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 (1) all marijuana in the shipment is properly identified with a label generated in the marijuana inventory tracking system of the facility that provided the marijuana; and (2) a valid transport manifest showing the source and destination of the marijuana is attached to the shipment Efi /_ /_, Register __) Authority: AS 17.38.010 AS 17.38.090 AS 17.38.900 AS 17.38.070 AS 17.38.100 AS 43.61.010 AS 17.38.084 3 AAC 306.515. Marijuana concentrate manufacturing facility license. A licensed marijuana concentrate manufacturing facility has the privileges set out in 3 AAC 306.505, except that it may not (1) manufacture, refine, process, cook, package, label or store any marijuana product other than marijuana concentrate; (2) sell, distribute, or deliver any marijuana product other than marijuana concentrate to a retail marijuana store or to another marijuana product manufacturing facility; (3) provide and transport a sample of any marijuana product other than marijuana concentrate to a licensed marijuana testing lab for testing; or (4) provide samples of any product other than marijuana concentrate to a licensed retail marijuana store for purposes of negotiating a sale. (Efi / /_, Register —, Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 - AS 17.38.090 AS 17.38.900 3 AAC 306.520. Application for marijuana product manufacturing facility license. An applicant for a marijuana product manufacturing facility license, including a marijuana concentrate manufacturing facility, must file an application on a form the board prescribes, and 63 r+ r-+ Register r, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 1211/2015 provide the information required under 3 AAC 306.020 and the following: (1) a copy of a food safety permit if required under 18 AAC 31.020 from the Department of Environmental Conservation or a municipality with authority delegated under AS 17.20.072 and 18 AAC 31.945; (2) a diagram of the proposed licensed premises required in 3 AAC 306.020(b), identifying the area where (A) in -house testing, if any, will occur, and (B) marijuana and any marijuana product, including marijuana concentrate, will be stored; (3) in the applicant's operating plan required under 3 AAC 306.020(c), a description of (A) the equipment and solvents, gases, chemicals, and other compounds used to create concentrates and the processes to be used; (B) each marijuana product the applicant intends to process at this location; the product description must include the color, shape, texture, ingredients and standard production procedure to be used and the additional information required for product approval in 3 AAC 306.525; (C) the packaging to be used for each type of product; and (D) sample labels showing how the labeling information required in 3 AAC 306.570 will be set out; and (E) the applicant's plan for disposal of waste. (Eff. Register _) 64 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 Editor's note: The form for an application for a marijuana product manufacturing facility license or a marijuana concentrate manufacturing license is available online as provided in the editor's note under 3 AAC 306.020. 3 AAC 306.525. Approval of concentrates and marijuana products. (a) A marijuana product manufacturing facility, including a marijuana concentrate manufacturing facility, must obtain the board's approval for each product it will manufacture for sale or transfer to another licensed marijuana establishment The board will not approve any product that is prohibited under 3 AAC 306.5 1 0(a)(4). (b) An applicant for a marijuana product manufacturing facility license may request the board's approval of its intended products with a new license application by including, in its operating plan (1) a photograph, drawing, or graphic representation of the expected appearance of each final product; and (2) the proposed standard production procedure and detailed manufacturing process for each product (c) A licensed marijuana product manufacturing facility may at any time submit a new product approval request to the board on a form the board prescribes along with a fee of $250. (d) A licensed marijuana product manufacturing facility shall keep its ingredient list and potency limits for any food product containing marijuana on file at the marijuana product manufacturing facility's licensed premises. The ingredient list and potency limits for any product manufactured at the facility must be made available for inspection on request by the director, or an employee or agent of the board. (Eff. / /_, Register---_) 65 N Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.530. Marijuana handler permit and food safety worker training. (a) A marijuana product manufacturing facility including a licensed marijuana concentrate manufacturer facility shall ensure that each licensee, employee, or agent who is required or permitted to be physically present on the licensed premises at any time (1) obtains a marijuana handler permit as provided in 3 AAC 306.700 before being present or employed at the marijuana product manufacturing facility's licensed premises; and (2) has the marijuana handler permit card in the person's immediate possession, or a valid copy on file on the premises, at all times while on the marijuana product manufacturing facility's licensed premises. (b) A licensee, employee, or agent of a licensed marijuana product manufacturing facility who handles marijuana at the facility shall obtain a food safety worker card in compliance with AS 18.31.330, and keep that card in that person's possession at all times while on the licensed premises of the marijuana product manufacturing facility. (Eff. / / , Register _) Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 173R Mn A c to no nnn 3 AAC 306.535. Restricted access and storage areas. (a) A marijuana product manufacturing facility shall conduct any extraction or product manufacturing operation in a restricted area in compliance with 3 AAC 306.710. (b) A marijuana product manufacturing facility shall have full video surveillance of the 66 Register. 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 licensed premises as provided in 3 AAC 306.720, including any area where (1) marijuana concentrate is produced; (2) any operation involved in manufacturing any product containing marijuana occurs, (3) marijuana or a marijuana product is stored or stockpiled; or (4) marijuana waste is destroyed. (c) Any area where marijuana or a marijuana product is stored must be moisture and temperature controlled and protected from pests and vermin. (Eff. _/ / Register Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.540. Marijuana inventory tracking system. (a) A marijuana product manufacturing facility shall use a marijuana inventory tracking system as provided in 3 AAC 306.730 to ensure that the marijuana product manufacturing facility identifies and tracks any marijuana or marijuana product from the time the marijuana or marijuana product is received, through (1) use of the marijuana or marijuana product in manufacturing any other marijuana product; (2) sale or transfer of the marijuana or marijuana product originally received, or any marijuana product manufactured at that marijuana product manufacturing facility to another licensed marijuana establishment; and (3) disposal of any expired or outdated marijuana or marijuana product that is not sold or transferred to another licensed marijuana establishment. 67 w Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/112015 (b) When marijuana from a marijuana cultivation facility or marijuana product from another marijuana product manufacturing facility is delivered or transported to the licensed premises of a marijuana product manufacturing facility, the marijuana product manufacturing facility shall immediately enter tracking information for that marijuana or marijuana product into the inventory tracking system. A marijuana product manufacturing facility may not accept any marijuana or marijuana product that does not have a valid transport manifest generated from the marijuana inventory tracking system of the licensed marijuana establishment that supplies the marijuana or marijuana product. (c) A marijuana product manufacturing facility shall track any received marijuana or marijuana product to its use in a marijuana product, and shall reconcile each transaction to its inventory tracking system at the close of business each day. (d) A marijuana product manufacturing facility shall account for any variance in the quantity of marijuana or marijuana product the facility received, and the quantity the facility sold, transferred, or disposed of. (Efi / / Register Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.545. Health and safety standards. (a) A marijuana product manufacturing facility shall comply with the health and safety standards set out in 3 AAC 306.735, the Alaska Food Safety Code, 18 AAC 31, if applicable, and any local kitchen - related health and safety standards for retail food establishments. (b) In addition to inspection by the director or an employee or agent of the board, a marijuana product manufacturing facility is subject to inspection by local safety officials, including a local fire department, building inspector, or code enforcement officer. (Eff. /_ 68 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 Register_, Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.550. Required laboratory testing. (a) A marijuana product manufacturing facility shall provide a sample of each marijuana product manufactured at the facility to a licensed marijuana testing facility, and may not sell or transport any marijuana product until all laboratory testing required by 3 AAC 306.645 has been completed. (b) To comply with (a) of this section, a marijuana product manufacturing facility shall (1) collect a random sample for testing by selecting a product from each production lot in an amount required by the marijuana testing facility; (2) designate an individual responsible for collecting each sample; that individual shall (A) prepare a signed statement showing that each sample has been randomly selected for testing; (B) provide the signed statement to the marijuana testing facility; and (C) maintain a copy as a business record under 3 AAC 306.755, and (3) transport the sample to the marijuana testing facility in compliance with 3 AAC 306.750. (c) After collecting and transporting a sample for testing, a marijuana product manufacturing facility shall segregate the entire production lot from which the testing sample was selected until the marijuana testing facility reports the results from its tests. During this period of segregation, the marijuana product manufacturing facility that provided the sample shall maintain the production lot in a secure, cool, and dry location to prevent the marijuana 69 A Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 product from becoming contaminated or losing its efficacy. The marijuana product manufacturing facility may not sell or transport any marijuana product from the segregated lot until the marijuana testing facility has completed its testing and analysis and provided those results, in writing, to the marijuana product manufacturing facility that provided the sample. The marijuana product manufacturing facility shall maintain the testing results as part of its business records. (e) When geographic location and transportation limitations make it unfeasible for a manufacturing facility to transport testing samples to a lab, an applicant for licensure may propose alternative means of testing to meet the requirements of this code. (Eff. Register _) Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.555. Production of marijuana concentrate. (a) Before producing any marijuana concentrate for sale, a marijuana product manufacturing facility shall develop standard operating procedures, good manufacturing practices, a safety plan, and a training plan for each individual employed in an extraction process. (b) A marijuana product manufacturing facility may create marijuana concentrates only as follows: (1) water -based marijuana concentrate may be produced by extracting cannabinoids from marijuana by. using only water, ice or dry ice; (2) food -based marijuana concentrate may be produced by extracting cannabinoids from marijuana through the use of propylene glycol, glycerin, butter, olive oil, or other typical cooking fats; infused dairy butter and oils or fats derived from natural sources may 70 Register, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 1211/2015 be used to prepare infused edible products, but may not be prepared as stand -alone edible Products for sale; (3) solvent -based marijuana concentrate may be produced using the hydrocarbons N- butane, isobutane, propane, or heptane or other solvents or gases the board approves that exhibit low to minimal potential human health - related toxicity; approved solvents must be of at least ninety-nine percent purity and must be used (A) in a professional grade closed loop extraction system designed to recover the solvents; (B) in an environment with proper ventilation; and (C) with control of all sources of ignition if a flammable atmosphere is or may be present (c) A marijuana product manufacturing facility using a professional grade closed loop gas extraction system must ensure that ratings; (1) every vessel is used in compliance with the manufacturer's stated pressure (2) any CO2 used is of at least ninety-nine percent purity; (3) any person using a solvent or gas to extract marijuana concentrate in the closed looped system must be fully trained on how to use the system, have direct access to applicable material safety data sheets, and handle and store the solvent and gas safely; (4) a licensed engineer has certified that the professional grade closed loop system was commercially manufactured, is safe for its intended use, and is built to codes of recognized and generally accepted engineering practices; (5) any professional grade closed loop system, and other equipment and facilities 71 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 used in the extraction process must be approved for their use by the local fire code official and must meet any applicable fire, safety, and building code requirements. (d) A marijuana product manufacturing facility may use heat, screens, presses, steam distillation, ice water, and other methods without employing solvents or gases to create kief, hashish, bubble hash, infused dairy butter, or oils or fats derived from natural sources, and other extracts. (e) A marijuana product manufacturing facility may use food grade glycerin, ethanol, and propylene glycol solvents to create extracts. All ethanol must be removed from the extract in a manner to recapture the solvent and ensure that it is not vented into the atmosphere. (Et% Register _) Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.560. Potency limits per serving and transaction for edible marijuana products. (a) A marijuana product manufacturing facility may not prepare any product with potency levels exceeding the following, as tested in compliance with 3 AAC 306.645: (1) for a single serving of marijuana product, five milligrams active tetrahydrocannabinol (THC) or Delta 9; (2) in a single packaged unit of marijuana product to be eaten or swallowed, not more than ten servings, or fifty milligrams of active THC or Delta 9; the THC content must be homogenous, or evenly distributed throughout the marijuana infused product. (Eff. /_, Register _) Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 72 Register COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 1211/2015 3 AAC 306.565. Packaging of marijuana products. (a) A marijuana product manufacturing facility shall observe the potency limits set out in 3 AAC 306.560 in packaging each product for resale by a retail marijuana store. (b) A container or packaging for any edible marijuana product produced by a marijuana product manufacturing facility may not have any printed images, including cartoon characters, that specifically target individuals under the age of 21. In addition, the packaging must (1) protect the product from contamination and not impart any toxic or damaging substance to the product; (2) if the marijuana product contains multiple servings, the product itself must have markings or demarcations clearly delineating each serving of the product. For liquid marijuana products with multiple servings the packaging must indicate the number and size of individual servings. (c) A licensed marijuana product manufacturing facility may transfer marijuana products that are not edible marijuana products to another licensed facility in wholesale packages not to exceed 5 pounds. (d) Each packaged marijuana product must be identified by a tracking label generated by the marijuana product manufacturing facility's marijuana inventory control system. (e) A licensed marijuana product manufacturing facility shall prepare marijuana products for transfer to another marijuana establishment by (1) placing marijuana products within a sealed, tamper- evident shipping container; container; and (2) affixing a label that complies with 3 AAC 306.570(d) to the shipping 73 a Register, ' 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 (3) generating a transport manifest from the marijuana product manufacturing facility's marijuana inventory system; the transport manifest must remain with the marijuana products at all times while being transported, and a copy must be given to the licensed marijuana establishment that receives the shipment (Eff. _/_ /_, Register _) Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.570. Labeling of marijuana products. (a) With each production lot of marijuana product sold, a marijuana product manufacturing facility must disclose in writing the name of the licensed marijuana testing facility that perforated any required test and the results of each required test. (b) A marijuana product may not be labeled as organic. (c) A marijuana product manufacturing facility shall affix a label containing the following information to each package of marijuana product sold to a retail store for resale to a consumer. (1) the name and license number of the marijuana product manufacturing facility where the marijuana product was prepared; (2) the production lot number assigned to the product in the package; (3) the net weight of the product in the package, not including weight of packaging, using a standard of measure compatible with the inventory tracking system; (4) a label containing the following statements: (A) "Marijuana has intoxicating effects and may be habit forming and addictive;" (B) "Marijuana impairs concentration, coordination, and judgment. Do not operate a vehicle or machinery under its influence;" 74 Register, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 (C) "There are health risks associated with consumption of marijuana;' and (D) "For use only by adults twenty-one and older. Keep out of the reach of children" (E) "Marijuana should not be used by women who are pregnant or breast feeding." (d) A marijuana product manufacturing facility transporting marijuana product to a retail marijuana store shall affix a label to the shipping container showing that a licensed marijuana testing facility has tested each lot of marijuana product in the shipment and giving the test results, including the following information: (1) a cannabinoid potency profile expressed as a range of percentages that extends from the lowest percentage to highest percentage of concentration for each cannabinoid listed from every test conducted on that production lot from the same marijuana product manufacturing facility within the last three months; (2) a statement listing the results of microbial testing required by 3 AAC 306.645(6)(2); (3) a statement listing the results of residual solvent testing required by 3 AAC 306.645(b)(3), if applicable; (4) a statement listing any of the following contaminants for which the product was tested: (A) molds, mildew and filth, in addition to the testing required by 3 AAC 306.645(bx2); (B) herbicides, pesticides, and fungicides, and (C) harmful chemicals. 75 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 (e) Wit marijuana product manufacturing facility ships wholesale marijuana product from a production lot of marijuana product that has not been tested for each contaminant listed in (dx4) of this section, the label for that lot must include a statement identifying each contaminant listed in (dx4) of this section for which that lot has not been tested. (Eff. Register Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 Article 6. Marijuana Testing Facilities. Section 600. Applicability 605. Marijuana testing facility license required 610. Marijuana testing facilities: privileges and prohibitions 615. Application for marijuana testing facility license 620. Approval of testing facility 625. Proficiency testing program 630. Scientific director 635. Testing methodologies 640. Standard operating procedure manual 645. Laboratory testing of marijuana and marijuana products 650. Chain of custody 655. Marijuana inventory tracking system 660. Failed materials, retests 76 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 665. Supplemental marijuana quality testing 670. Reporting, verification 675. Records retention 3 AAC 306.600. Applicability. (a) The provisions of 3 AAC 306.600 - 3 AAC 306.675 apply to any person offering any service testing, analyzing, or certifying potency, moisture content, pesticide or solvent residue, mold, mildew, bacteria, or other contaminant in marijuana or any marijuana product to any other person including a marijuana establishment or any member of the public, whether for compensation or not, as a independent or third party testing facility. (b) The provisions of 3 AAC 306.600 - 3 AAC 306.675 do not apply to any licensed marijuana establishment that controls marijuana testing equipment used solely for its own in- house testing of its own cultivated crop, of products produced or manufactured at its own facility, or of retail products placed or offered for sale in its marijuana retail store. (Eff. /_, Register__) Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.605. Marijuana testing facility license required. (a) A person may not offer or provide any marijuana testing service or test results unless the person has obtained a marijuana testing facility license from the board in compliance with this chapter, or is an employee or agent acting for a licensed marijuana testing facility. (b) A person seeking a marijuana testing facility license must (1) submit an application for a marijuana testing facility license on a form the board prescribes, including the information set out at 3 AAC 306.020 and 3 AAC 306.615; and 77 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 (2) demonstrate to the board's satisfaction that the applicant will operate in compliance with (A) each applicable provision of 3 AAC 306.600 — 3 AAC 306.675, and 3 AAC 306.700 - 3 AAC 306.755; and (B) each applicable public health, fire, safety, and tax code and ordinance of the state and the local government in which the applicant's proposed licensed premises are located. (C) does not hold any marijuana establishment license in this state other than a testing facility license, or have any financial interest in common with any person who is a licensee of a marijuana establishment in this state other than a testing facility license; and (D) meets the board's standards for approval as set out in 3 AAC 306.620 000 - 3 AAC 306.625. (c) A licensee of any marijuana testing facility, or an employee or agent of a licensed marijuana testing facility may not have an ownership interest in, or a direct or indirect financial interest in any other licensed marijuana establishment. (Ef . / / Register--) Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.610. Marijuana testing facilities: privileges and prohibitions. (a) A licensed marijuana testing facility may have any amount of marijuana and marijuana product on its premises at any given time provided that the testing facility's marijuana inventory tracking system and other records document that all marijuana and marijuana products are on the premises only for the testing purposes described in 3 AAC 306.600 — 3 AAC 3306.675. Register r, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 (b) A licensed marijuana testing facility may not (1) have any licensee, employee, or agent who holds any type of marijuana establishment license other than a marijuana testing facility license issued under this chapter; (2) sell, deliver, distribute, or transfer any marijuana or marijuana product to a consumer, with or without compensation; or (3) allow any person to consume marijuana or marijuana product on its licensed premises. (Eff. / /_, Register_) Authority: AS 17.38.010 AS 17.38.084 AS 1738 Inn AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.615. Application for marijuana testing facility license. An applicant for a new marijuana testing facility license must file an application on a form the board prescribes, including (1) the information required under 3 AAC 306.020; and (2) the proposed marijuana testing facility's operating plan, including, in addition to the information required under 3 AAC 306.020(c), the following: (A) each test the marijuana testing facility will offer, (B) the facility's standard operating procedure for each test the facility will offer; and (C) the acceptable range of results for each test the facility will offer. (Eff. /_ /_� Register Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.620. Approval of testing facility. (a) A person seeking a marijuana testing 78 79 Register, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 facility license must first obtain the approval of the board by showing competence to perform each test the licensee will offer as an independent third party testing facility, including tests to identify (1) THC, THCA; CBD, CBDA and CBN potency; (2) harmful microbials including E. coli or salmonella; (3) residual solvents; (4) poisons or toxins; (5) harmful chemicals; (6) dangerous molds, mildew or filth; (7) pesticides. (b) In evaluating whether a person has shown competence in testing under this section, the board or the board's contractor may (1) conduct an on -site inspection ofthe applicant's premises; (2) require the applicant to demonstrate proficiency in testing; and (3) examine compliance with any applicable requirement of 3 AAC 306.630 - 3AAC 306.675, and 3 AAC 306.700 - 3AAC 306.755, including (A) qualificationsofpersonnel; (B) standard operating procedure for each testing methodology the facility will use; (C) proficiency testing results; (D) quality control and quality assurance; (E) security; (F) chain ofcustody; 80 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 1211/2015 (G) specimen retention; (H) space; (I) records; and (J) reporting of results. (c) In this section, "approval" means the board or its contractor has examined the qualifications and procedures of the marijuana testing facility license applicant and found them generally in compliance with good laboratory practices; "approval" does not mean the board guarantees that the testing facility can or will protect the public from all potential hazards of marijuana including microbials, poisons or toxins, residual solvents, pesticides, or other contaminants. (Eff. / / Register _) Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.625. Proficiency testing program. (a) When an accredited proficiency testing program becomes available in the state, the board may require an applicant for a marijuana testing facility license to participate successfully in a proficiency testing program with in 12 months before receiving a license. The proficiency testing program must require an applicant for a marijuana testing facility license or a participating licensed marijuana testing facility to analyze test samples using the same procedures with the same number of replicate analyses, standards, testing analysts, and equipment that will be used for product testing. Successful participation means the positive identification of 80 percent of the target analytes that the testing facility reports, and must include quantitative results when applicable. Any false positive results reported will be considered an unsatisfactory score for the proficiency test. (b) Before renewing the license of a marijuana testing facility, the board may require the 81 N 0 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 facility to participate in a proficiency testing program with documentation of continued performance satisfactory to the board. The license of a marijuana testing facility maybe limited, suspended, or revoked if the facility fails to participate and receive a passing score in a proficiency testing program. (c) The scientific director and each testing analyst of an applicant for a marijuana testing facility license and a licensed marijuana testing facility that participated in a proficiency test shall sign a corresponding attestation statement The scientific director must review and evaluate each proficiency test result. (d) An applicant for a marijuana testing facility license, and a licensed marijuana testing facility participating in the proficiency testing program, shall take and document remedial action when the applicant or the facility meets the standards of (a) of this section, but scores less than 100 percent in a proficiency test. "Remedial action" means the marijuana testing facility's scientific director shall, at a minimum, review all samples tested and results reported after the date of the marijuana testing facility's last successful proficiency test. Register_ Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.630. Scientific director. (a) A marijuana testing facility must employ a scientific director who must be responsible for practice; and (1) overseeing and directing the laboratory's scientific methods; (2) ensuring that the laboratory achieves and maintains quality standards of (3) supervising all staff of the laboratory. 82 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 (b) The scientific director of a marijuana testing facility must have the following qualifications: (1) a doctorate degree in chemical or biological sciences from an accredited college or university and have at least 2 years of post - degree laboratory experience; (2) a master's degree in chemical or biological sciences from an accredited college or university and have at least 4 years of post - degree laboratory experience; or (3) a bachelor's degree in chemical or biological sciences from an accredited college or university and have at least 6 years of post - degree laboratory experience. (Eff. / /_ Register _) Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38. 070 AS 17.38.090 AS 17.38.900 3 AAC 306.635. Testing methodologies. (a) An applicant for a marijuana testing facility license and a licensed marijuana testing facility shall (1) use the following materials, which are adopted by reference, as guidelines or references for testing methodologies: (A) Cannabis Inflorescence: Standards of Identity, Analysis, and Quality Control, Revision 2014 published by the American Herbal Pharmacopoeia; and (B) United Nations Office on Drugs and Crime: Recommended methods for the identification and analysis of cannabis and cannabis products: Manual for use by national drug analysis laboratories (2009). (2) notify the board of any alternative scientifically valid testing methodology the facility proposes to use for any laboratory test it conducts; the board may require third -party validation of any monograph, peer reviewed scientific journal article, or analytical method the 83 N r+ Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 marijuana testing facility proposes to follow to ensure the methodology produces comparable and accurate results. (b) An applicant for a marijuana testing facility license and the holder of a marijuana testing facility license must observe good laboratory practices. (c) The board or the board's contractor may inspect the practices, procedures, and programs adopted, followed, and maintained by the applicant or the licensed marijuana testing facility; and may examine all records ofthe applicant or the licensed marijuana testing facility that are related to the inspection. The board may require an applicant or a licensed marijuana testing facility to have an independent third party inspect and monitor laboratory operations to assess testing competency and the facility's compliance with its quality program. The board may require random validation of a marijuana testing facility's execution of all testing methodologies the facility uses. The marijuana testing facility must pay all costs of validation. (Eff. /_, Register _) Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 Editor's note: Cannabis Inflorescence: Standardsofldentity, Analysis, and Quality Control, Revision 2014, published by the American Herbal Pharmacopoeia may be obtained from the American Herbal Pharmacopoeia, P.O. Box 66809, Scotts Valley, California 95067, or at the Internet address http: / /www.herbal- ahp.org( United Nations Office on Drags and Crime: Recommended methods for the identification and analysis of cannabis and cannabis products: Manual for use by national drug analysis laboratories (2009).is available at the intemet address https: / /www.tinodc.org( documents /scientific(ST- NAR40- Ebook.pdf OECD Principles of Good laboratory Practice and Compliance Monitoring published by the Organisation for Economic Co- operation and Development as revised as of 1997 is available at the intemet address 3 AAC 306.640. Standard operating procedure manual. (a) An applicant for a 84 Register, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 marijuana testing facility license and a licensed marijuana testing facility must have a written procedures manual with detailed instructions explaining how to perform each testing method the applicant or marijuana testing facility uses, and minimum standards for each test. The written procedures manual must be available to each employee of the marijuana testing facility at all times. A standard operating procedures manual must cover at least the following procedures: (1) sample preparation for each matrix that will be tested; (2) reagent, solution, and reference standard preparation; (3) instrument setup, where applicable; (4) standardization of volumetric reagent solutions, as applicable; (5) data acquisition; and (6) calculation of results; (7) identification criteria; (8) quality control frequency; f (9) quality control acceptance criteria; and (10) corrective action protocol. (b) The scientific director of a licensed marijuana testing facility shall approve, sign, and date each standard operating procedure, and each revision to any standard operating procedure. (Eff. / /_, Register Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.645. Laboratory Testing of Marijuana and Marijuana Products. (a) A licensed marijuana testing facility must use the general body of required laboratory tests for marijuana plant material, any extract or concentrate of marijuana, and any edible marijuana 85 N N Register 2016 COMMERCE, CONSIUNITy, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 Products as listed in the tables in this section. Required tests may include potency analysis, moisture content, foreign matter inspection, microbial screening, pesticide, other chemical residue, and metals screening, and residual solvents levels. A marijuana testing facility shall establish a schedule of fees and sample size required for each test it offers. (b) The tests required for each marijuana type or marijuana product, are as follows: (1) potency testing is required on marijuana bud and flower, marijuana concentrate, and marijuana product, and is subject to the following rules: (A) required cannabinoid potency test must at least determine the concentration of THC, THCA, CBD, CBDA and CBN cannabinoids; a marijuana testing facility may test and report results for any additional cannabinoid provided the test is conducted in compliance with a validated method; (B) a marijuana testing facility shall report potency test results as follows: (i) for a potency test on marijuana and marijuana concentrate, by listing for each required cannabinoid a single percentage concentration that represents an average of all samples within the test batch; alternatively, the sum of THC + THCA may be reported as total THC; the sum of CBD + CBDA may be reported as total CBD; (ii) for a potency test on a marijuana product, whether conducted on each individual production lot or using process validation, by listing for each cannabinoid the total number of milligrams contained within a single retail marijuana product unit for sale; and (iii) for testing whether the THC content is homogenous, the THC content of each single serving in a multi-unit package must be reported, and must 86 Register, 2016 COMMERCE, COMMLjJzTy, AND EC. DEV. Final Adopted Regulations as of 12/112015 be within 20% of the manufacturer's target; for example, in a 25 mg total THC package with 5 servings, each serving must contain between 4 and 6 mg of THC; (C) edible marijuana products will be considered to have failed potency testing if (i) an individually packaged edible retail marijuana product contained within a test lot is determined to have more than 50 mg of THC within it; (ii) if the THC content of an edible marijuana product is not homogenous; (2) microbial testing for the listed substances on the listed marijuana products is required as follows: Substance Acceptable Umlts Per Gram Product to be Tested —Shiga -toxin producing < 1 colony Forming Unit (CFU /g) Flower; Retail Marijuana Escherlchla call (sTEC)•- Bacteria Salmonella species•— Bacteria < 1 Colony Forming Unit(CFU /g) BasedConcentrates dFood- Asperglllus fumigatus, Aspergillus < 1 Colony Forming Unit (CFU/g) flavus, Aspergillus niger- Fungus (3) testing for the listed residual solvents and metals on the listed marijuana products is required as follows: Substance Acce table Umits Per Gram Product to be Tested Butanes < 800 Parts Per Million PP M Heptanes ( ) Solvent -Based Concentrates <S00 Parts Per MIIIIan (PPM) Benzene— <.025 parts Per Million (PPM Toluene— < 1 Parts per Million (PPM) Hexane" < I Parts Per Million (PPM) Total Xylenes (m,p, o- xylenes)•• c 1 Parts Per Million (PPM) ME / /_, Register_) Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 87 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 3 AAC 306.650. Chain of custody. A marijuana testing facility must establish an adequate chain of custody and sample requirement instructions that include (1) issuing instructions for the minimum sample requirements and storage requirements; (2) documenting the condition of the external package and integrity seals utilized to prevent contamination of, or tampering with, the sample; (3) documenting the condition and amount of sample provided at the time the sample is received at the facility; (4) documenting each person handling the original samples, aliquots, and extracts; (5) documenting any transfer of samples, aliquots, and extracts to another marijuana testing facility for additional testing or at the request of the marijuana cultivation k.+ w facility or marijuana product manufacturer that provided the testing sample; (6) maintaining a current list of authorized personnel and restricting entry to the facility to those authorized persons; (7) securing the facility during non - working hours; (8) securing short -term and long -term storage areas when not in use; (9) using a secured area to log in and aliquot samples; (10) ensuring samples are stored appropriately; and (11) documenting the disposal of samples, aliquots, and extracts. (Eff. / Registers Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 3 AAC 306.655. Marijuana inventory tracking system. A marijuana testing facility shall use an inventory tracking system as provided in 3 AAC 306.730 to ensure all marijuana transported to the marijuana testing facility's premises is identified and tracked from the time the marijuana arrives at the testing facility to the use and destruction of the marijuana in testing, or disposal in compliance with 3 AAC 306.740. (EfI. / /_ Register_--) Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.660. Failed materials, retests. (a) If a sample tested by a marijuana testing facility does not pass the required tests based on the standards set out in 3 AAC 306.645, the facility that provided the sample shall (1) dispose of the entire harvest batch or production lot from which the sample was taken; and (2) document the disposal of the sample using its marijuana inventory control system. (b) If a sample of marijuana fails a required test, any marijuana plant trim, leaf, and other usable material from the same plants automatically fails the required test. The board may approve a request to allow a batch of marijuana that fails a required test to be used to make a CO2 or solvent -based extract. After processing, the CO2 or solvent -based extract must pass all required tests. (c) If a marijuana cultivation facility or a marijuana product manufacturing facility petitions for a re -test of marijuana or a marijuana product that failed a required test, the board may authorize a retest to validate the test results. The marijuana cultivation facility or a marijuana product manufacturing facility must pay all costs of a retest. (Eff. /_% 88 89 N A Register, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 Register _) Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.665. Supplemental marijuana quality testing. (a) The board or director may at any time determine that the interests of the public require random supplemental testing of marijuana or a marijuana product. When the board or director requires random supplemental marijuana testing, the board or director will direct the marijuana cultivation facility that produced the marijuana, or the marijuana product manufacturing facility that manufactured the product, to submit a specified sample, batch, or packaged product to a designated marijuana testing facility. The material must be packaged in a manner that ensures the testing facility will be able to confirm that it has received and is testing the correct supplemental sample. (b) When a marijuana testing facility receives a sample for supplemental laboratory testing under this section, the marijuana testing facility shall (1) perform any required laboratory test the board requests; and (2) report its results to the board or director and the facility that provided the sample. (c) A marijuana testing facility that conducts laboratory testing under this section shall bill all costs directly to the marijuana cultivation facility or the marijuana product manufacturing facility that provided the samples for testing. (Ef. . _/ /_, Register Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.670. Reporting, verification. (a) A marijuana testing facility must report the result of each required laboratory test directly into its marijuana inventory control system 90 Register_, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 within twenty-four hours after the test is completed. A marijuana testing facility must provide the final report (1) to the facility that submitted the sample in a timely manner, and (2) to the director within 72 hours when results of tested samples exceed allowable levels. (b) A marijuana testing facility shall establish procedures to ensure that reported results are accurate, precise, and scientifically valid. To ensure reported results are valid, a marijuana testing facility must include in all final reports: (1) the name and location of the marijuana testing facility; (2) the unique sample identifier assigned by the testing facility; (3) the marijuana establishment or other person that submitted the testing sample; (4) the sample identifier provided by the person that submitted the testing sample; (5) the date the facility received the sample; (6) the chain of custody identifier; (7) the date of report; (8) the type of product tested; (9) the test results; (10) the units of measure; and (11) any other information or qualifiers needed for interpretation of the test method and the results being reported, including any identified and documented discrepancy. (c) A marijuana testing facility may amend a final report for clerical purposes except that test results may not be amended. (Eff. / / Register 91 N Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.675. Records retention. A marijuana testing facility shall maintain the business records required under 3 AAC 306.755 for the period of time specified in that section. The books and records required under 3 AAC 306.755(a)(1) include: (1) test results; (2) quality control and quality assurance records; (3) standard operating procedures; (4) chain of custody records; (5) proficiency testing records; (6) analytical data to include printouts generated by the instrumentation; (7) accession numbers; (8) specimen type; (9) raw data of calibration standards and curves, controls and subject results; (10) final and amended report; (11) acceptable reference range parameters; (12) identity ofanalyst; and (13) date of analysis. (Eff. / /_ Register Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 Section AS 17.38.070 AS 17.38.090 AS 17.38.900 Article 7. Operating Requirements for All Marijuana Establishments. 92 Register r, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 1211/2015 700. Marijuana handler permit 705. Licensed premises, alteration 710. Restricted access areas 715. Security alarm systems and lock standards 720. Video surveillance 725. Inspection of licensed premises 730. Marijuana inventory tracking system 735. Health and safety standards 740. Waste disposal 745. Standardized scales 750. Transportation 755. Business records 3 AAC 306.700. Marijuana handler permit. (a) A marijuana establishment and each licensee, employee, or agent of the marijuana establishment who sells, cultivates, manufactures, tests, or transports marijuana or a marijuana product, or who checks the identification of a consumer or visitor, shall obtain a marijuana handler permit from the board before being licensed or beginning employment at a marijuana establishment. (b) To obtain a marijuana handler permit, a person shall complete a marijuana handler permit education course approved by the board, pass a written test demonstrating an understanding of the course material, and obtain a certificate of course completion from the course provider. An approved marijuana handler permit education course must cover at least the following topics: (1) AS 17.37, AS 17.3 8, and this chapter, 93 N 0% Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 (2) the effects of consumption of marijuana and marijuana products; (3) how to identify a person impaired by consumption of marijuana; (3) how to determine valid identification; (4) how to intervene to prevent unlawful marijuana consumption; and (5) the penalty for an unlawful act by a licensee, an employee, or an agent of a marijuana establishment. (c) To obtain a marijuana handler permit, a person who has completed the marijuana handler permit course described under (b) of this section shall present the course completion certificate to the director. The director shall issue a marijuana handler permit card valid for three years from the date of issue. A person may renew a card issued under this section by passing a written test demonstrating an understanding of the course subjects. (d) A licensee, employee, or agent of a marijuana establishment shall keep the marijuana handler permit card described in (c) of this section in that person's immediate possession when on the licensed premises of the retail marijuana store. (e) The board will review an approved marijuana handler permit education course at least once every three years, and may rescind approval of the course if the board finds that the education course contents are insufficient or inaccurate. (Ef. _/ / , Register Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 3 AAC 306.705. Licensed premises, alteration. (a) A marijuana establishment license will be issued for a specific licensed premises, which is a place clearly designated in a license application and described by a line drawing submitted with the license application. The licensed 94 Register, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 premises must (1) have adequate space for its approved operations, including growing, manufacturing, processing, packaging, or storing marijuana or marijuana products; and (2) be located and constructed to facilitate cleaning, maintenance, and proper operation (b) A marijuana establishment's license must be posted in a conspicuous place within the licensed premises. (c) A holder of a marijuana establishment license may not alter the functional floor plan or reduce or expand the area of the licensed premises without first obtaining the director's written approval. A marijuana establishment license holder seeking to change or modify the licensed premises shall submit a request for approval of the change on a form prescribed by the board, along with (1) the fee prescribed in 3 AAC 306.100; (2) a drawing showing the proposed change; (3) evidence that the proposed change conforms to any local restrictions; and (4) evidence that the licensee has obtained any applicable local building permit. (Ef. . / /_, Register __) Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 3 AAC 306.710. Restricted access areas. (a) A marijuana establishment shall restrict access to any part of the licensed premises where marijuana or a marijuana product is grown, processed, tested, stored, or stocked. 95 N Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 (b) Except as provided in 3 AAC 306.325 for a marijuana retail store, each entrance to a restricted access area must be marked by a sign that says "Restricted access area. Visitors must be escorted." A marijuana establishment shall limit the number of visitors to not more than five visitors for each licensee, employee, or agent of the licensee who is actively engaged in supervising those visitors. (c) In a restricted access area, any licensee, employee, and agent of the marijuana establishment shall wear a current identification badge bearing the person's photograph. A person under the age of 21 may not enter any restricted access area Any visitor to the restricted area must (1) show identification as required in 3 AAC 306.350 to prove that person is not under the age of 21; (2) obtain a visitor identification badge before entering the restricted access area; and (3) be escorted at all times by a licensee, or an employee or an agent of the marijuana establishment. (Eff. /_/ Registers Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 3 AAC 306.715. Security alarm systems and lock standards. (a) Each licensee, employee, or agent of a marijuana establishment shall display an identification badge issued by the marijuana establishment at all times when on the marijuana establishment's licensed premises. (b) The licensed premises of a marijuana establishment must have 96 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 (1) exterior lighting to facilitate surveillance; (2) a security alarm system on all exterior doors and windows; and (3) continuous video monitoring as provided in 3 AAC 306.720. (c) A marijuana establishment shall have policies and procedures that (1) are designed to prevent diversion of marijuana or marijuana product; (2) prevent loitering; (3) describe the use of any additional security device, such as a motion detector, pressure switch, and duress, panic, or hold -up alarm to enhance security of its licensed premises; and (4) describe the actions to be taken by a licensee, employee, or agent of the marijuana establishment when any automatic or electronic notification system alerts a local law enforcement agency of an unauthorized breach of security. (d) A marijuana establishment must use commercial grade, non - residential door locks on all exterior entry points to the licensed premises. Eff. / / Register _) Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 3 AAC 306.720. Video surveillance. (a) A marijuana establishment shall install and maintain a video surveillance and camera recording system as provided in this section. The video system must cover (1) each restricted access area and each entrance to a restricted access area within the licensed premises; (2) each entrance to the exterior of the licensed premises; 97 N ce Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 (3) each point -of -sale area (b) At a marijuana establishment, a required video camera must be placed in a way that produces a clear view adequate to identify any individual inside the licensed premises, or within 20 feet of each entrance to the licensed premises. Both the interior and the exterior of each entrance to the facility must be recorded by a video camera. (c) Any area where marijuana is grown, cured, or manufactured, or where marijuana waste is destroyed, must have a camera placement in the room facing the primary entry door, and in adequate fixed positions, at a height which will provide a clear, unobstructed view of the regular activity without a sight blockage from lighting hoods, fixtures, or other equipment, in order to allow for the clear and certain identification of any person and activity in the area at all times. (d) Surveillance recording equipment and video surveillance records must be housed in a locked and secure area or in a lock box, cabinet, closet or other secure area that is accessible only to a marijuana establishment licensee or authorized employee, and to law enforcement personnel including an agent of the board. A marijuana establishment may use an offsite monitoring service and offsite storage of video surveillance records as long as security requirements at the offsite facility are at least as strict as offite security requirements as described in this section. (e) Each surveillance recording must be preserved for a minimum of 40 days, in a format that can be easily accessed for viewing. All recorded images must clearly and accurately display the time and date, and must be archived in a format that does not permit alteration of the recorded image, so that the images can readily be authenticated. After 40 days, a marijuana establishment may erase video recordings, unless the licensee knows or should know of any pending criminal, civil, or administrative investigation for which the video recording may 98 Register_, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 contain relevant information. (Eff. / / Register _) Authority: AS 17.38.010 AS 17.38.085 AS 17.38.100 AS 17.38.070 AS 17.38.087 AS 17.38.900 AS 17.38.084 AS 17.38.090 3 AAC 306.725. Inspection of licensed premises. (a) A marijuana establishment or an applicant for a marijuana establishment license under this chapter shall, upon request, make the licensed premises or the proposed licensed premises, including any place for storage, available for inspection by the director, an employee or agent of the board, or an officer charged with the enforcement of this chapter. The board or the director may also request a local fire protection agency or any other state agency with health and safety responsibilities to inspect licensed premises or proposed licensed premises. (b) Inspection under this section includes inspection of the premises, facilities, qualifications of personnel, methods of operation, business and financial records, marijuana inventory tracking system, policies, and purposes of any marijuana establishment and of any applicant for a marijuana establishment license. (Eff. / /_, Register___) Authority: AS 17.38.010 AS 17.38.085 AS 17.38.100 AS 17.38.070 AS 17.38.087 AS 17.38.900 AS 17.38.084 AS 17.38.090 3 AAC 306.730. Marijuana inventory tracking system. (a) A marijuana establishment shall use a marijuana inventory tracking system capable of sharing information with the system the board implements to ensure all marijuana cultivated and sold in the state, and each marijuana product processed and sold in the state, is identified and tracked from the time the marijuana is propagated from seed or cutting, through transfer to another licensed marijuana 99 W N b Register, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 establishment, or use in manufacturing a product, to a completed sale of marijuana or marijuana product, or disposal of the harvest batch of marijuana or production lot of marijuana product. (b) All marijuana delivered to a marijuana establishment must be weighed on a scale certified in compliance with 3 AAC 306.745. (Eff. /_ / Register (Eff. / / Register Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 3 AAC 306.735. Health and safety standards. (a) A marijuana establishment is subject to inspection by the local fire department, building inspector, or code enforcement officer to confirm that no health or safety concerns are present (b) A marijuana establishment shall take all reasonable measures and precautions to ensure that (1) any person who has an illness, an open sore or infected wound, or other potential source of infection may not come in contact'with marijuana or a marijuana product while the illness or source of infection persists; (2) the licensed premises have (A) adequate and readily accessible toilet facilities that are maintained in good repair and sanitary condition; and (B) convenient hand - washing facilities with running water at a suitable temperature; the marijuana establishment shall require employees to wash or sanitize their hands, and must provide effective hand - cleaning, sanitizing preparations, and drying devices; 100 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 (3) each person working in direct contact with marijuana or a marijuana product shall conform to good hygienic practices while on duty, including (A) maintaining adequate personal cleanliness; and (B) washing hands thoroughly in an adequate hand - washing area before starting work, after using toilet facilities, and at any other time when the person's hands may have become soiled or contaminated; (4) litter, waste, and rubbish are properly removed; the waste disposal equipment must be maintained and adequate to (A) avoid contaminating any area where marijuana or any marijuana product is stored, displayed, or sold; and (B) prevent causing odors or attracting pests; (5) floors, walls, and ceilings must be constructed to allow adequate cleaning, and must be kept clean and in good repair; (6) adequate lighting is installed in any area where marijuana or a marijuana product is stored, displayed, or sold, and where any equipment or utensil is cleaned; (7) screening or other protection adequately protects against the entry of pests; (8) any building, fixture, and other facility is maintained in sanitary condition; (9) any toxic cleaning compound, sanitizing agent, and pesticide chemical must be identified and stored in a safe manner to protect against contamination of marijuana or marijuana product and in compliance with any applicable local, state, or federal law; (10) adequate sanitation principles are used in any receiving, inspecting, transporting, and storing of marijuana or marijuana product; and (11) any marijuana or marijuana product must be held in a manner that prevents 101 Register, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 the growth of bacteria, microbes, or other undesirable microorganisms. (c) A marijuana establishment shall ensure that any marijuana or marijuana product that has been stored beyond its usable life, or was stored improperly, is not salvaged and returned to the marketplace; in this section, "stored improperly" means being exposed to extremes in temperature, humidity, smoke, fumes, pressure, or radiation due to a natural disaster, fire, accident, or equipment failure. (d) If a marijuana establishment does not have reliable information about the age or storage conditions of marijuana or a marijuana product in its possession, the marijuana establishment may salvage the marijuana only if. (1) a licensed marijuana testing facility determines from quality assurance testing that the marijuana or marijuana product meets all applicable standards of moisture, potency, and contaminants; w o (2) inspection of the premises where a disaster or accident occurred shows that the marijuana or marijuana product stored there was not adversely affected by the disaster or accident; and (3) the marijuana establishment maintains a record of the salvaged marijuana or marijuana product in its marijuana inventory tracking system, including the name, lot number and final disposition. (Eff. _/ / Register __) Authority: AS 17.38.010 AS 17.38.087 AS 17.38. 100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 3 AAC 306.740. Waste disposal. (a) A marijuana establishment shall store, manage, and dispose of any solid or liquid waste, including wastewater generated during marijuana Register, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 cultivation production, processing, testing, or retail sales, in compliance with applicable federal, state, and local laws and regulations. (b) Marijuana waste must be rendered unusable for any purpose for which it was grown or produced before it leaves a marijuana establishment. Marijuana waste includes: (1) marijuana plant waste, including roots, stalks, leaves, and stems that have not been processed with solvent;. (2) solid marijuana sample plant waste in the possession of a marijuana testing facility; and (3) other waste as determined by the board. (c) A marijuana establishment shall (1) give the board at least 3 days notice in the marijuana inventory tracking system required under 3 AAC 306.730 before making the waste unusable and disposing of it; except that the director may authorize immediate disposal on an emergency basis; and (2) keep a record of the final destination of marijuana waste made unusable. (d) Marijuana plant waste must be made unusable by grinding the marijuana plant waste and mixing it with at least an equal amount of other compostable or non- compostable materials. A marijuana establishment may use other methods to make marijuana waste unusable if the board approves the method in advance. Material that may be mixed with the marijuana waste includes (1) compostable materials including food waste, yard waste, vegetable based grease or oils, or other wastes approved by the board when the mixed material can be used as compost feedstock or in another organic waste method such as an anaerobic digester with approval of any applicable local government entity; or 102 103 r w r Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 (2) non- compostable materials including paper waste, cardboard waste, plastic waste, oil, or other wastes approved by the board when the mixed material may be delivered to a permitted solid waste facility, incinerator, or other facility with approval of any applicable local government entity. (e) When marijuana or a marijuana product is found by, or surrendered to, a law enforcement officer including an airport security officer, the officer may dispose of the marijuana or marijuana product as provided in this section or by any method that is allowed under any applicable local ordinance. (Eff. /_ /_, Register _) Authority: AS 17:38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 3 AAC 306.745. Standardized scales. A marijuana establishment shall use certified scales in compliance with AS 45.75.080, the Alaska Weights and Measures Act. A marijuana establishment shall (1) maintain registration and inspection reports of certified scales; and (2) upon request by the board or the director, provide a copy of the registration and inspection reports of the certified scales to the board or the director for review. (Eff. /_ Register Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS 17.38.084 3 AAC 306.750. Transportation. (a) A licensed marijuana establishment shall transport marijuana as follows: 104 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 (1) a marijuana cultivation facility may transport marijuana to another marijuana cultivation facility, a marijuana product manufacturing facility, a marijuana testing facility, or a marijuana retail store; (2) a marijuana product manufacturing facility may transport a marijuana product to another marijuana product manufacturing facility, a marijuana testing facility, or a marijuana retail store; (3) a marijuana testing facility may transport marijuana or a marijuana product to the facility from which it received the marijuana or another marijuana testing facility; and (4) a marijuana retail store may transport marijuana or a marijuana product to another marijuana retail store. (b) A marijuana establishment from which a shipment of marijuana or marijuana product originates is responsible for preparing, packaging, and securing the marijuana or marijuana product during shipment, for recording the transfer in the marijuana inventory tracking system, and for preparing the transport manifest. Any individual transporting marijuana in compliance with this section shall have a marijuana handler permit required under 3 AAC 306.700. (c) When any marijuana or marijuana product is transported, the marijuana establishment that originates the transport shall use the marijuana tracking system to record the type, amount and weight of marijuana or marijuana product being transported, the name of the transporter, the time of departure and expected delivery, and the make, model and license plate number of the transporting vehicle. A complete printed transport manifest on a form prescribed by the board must be kept with the marijuana or marijuana product at all times. (d) During transport, any marijuana or marijuana product must be in a sealed package or container in a locked, safe and secure storage compartment in the vehicle transporting the 105 w N Register_ 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 marijuana or marijuana product The "sealed package may not be opened during transport. Any vehicle transporting marijuana or marijuana product must travel directly from the shipping marijuana establishment to the receiving marijuana establishment, and must not make any unnecessary stops in between except to deliver or pick up marijuana or marijuana product at any other licensed marijuana establishment. (e) When a marijuana establishment receives marijuana or a marijuana product transported in compliance with this section, the recipient of the shipment shall use the marijuana inventory tracking system to report the type, amount, and weight of marijuana or marijuana product received. The licensed recipient shall refuse to accept any shipment of marijuana or marijuana product that is not accompanied by the transport manifest. (1) A marijuana establishment must keep records of all marijuana or marijuana product shipped from or received at that marijuana establishment as required under 3 AAC 306.755. (Eff. /_ /_� Register _) Authority: AS 17.38.010 AS 17.38.087 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 AS:17.38.084 3 AAC 306.755. Business records. (a) A marijuana establishment shall maintain, in a format that is readily understood by a reasonably prudent business person, the following information: (1) all books and records necessary to fully account for each business transaction conducted under its license for the current year and three preceding calendar years; records for the last six months must be maintained on the marijuana establishment's licensed premises; older records may be archived on or off premises; 106 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 , (2) a current employee list setting outthe full name and marijuana handler permit number of each. licensee, employee, and agent who works at the marijuana establishment; (3) the business contact information for vendors that maintain video surveillance systems and security alarm systems for the licensed premises; (4) records related to advertising and marketing; (5) a current diagram of the licensed premises including each restricted access area; (6) a log recording the name, and date and time of entry of each visitor permitted in a restricted access area; (7) all records normally retained for tax purposes; (8) accurate and comprehensive inventory tracking records that account for all marijuana inventory activity from seed or immature plant stage until the retail marijuana or retail marijuana product is sold to a consumer, to another marijuana establishment, or destroyed; and (9) transportation records for marijuana and marijuana product as required under 3 AAC 306.750(1). (b) A marijuana establishment shall provide any record required to be kept on the licensed premises to an employee of the board upon request Any record kept off premises must be provided to the board's employees within three business days after a request for the record. (c) A marijuana establishment is required to exercise due diligence in preserving and maintaining all required records. Loss of records. and data, including electronically maintained records, will not be considered an excuse for a violation of this rule. Failure to retain records required under this section may be interpreted by the board as a license violation affecting public safety. (Eff. /_ /� Register _) 107 r w w Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 Authority: AS 17.38.010 AS 17.38.085 AS 17.38,100 AS 17.38.070 AS 17.38.087 AS 17.38.900 AS 17.38.084 AS 17.38.090 Article 8. Enforcement and Civil Penalties. Section 800. Inspection and investigation 805. Report or notice of violation 810. Suspension or revocation of license 815. Suspension or revocation based on act of employee 820. Procedure for action on license suspension or revocation 825. Summary suspension to protect public health, safety, or welfare. 830. Seizure ofmarijuana or marijuana product 835. Hearing 840. Civil fines 845. Appeal 850. Surrender or destruction of license 3 AAC 306.800. Inspection and investigation. (a) The director; an enforcement agent, an employee of the board, or a peace officer acting in an official capacity, may (1) inspect the licensed premises of any marijuana establishment, including any marijuana and marijuana product on the premises, equipment used in cultivating, processing, testing, or storing marijuana, the marijuana establishment's inventory tracking system, business records, and computers, at any reasonable time and in a reasonable manner; 108 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 (2) issue a report or notice as provided in 3 AAC 306.805; and (3) as authorized under AS 17.38.085, exercise peace officer powers and take any other action the director determines is necessary. (b) A marijuana establishment, and any licensee, employee, or agent in charge shall cooperate with the director, an enforcement agent, an employee of the board, or a peace officer acting in an official capacity, to enforce the laws related to marijuana, including (1) permitting entry upon and inspection of the licensed premises; and (2) providing access to business records at reasonable times when requested by the director, an enforcement agent, an employee of the board, or a peace officer. (Eff. /_J Register Authority: AS 17.38.010 AS 17.38.085 AS 17.38. 100 AS 17.38.070 AS 17.38.087 AS 17.38.900 AS 17.38.084 AS 17.38.090 3 AAC 306.805. Report or notice of violation. (a) The director, an enforcement agent, an employee of the board, or a peace officer acting in an official capacity, may issue an inspection report, an advisory report, or a notice of violation before taking action to suspend or revoke a marijuana establishment license. (b) An inspection report documents an investigator's inspection of licensed premises. An inspection report must be prepared on a form the board prescribes and include information prescribed by statute, regulation, or the board. (c) The director, an enforcement agent, an employee of the board, or a peace officer may issue an advisory notice when an incident occurs or a defect is noted that could result in a violation of a statute, regulation, or municipal ordinance. An advisory notice may result from an 109 w A Register, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 inspection report, but is not a basis for administrative action unless the incident or defect continues or is not corrected. (d) The director, an enforcement agent, an employee of the board, or a peace officer may issue a notice of violation when an inspection report or other credible information shows a marijuana establishment is in violation of AS 17.38, this chapter, or other law relating to marijuana. The notice of violation must be delivered to the marijuana establishment at its licensed premises, and to the board. The notice must describe any violation, and cite the applicable statute, regulation, or order of the board. A marijuana establishment that receives a notice of violation may respond to the notice orally or in writing, and may, within ten days after receiving the notice, request an opportunity to appear before the board. A notice of violation may be the basis of a proceeding to suspend or revoke a marijuana establishment's license as provided under 3 AAC 306.810. (Eff. / / Register_____) Authority: AS 17.38.010 AS 17.38.085 AS 17.38.100 AS 17.38.070 AS 17.38.087 AS 17.38.900 AS 17.38.084 AS 17.38.090 3 AAC 306.810. Suspension or revocation of license. (a) The board will suspend or revoke a marijuana establishment license issued under this chapter if any licensee is convicted of a felony, or a crime listed in 3 AAC 306.010 (c) (2) or (3), or if the board becomes aware that a licensee did not disclose a previous felony conviction or a conviction of a crime listed in 3 AAC 306.010(c)(2) or (3). (b) The board may suspend or revoke a license issued under this chapter, refuse to renew a license, or impose a civil fine, if the board finds that a licensee for any marijuana establishment (1) misrepresented a material fact on an application for a marijuana establishment 110 Register, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 license, or an affidavit, report, or signed statement under AS 17.38 or this chapter; or (2) is following any practice or procedure that is contrary to the best interests of the public, including (A) using any process not approved by the board for extracting or manufacturing marijuana concentrate or products; or (B) selling or distributing any marijuana concentrate or product that has not been approved by the board; (3) failed, within a reasonable time after receiving a notice of violation from the director, to correct any defect that is the subject of the notice of violation of (A) AS 17.38 or this chapter; (B) a condition or restriction imposed by the board; or (C) other applicable law; (4) knowingly allowed an employee or agent to violate AS 17.38, this chapter, or a condition or restriction imposed by the board; (5) failed to comply with any applicable public health, fire, safety, or tax law or regulation in the state; or (6) used the licensed premises for any illegal purpose including gambling, possession or use of narcotics other than marijuana, prostitution, or sex trafficking. (c) A local government may notify the director if it obtains evidence that a marijuana establishment has violated a provision of AS 17.38, this chapter, or a condition the board has imposed on the marijuana establishment. Unless the board finds that the local government's notice is arbitrary, capricious, and unreasonable, the director will prepare the notice and supporting evidence as an accusation against the marijuana establishment under AS 44.62.360, Im Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 and conduct proceedings to resolve the matter as described under 3 AAC 306.820. (Eff. /_ Register Authority: AS 17.38.010 AS 17.38.085 AS 17.38.100 AS 17.38.070 AS 17.38.087 AS 17.38.900 AS 17.38.084 AS 17.38.090 3 AAC 306.815. Suspension or revocation based on act of employee. If, in a proceeding to suspend or revoke a marijuana establishment license under 3 AAC 306.810 and 3 AAC 306.820, evidence shows that an employee or agent of a licensed marijuana establishment was responsible for an act that would justify suspension or revocation of the marijuana establishment's license if committed by a licensee, the board may find that licensee knowingly allowed the act if w (1) the licensee was physically present when the violation occurred, and knew or th should have known, the violation was occurring and took no action to stop it; (2) the licensee failed to adequately supervise the agent or employee; (3) the licensee failed to adequately train the agent or employee in the requirements of AS 17.38 and this chapter relating to marijuana; or (4) the licensee was reckless or careless in hiring the agent or employee. (Eff. 1_ /_ Register _) Authority: AS 17.38.010 AS 17.38.085 AS 17.38.100 AS 17.38.070 AS 17.38.087 AS 17.38.900 AS 17.38.084 AS 17.38.090 3 AAC 306.820. Procedure for action on license suspension or revocation. A proceeding to suspend or revoke a license must be initiated by service of an accusation on the Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 marijuana establishment in compliance with AS 44.62.360 and AS 44.62.380, and conducted in compliance with AS 44.62.330 — AS 44.62.630. The accusation must be served at the address of the licensed premises, or at the address of the licensee who is responsible for management and compliance with laws as listed in the marijuana establishment license application in compliance with 3 AAC 306.020(b)(5). The marijuana establishment is entitled to a hearing as provided under AS 44.62.390. (Eff. / / Register Authority: AS 17.38.010 AS 17.38.085 AS 17.38.100 AS 17.38.070 AS 17.38.087 AS 17.38.900 AS 17.38.084 AS 17.38.090 3 AAC 306.825. Summary suspension to protect public health, safety, or welfare. (a) If the director finds that a person holding a marijuana establishment license has acted and appears to be continuing to act in a way that constitutes an immediate threat to the public health, safety or welfare, the director may issue an order immediately suspending the license of that person, and ordering an immediate stop to the activity that constitutes the threat to the public health, safety, or welfare. (b) When the director issues a summary suspension under this section, the director shall immediately give the marijuana establishment subject to the summary suspension order notice of the reasons for the summary suspension, and of the time and place for an expedited hearing before the board. Unless the marijuana establishment subject to the summary suspension order requests a delay, the hearing will be held within five days after the director gives notice of the reasons for the summary suspension and the scheduled hearing. (Eff. /_ /_, Register Authority: AS 17.38.010 AS 17.38.085 AS 17.38.100 113 112 w a Register, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 AS 17.38.070 AS 17.38.087 AS 17.38.900 AS 17.38.084 AS 17.38.090 3 AAC 306.830. Seizure of marijuana or marijuana product. (a) The director, an enforcement agent, an employee of the board, or a peace officer acting in an official capacity, may seize marijuana or any marijuana product from a licensed or previously licensed marijuana establishment if the marijuana establishment has (1) any marijuana or marijuana product not properly logged into the marijuana establishment's marijuana inventory tracking system; (2) any adulterated marijuana food or drink product forbidden under 3 AAC 306.510(a)(4); or (3) any marijuana or marijuana product that is not properly packaged and labeled as provided in 3 AAC 306.465 and 3 AAC 306.470 or 3 AAC 306.565 and 3 AAC 306.570; (4) not renewed its license as required under 3 AAC 306.035. (b) If the director, an enforcement agent, an employee of the board, or a peace officer acting in an official capacity, seizes marijuana or a marijuana product under this section, the director shall update the marijuana inventory control tracking system to reflect the seizure and ensure that the seized items are stored in a reasonable manner. The director shall immediately give the marijuana establishment from which the marijuana or marijuana product was seized notice of the reasons for the seizure and the time and place of a hearing before the board. Unless the marijuana establishment from which the marijuana or marijuana product was seized requests a delay, the hearing will be held within ten days after the director gives notice of the reasons for seizure and the scheduled hearing. If the seizure occurs in connection with a summary suspension under 3 AAC 306.825, the hearing will be combined with a hearing on the summary 114 Register_, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 suspension. (c) If the marijuana establishment from which the marijuana or marijuana product was seized does not request or participate in a hearing under this section, or if, after a hearing the board finds that seizure of the marijuana or marijuana product was justified, the marijuana or marijuana product will be destroyed by burning, crushing, or mixing with other material to make the marijuana or marijuana product unusable as provided in 3 AAC 306.740. (d) If a seizure under this section is of marijuana plants in place in a licensed standard or limited marijuana cultivation facility, the seizure order may direct the cultivation facility to continue care of the plants until the hearing, but prohibit any transfer, sale, or other commercial activity related to the plants. (Eff. /_ /_ Register Authority: AS 17.38.010 AS 17.38.085 AS 17.38.100 AS 17.38.070 AS 17.38.087 AS 17.38.900 AS 17.38.084 AS 17.38.090 3 AAC 306.835. Hearing. (a) Except as provided in 3 AAC 306.825 or 3 AAC 306.830, any person aggrieved by an action of the director, an enforcement agent, or an employee of the board, may request a hearing in compliance with AS 44.62.390 by filing a notice of defense within 15 days after receiving a written accusation. Failure to file a notice of defense as provided in this section constitutes a waiver of the right to a hearing. (b) The Office of Administrative Hearings will conduct the hearing in compliance with due process, the Alaska Administrative Procedure Act, AS 44.62.330 — AS 44.62.630, and the applicable regulations adopted by the Office of Administrative Hearings at 2 AAC 64.100 - 2 AAC 64.990. (Eft: _/ /_, Register ___) Authority: AS 17.38.010 AS 17.38.085 AS 17.38.100 115 w v Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 AS 17.38.070 AS 17.38.087 AS 17.38.900 AS 17.38.084 AS 17.38.090 3 AAC 306.840. Civil fines. (a) The board may, in addition to any other penalties imposed under this title, impose a civil fine on a marijuana establishment, licensee, or person that the board determines has violated a provision of AS 17.38 or this chapter. (b) In a proceeding under 3 AAC 306.810 — 3 AAC 306.830, the board may impose a civil fine, not to exceed the greater of (1) an amount that is three times the monetary gain realized by the marijuana establishment, licensee, or person as a result of the violation, as determined by the board; (2) $10,000 for the first violation; (3) $30,000 for the second violation; or (4) $50,000 for the third or subsequent violation. (Eff. /_ /� Register W- Authority: AS 17.38.010 AS 17.38.085 AS 17.38.100 AS 17.38.070 AS 17.38.087 AS 17.38.900 AS 17.38.084 AS 17.38.090 3 AAC 306.845. Appeal. (a) An aggrieved party may appeal to the board regarding any action of the director, an enforcement agent, or an employee of the board charged with enforcing AS 17.38 or this chapter, including suspending or revoking a license, seizing marijuana or a marijuana product, or imposing a civil fine. (b) A person aggrieved by a final decision of the board suspending or revoking a license under this chapter, or imposing a civil fine may appeal to the superior court under AS 44.62.560. (Eti: /_ /_, Register 116 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 Authority: AS 17.38.010 AS 17.38.085 AS 17.38.100 AS 17.38.070 AS 17.38.087 AS 17.38.900 AS 17.38.084 AS 17.38.090 3 AAC 306.850. Surrender or destruction of license. A license issued under this chapter must be surrendered to the director, an enforcement agent, or an employee of the board on demand if the director or board so orders. A license issued under this chapter must be surrendered within 10 days after the marijuana establishment loses or vacates the licensed premises. If a license is destroyed, the marijuana establishment shall promptly notify the board. (Eff. /_ /— Register Authority: AS 17.38.010 AS 17.38.085 AS 17.38.100 AS 17.38.070 AS 17.38.087 AS 17.38.900 AS 17.38.084 AS 17.38.090 Article 9. General Provisions. Section 905. Public records 910. Refusal to sell marijuana 915. Exercise of authority 920. Death of licensee 990. Definitions 3 AAC 306.905. Public records. Marijuana establishment applications are public records. The board may, at the request of any applicant, designate materials confidential if they (1) contain proprietary information including trade secrets; or 117 w co Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 121112015 (2) are required to be kept confidential by any federal or state law. (Eff. _/_ /_ Register Authority: AS 17.38.010 AS 17.38.090 AS 17.38.900 AS 17.38.070 AS 17.38.100 AS 40.25.110 AS 17.38.084 3 AAC 306.910. Refusal to sell marijuana. Nothing in this chapter prohibits a licensee from refusing to sell marijuana or marijuana products to any person unless that refusal is a violation of AS 18.80.210. (Eff. /_ /_, Register Authority: AS 17.38.010 AS 17.38.084 AS 17.38.100 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.915. Exercise of authority. Until a marijuana establishment surrenders its license to the board, and so long as business is conducted under the license on the licensed premises, the person holding the license, whether an individual, a partnership, a limited liability company, a corporation, or a local government, is responsible and liable for the conduct of the business. Any individual exercising actual authority over the conduct of business on the licensed premises must be the holder of the marijuana establishment license, or an agent or employee of that person unless the board has approved a transfer of the license to a different person. (Eff. /_ /_, Register _) Authority: AS 17.38.010 AS 17.38.084 AS 17.38. 100 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 AAC 306.920. Death of licensee. (a) If an individual who is the sole licensee of a marijuana establishment dies, the marijuana establishment shall cease operation. A personal representative appointed by the superior court for the estate of the deceased licensee may submit 118 Register, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 to the director a written request to reopen the business, along with a copy of the court order appointing the personal representative. If the licensed marijuana establishment is in good standing, and the personal representative is not a person prohibited from holding a marijuana establishment by AS 17.38.100(i), the director shall grant permission to the personal representative to operate the business on the licensed premises subject to (b) of this section. In this section, "good standing" means the marijuana establishment (1) has a valid current license; (2) has paid all fees due under this chapter, and all local taxes due; and (3) has no unresolved suspension or revocation proceedings against it. (b) A personal representative authorized to operate a marijuana establishment under (a) of this section must submit an application for a transfer of ownership to another person in compliance with 3 AAC 306.045 within 90 days after obtaining the director's approval to operate. The board may extend the time allowed in this section for another 90 days if the personal representative requests the additional time. (c) This section does not authorize the transfer of a marijuana establishment license unless the board approves the personal representative's application for transfer of license to another person. (Eff. /_ /_ Register _) Authority: AS 17.38.010 AS 17.38.084 AS 17.38. 100 AS 17.38.070 AS 17.38.090 AS 17.38.900 3 ACC 306.990 is repealed and readopted to read: 3 AAC 306.990. Definitions. (a) In AS 17.38 and this chapter, (1) "affiliate" means a person that directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, a partnership, 119 w Register_, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 limited liability company, or corporation subject to this chapter, (2) "assisting" does not include (A) using, displaying, purchasing, or transporting marijuana in excess of the amount allowed in AS 17.38.020; (B) possessing, growing, processing, or transporting marijuana plants in excess of the number allowed in AS 17.38.020; (C) growing marijuana plants for another person in a place other than (i) that other person's primary residence; or (ii) a garage, shed, or similar place under the other person's control; (3) "delivering" (A) means handing to a person who purchases the product on licensed premises only; (B) does not include transferring or transporting to a consumer off licensed premises; (4) "flowering" means a marijuana plant that has visible crystals, buds, or flowers, or for which the exposure to light is scheduled with the intent to produce crystals, buds, or flowers; (5) "immature" means a marijuana plant with no visible crystals, buds, or flowers, and in which the exposure to light is scheduled with the intent to prevent formation of crystals, buds, or flowers; (6) "in public" (A) means in a place to which the public or a substantial group of people 120 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 has access; (B) except as provided in (C) of this paragraph, includes highways, transportation facilities, schools, places of amusement or business, parks, playgrounds, prisons, and hallways, lobbies and other portions of apartment houses and hotels not constituting rooms or apartments designed for actual residence; (C) does not include an area on the premises of a licensed marijuana retail store designated for on -site consumption under 3 AAC 306.305. (7) "personal cultivation" does not include (A) using, displaying, purchasing, or transporting marijuana in excess of the amount allowed in AS 17.38.020; (B) possessing, growing, processing, or transporting marijuana plants in excess of the number allowed in AS 17.38.020; (C) growing marijuana plants for another person in a place other than (i) that other person's primary residence; or (ii) a garage, shed, or similar place under the other person's control; (8) "possess" means having physical possession or control over property; (9) "registration" means "licensure," of "license;" (10) "transport" or "transfer" means to deliver between licensed marijuana establishments as provided in 3 AAC 306.750. (b) In this chapter, unless the context requires otherwise, (1) "adulterated food or drink product" (A ) means a product that is intended to be consumed orally and that 121 A 0 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 existed without marijuana in a form ready for consumption before marijuana was added by any process; (B) does not include raw ingredients that are combined with marijuana in a manufacturing process; (2) "agent" (A) means a representative who is authorized to act for a licensee, the board, or the director; (B) includes a contractor or subcontractor; (3) "batch" or "harvest batch" means a specifically identified quantity of plant trim, leaf, and other usable product from marijuana plants that are uniform in strain, cultivated in one place and under the same conditions, using the same medium and agricultural chemicals including pesticides and fungicides, and harvested at the same time; (4) "bud and flower" means the hairy, sticky, or crystal - covered parts of mature female marijuana plants generally harvested for their high potency content; (5) "business day" means a day other than a Saturday, Sunday, or a state holiday; (6) "CBN" means cannabinol; (7) "CBD" means cannabidiol; (8) "CBDA" means CBD Acid; (9) "clones" or "cuttings" means small starter plants (A) shorter than eight inches tall; and (B) used to propagate marijuana plants; (10) "compensation" (A) means money, bartered objects or services, or anything else of value, 122 Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 whether given as payment or voluntarily as a donation, when accepted by a person who gives, distributes, or delivers marijuana to another; (B) includes a cover charge, a delivery charge, and a packaging charge; (] 1) "concentrate" or "marijuana concentrate" means resin, oil, wax, or any other substance produced by extracting or isolating cannabinoids, THC, or other components from a marijuana plant or from materials harvested from a marijuana plant; (12) "consumer" (A) means an individual who purchases and uses marijuana or a marijuana product; and (B) does not include any marijuana establishment that re-sells marijuana or incorporates marijuana into a manufactured product; (13) "contaminant" means one or more of the following: (A) harmful microbials, including Bscherichla tali (E. colt), or Salmonella species; (B) residual solvents; (C) poisons or toxins; (D) harmful chemicals, including pesticides; (E) dangerous molds, mildew, or filth; (14) "controlling interest" means ownership or control of (A) 50 percent or more of the ownership interest or voting shares of a corporation; or (B) less than 50 percent if a person and family members jointly exert actual control as demonstrated by 123 A Register, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 (i) making decisions for the corporation without independent participation of other owners; (ii) exercising day - today control over the corporation's affairs; (iii) disregarding formal legal requirements; (iv) using corporation funds for personal expenses or investments, or intermingling corporation finances with personal finances; or (v) taking other actions that indicate the corporation is a mere instrumentality of the individual; (15) "distribute" means spread out or pass out among several or many members of a group; (16) "edible" and "edible marijuana product" (A) means a marijuana product that is intended to be consumed orally, whether as food or drink; (B) does not include an adulterated food or drink product; (17) "extraction" or "marijuana extraction" means production of marijuana concentrate by any water - based, food - based, or solvent -based method; (18) "homogenous" means a component or quality, such as THC, is spread evenly throughout the product, or can be found in equal amounts in each part of a multi- serving unit; (19) "individual" means a natural person; (20) "in -house testing" (A) means laboratory testing as provided in 3 AAC 306.635; (B) does not include consumption of any marijuana or marijuana product Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 on the licensed premises; (C) does not meet the requirements of 3 AAC 306.645; (21) "licensed" (A) means holding a current and valid license that the board has issued under this chapter, (B) does not include holding a formerly valid license that has expired or that the board has suspended or revoked; (22) "licensee" means each individual identified in 3 AAC 306.020 who must be listed in an application for a marijuana establishment license under this chapter, (23) "licensed premises" means any or all designated portions of a building or structure, or rooms or enclosures in the building or structure, at the specific address for which a marijuana establishment license is issued, and used, controlled, or operated by the marijuana establishment to carry out the business for which it is licensed; (24) "lot" or "production lot" means a group of marijuana products that were prepared at the same time from the same batch of marijuana, using the same recipe or process; (25) "marijuana" has the meaning given in AS 17.38.900; ('26) "marijuana cultivation facility" has the meaning given in AS 17.38.900; ) (27) "marijuana infused product" (A) means a product that contains marijuana or marijuana concentrate and is intended for human use; (B) does not include bud and flower marijuana; (28) "marijuana plant" means a living organism of the genus Cannabis capable of absorbing water and inorganic substances through its roots, and synthesizing nutrients in its 124 125 A N Register 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 leaves by photosynthesis; (29) "marijuana product' has the meaning given in AS 17.38.900; (30) "marijuana product manufacturing facility" has the meaning given in AS 17.38.900; (3 1) "peace officer" has the meaning given in AS 01.10.060; (32) "person' has the meaning given in AS 01.10.060; (33) "process" or "processing" means harvesting, curing, drying, trimming of a marijuana plant; (34) "propagate" means to.cause a marijuana plant to grow by planting clones or cuttings, and nurturing them into viable plants up to 8 inches in height; (35) "recreation or youth center" means a building, structure, athletic playing field, or playground (A) run or created by a local government or the state to provide athletic, recreational, or leisure activities for minors; or (B) operated by a public or private organization licensed to provide shelter, training, or guidance for persons under 21 years of age; (36) "retail marijuana store" has the meaning given in AS 17.38.900; (37) "square feet under cultivation" (A) means an area of the licensed premises of a standard or limited marijuana cultivation facility that is used for growing marijuana, measured from the perimeter of the floor or growing space for marijuana; (B) does not include a processing or storage area, an equipment storage area, an office, a hallway, or another area, if that area is not used for growing marijuana; 126 Register r, 2016 COMMERCE, COMMUNITY, AND EC. DEV. Final Adopted Regulations as of 12/1/2015 (38) "THC" means tetrahydrocannabinol, the main psychoactive substance found in marijuana; (39) "THCA" means THC Acid; (40) "transaction' means one single occurrence in which marijuana or a marijuana product not exceeding the limits set out in 3 AAC 306.355 is passed from a licensed marijuana establishment to another person. Eff. _2/24 /2015, Register_ amended / Register_ Authority: AS 17.38.010 AS 17.38.090 AS 17.38.070 AS 17.38.100 127 AS 17.38.084 AS 17.38.900 w KEY: 0 = Use Permitted Outright iH = Home Occupation C = Conditional Use Permit Required P = Administrative Permit Required Blank = Use Prohibited Land Uses Allowed Table Possible marijuana uses and locations -- (Outside of Buffer Zone) Districts: Principally Residential Principally Commercial Principally Public Uses RR R1 R2 R3 UR OR AC HC CB I RM INS P Business, retail sales and service 0 0 0 0 Business, package liquor 0 O 0 Manufacturing - Noxious, heavy C Manufacturing, light fabrication, assembly C 0 Agriculture 0 Greenhouse /nursery -- commercial .0 0 0 * There is currently no Lab /'Testing Facility category in City Code. blank or a create new category / definition) • 15.10.140 Definitions: Agriculture. Commercial farming, dairying, pasturage, horticulture, floriculture, viticulture, or animal and poultry husbandry including buildings used to shelter farm implements, hay, grain, poultry, livestock or other farm produce in which there is no human habitation and which is not used the public. estock Business, general sales. A premises where the sale of goods or commodities to the consumer takes place; i.e., groceries; bakeries; hobby, knot or yarn shops, book, gift or apparel shops; fishing equipment, hardware or vehicle sales; restaurants; vehicle rentals or variety stores. Greenhouse, commercial. A light- permeating structure used for cultivating and growing plants in a controlled temperature and humidity environment where such plants are offer premises or at another location. ed for sale either on the Manufacturing, heavy. A use engaged in the basic processing and manufacturing of materials or products predominately from extracted or raw materials; or a use engaged in storage of or manufacturing Processes using flammable or explosive materials; or storage or manufacturing processes that potentially involve hazardous or commonly recognized offensive conditions. Manufacturing, light. A use engaged in the manufacture, predominantly from previousl y prepared material, of finished products or parts, including processing, fabrication, assembly, treatment packaging, incidental storage, sales and distribution of such products, but excluding basic industrial processing. 144 145 Y AV� Legend 500 ft Buffer - Churches and Correctional Facilities 1000 ft Buffer - Schools 'hoof, Church and Correctional Facility duffer IVlap to different data sources property lines and aerial fiery do not overlay correctly. Map is to be used for ntation and reference purposes only. 3/8/2016 N Drawn By: GAG In # 0 600 1,200 2,400 Feet I' Legend i - 500' Marijuana Buffers 1000 ft Buffer - Schools T _ N ; 6j. j y I L- i r% i ,� r Aq t 4 Jt ... =:.�.. City of Seward Zoning Map FR�°`•?` .,•2�".' w'... Lam... O� mss..... ��v..�., >a ,` u as + LYw Owr 147 y as std .Q. To: James Hunt, City Manager Thru: Ron Long, Assistant City Manager Eddie Athey, Fire Chief, Seward FD City of Seward Fire Department P.O. Box 167, Seward Alaska 99664 Physical Address: 316 Fourth Avenue Email address: sewardfd(cDcityofseward.net Telephone: 907 - 224 -3445 Fax: 907 - 224 -8633 8 March 2016 Subject: Marijuana Industry Code Impacts From: Robert Mathis, Deputy Fire Chief, Seward FD 11,V0 Regarding marijuana industry operations within the City of Seward, all aspects of the industry regulation pertaining to occupancy classification, permitting and inspections are currently addressed in 3 AAC 306.005 thru 3 AAC 306.990, Alaska State Administrative Code 13 AAC 50.010, the City of Seward Code of Ordinances and /or the International Building, Fire, Residential, Electrical or Plumbing codes as adopted by the State and /or the City. The impact of enforcement and ensuring code compliance is negligible. With regards to marijuana processing systems for concentrate (closed -loop systems), they are addressed in 3 AAC 306.555 (b) (3) and (c). We can /should address these specific systems by addition to the City of Seward Code of Ordinances. Our recommendation is that this addition be added to Title 9 Health and Safety. Proposed language is as follows; Extraction equipment using hazardous materials shall be listed or approved. Approved systems shall include the following: Manufacture Model Solvent type Emotek Lab Obe LPG /Butane APEX Supercritical 1500 -1 L, 1500 -20L, 5000 -5L, 5000 -20L CO2 Waters Corporation SFE 2X5 CO2 Extraction Tek Solutions 1300 LHBES, 1300/C LPG /Butane Isolate Extraction System ISO -CD 2500, ISO- CD5000, ISO- CD10000 CO2 MC Machinery The Incredible Extractor LPG /Butane APEX Supercritical 1500 -20 LE, 1500 -5 LE CO2 Eden Labs 5L 2000, 20L 2000 CO2 Isolate Extraction System LP 1000, LP 250 LPG /Butane Delta 9 B 1000 LPG /Butane As new systems are identified and approved they may be added to the above list. Where no equipment listing criteria exist and for non - listed extraction systems, equipment manufactures' can submit a Master Engineering Report for approval of their equipment. This approval method has typically only included liquidified petroleum gas (LPG) /Butane and CO2 equipment; listings have been available for flammable liquid extraction equipment. The Alaska licensed Professional Engineer is required to prepare a site specific report that identifies all applicable standards and verifies the installation meets all applicable AME and NFPA Standards for operating pressures it will be subjected to, has pressure relief devices on any trapped gas sections, and that all hoses, fittings, vacuum pumps, etc. are compatible with the specific flammable gas used in the equipment prior to final approval of equipment for use. The letter shall identify that the equipment onsite meets the approved master engineering report and additionally include the location address, make and model number, serial number, and any other pertinent information specific to that equipment. The engineering report is required by the Seward Fire Code 5305 and shall be signed and sealed by the responsible Alaska licensed Professional Engineer. All equipment shall be operated strictly in accordance with the manufacturer's instructions. Any modification of equipment from the approved engineering report / listing (i.e. repiping the system, addition of pumps, replacing components, using unapproved gasses, etc) voids the approval of the extraction equipment. w:,-4c S E 5`.; i C.)0 , • ,3 / -1Iic2 icxwNl J7' ) .4New N102 �I 101 (New), N101.1 (New), N101.2 (New), N101.3 (New), N101.4 (New), (New), N102.1 (New), N103 (New), N103.1 (New), N103.1.1 (New), N103.1.2 (New), N103.1.2.1 (New), N103.1.2.2 (New), N103.1.2.3 (New), N103.1.2.4 (New), N103.1.2.5 (New), N103.2 (New), N103.2.1 (New), N103.2.2 (New), N 103.2.3 (New), N104 (New), N 104.1 (New), N 104.1.1 (New), N 104.2 (New), N104.3 (New), N104.4 (New), N104.5 (New), N104.6 (New), N104.6.1 (New), N104.6.2 (New), N104.7 (New), N104.7.1 (New), N104.8 (New), N105 (New), N105.1 (New), N105.2 (New), N105.2.1 (New), N105.2.2 (New), N105.2.3 (New), N 105.2.4 (New), N 105.2.5 (New), N 105.2.6 (New), N 105.2.7 (New), N105.2.8 (New) Proponent : William Winslow, representing Self (will-winslow@comcast.net) 2015 International Fire Code Add new text as follows: APPENDIX N Marijuana Growing and Extraction SECTION N101 ADMINISTRATION N101.1 Scope. Marijuana growing and extraction shall be in accordance with this chapter, the International Building Code, and the International Mechanical Code. Cryogenic fluids shall comply with Chapter 55. Compressed gases shall comply with Chapter 53. Flammable and combustible liquids shall comply with Chapter 57. Hazardous materials shall comply with Chapter 50. LP-gas shall comply with Chapter 61 and the International Fuel Gas Code. N101.2 Application. The requirements set forth in this chapter are specific to marijuana growing and extraction and shall be applied as exceptions or additions to applicable requirements set forth elsewhere in this code. N101.3 Multiple hazards. Where a material, its use, or the process it's associated with poses multiple hazards, all hazards shall be addressed in accordance with Section 5001.1 and other material specific chapters. N101.4 Permit. A permit shall be required as set forth in Section 105.6.21. SECTION N102 DEFINITIONS N102.1 Definitions. The following terms are defined in Appendix N. Carbon dioxide room. A room for the storage and use of carbon dioxide that supports marijuana growing. Extraction. The removal of oils and fats from marijuana plants by the use of a solvent, production of miscella, distillation of the solvent from the miscella, and solvent recovery. Extraction room. The room in which marijuana oil and fat extraction occurs. Miscella. A mixture, in any proportion, of the extracted oil or fat and the extraction solvent. Solvent. A substance that can dissolve marijuana oils and fats. Winterization. Separation of cuticle wax from oils and fats in a polar solvent by freezing and filtration. SECTION N103 CONSTRUCTION N103.1 Extraction Rooms. N103.1.1 Location. An extraction room shall not be located in any building containing a Group A, E, I, or R occupancy. N103.1.2 Extraction room. An extraction room shall comply with Sections N103.1.2.1 through N103.1.2.5. N103.1.2.1 Other Uses. An extraction room shall have no other uses. N103.1.2.2 Egress. Each extraction room shall be provided with at least one exit discharge or door from an exit access to an exit. The door shall swing in the direction of egress and be provided with panic hardware. N103.1.2.3 Facility egress. Extraction rooms shall not enter directly into an exit where the exit is the sole egress path from another portion of the building. N103.1.2.4 Ventilation. Where hazardous materials or carbon dioxide are used for extraction, a ventilation system shall be provided in accordance with Section 5004.3. N103.1.2.5 Explosion control. Explosion control shall be provided when required by Section 911. N103.2 Grow rooms. N103.2.1 Ventilation for light fixtures. Ventilation ductwork for light fixtures shall be installed in accordance with the manufacturers instructions and the International Mechanical Code. N103.2.2 Odor Control. The use of ozone generators for odor control shall be in accordance with Section 6005. N103.2.3 Hanging Plastic. The hanging of plastic from ceilings or suspended overhead supports to create wall dividers shall not be permitted. SECTION N104 EXTRACTION N104.1 Staff and training. Extraction shall be continuously staffed by personnel trained in the process and emergency procedures. Training records shall be maintained. N104.1.1 Fire safety and evacuation plan. A fire safety and evacuation plan shall be provided in accordance with Section 404.2. N104.2 Revised permit. Prior to changing the extraction solvent, application for a revised operation permit shall be submitted to the fire code official for review and approval. N104.3 Post extraction purification and winterization. Post extraction purification and winterization shall be performed in an appliance listed or approved for that specific purpose. N104.4 Industrial ovens. Industrial ovens shall comply with Chapter 30. Exception: An automatic fire extinguishing system shall not be required for batch-type Class A ovens having less than 3.0 cubic feet of volume. N104.5 Continuous gas detection. Where hazardous materials gases or carbon dioxide are used for extraction, a continuous gas detection system shall be provided. The gas detection system shall activate at no greater than 25 percent of the lower explosive limit, 25 percent of the threshold limit value, or 5000 ppm for carbon dioxide, whichever is lower. N104.6 Interlocks. Safety interlocks shall be provided in accordance with Sections N104.6.1 and N104.6.2. N104.6.1 Electrical. All electrical circuits and devices within the extraction room shall be interlocked to shut off if the ventilation system required by Section N103.1.2.4 fails to operate as indicated by a static pressure sensor located at the most remote point in the system. Exception: Gas detection, emergency alarm, exhaust ventilation, and emergency lights shall not be shut off. N104.6.2 Gas supply. Where hazardous materials gases or carbon dioxide are used in the extraction process, an automatic emergency shutoff valve shall be provided at the gas source._ This valve shall be fail-safe and shall automatically close if the gas detection system malfunctions or activates. N104.7 Standby or emergency power. Standby or emergency power shall be provided in accordance with Sections 5004.7 and N104.7.1. N104.7.1 Fuel supply. The standby or emergency power fuel supply shall have sufficient capacity to allow safe shutdown of extraction plus an additional two hours of operation. N104.8 Exhausted enclosure. Equipment containing hazardous materials or carbon dioxide shall be located within an exhausted enclosure designed, constructed, and operated in accordance with Sections 5003.8.5.1 through 5003.8.5.3. SECTION N105 OPERATION OF GROW ROOMS N105.1 Fumigation. Fumigation shall be in accordance with Chapter 26. N105.2 Carbon dioxide enrichment. Carbon dioxide generators with the capacity to raise the carbon dioxide level to greater than 5000 ppm in the grow room, or gas systems with more than 100 pounds of carbon dioxide shall comply with N105.2.1 through N105.2.8. N105.2.1 Carbon dioxide room. Carbon dioxide containers and generators shall be located outside or in a room with no other use. N105.2.2 Fuel fired appliances. The products of combustion from fuel fired appliances shall not be used to provide carbon dioxide for grow rooms. N105.2.3 Protection from damage. Carbon dioxide systems shall be installed so the tanks, cylinders, piping, other appurtenances are protected from damage. N105.2.4 Gas detection. Gas detection shall be provided in carbon dioxide rooms and in grow rooms that use carbon dioxide. The gas detectors shall activate when the carbon dioxide level exceeds 5000 ppm. • N105.2.5 Gas detection operation. When the gas detector activates, it shall function as follows: 1. Turn off the carbon dioxide generator or close a fail-safe automatic shutoff valve at the carbon dioxide supply. 2. Activate audible and visual alarms located inside and outside of the grow room. N105.2.6 Pressure relief devices. Carbon dioxide pressure relief devices shall be vented to the building exterior. N105.2.7 Signs. Warning signs shall be posted at the entrance to each area using or storing carbon dioxide. Signs shall not be obscured or removed, shall be in English as a primary language, shall be durable, and the size, color, lettering and warning statement shall be approved. N105.2.8 Ventilation. Carbon dioxide rooms shall be ventilated in accordance with Section 5004.3 Reason: Growing marijuana and extracting the essential oils has been legalized in some states and the likelihood is that more states will follow suit. In addition, Canada is close to legalizing the marijuana industry. In Washington State, w here it is legal, code officials have been w riting specific code language to regulate the growing and extraction of marijuana, which requires the storage and use of hazardous materials. This proposal evolved from the work done in Washington. It is different in that it is specific to marijuana, reorganized, relies more on references to existing code sections, and adds some technical requirements. Cost Im pact:Will increase the cost of construction This proposal w ill increase the cost of grow ing and extracting marijuana. Currently there is no national standard specific to this industry. In many cases, basic safety requirements are not being met, such as gas detection and shutoff, exhaust ventilation, proper storage of solvents, and listing or approval of equipment. It is likely that providing these safety systems and approvals w ill increase the cost of construction. VJpleg 5 1a!J 3 I iy/l (0 LA-9 b014l\) 3/7/2016 (Scow l tres) Cannabis Extraction :, Background : ie- ,? Concentrates and Infus' Chief Compliance LLC.and Regulatory Officer,Nuka 1$ f Fd �i� Chief Com Enterprises, Director of Infused Products,LivWell i p l r Products: A Colorado ��`� , tepaynnoe Ed, °gintra `� M ,�.� � htt „��mnte �� hl[ps„ y}ane tom/news/exclus NeannaaKirig. leals:byanoop Perspective Denver Department of Environmental Health Public .• Health Inspections Division •,, ,,,y." - Emlronmental Public Health Investigator Ill O ad inv lhtmtorforanoodbern,Illness a Foodborne imm i J Invdino etiggator for Marijuana Camdain[agRbr<ak y e ga —44.c.:"74- r Rocky Mountain Food Safety Board Member Presented by Thuy W ~a .�"-N ... • Western Association of Food and Drug Officials i fey;.+r ?� Northwest Food Processors Food and Beverage Expo Chief Compliance and Regulatory Officer t»y•. ,yam• http://archive.9news.comlrss/story.aspofstor yld•326167 Nuka Enterprises,LLC �' 4 C°1,' v http://kdvccom/2014/11/05/healthinspector-finds. • " � � '. � '•�, critical-violations-m-heidihemmats-kitchen-would-your- State of Alaska : kitchen-pass/ _ „ rie Anchorage,AK "^ • Vpp.;t•do c-m212,re-9/reea-mt-hnrsDEN V E R 0„i standards/ March 10,2016 % ok THE MILE HIGH CITY ;%; ,., < : cer THE MILE HIGH CITY Types of Marijuana Licenses ` • Approximately 5000+regulated food establishments,1000+marijuana ope Denver • Denver Regulatory Agencies in Denver „� ,,, i.f • Department of Environmental Health:Environmental Quality rt Public Health Ins. _ • Denver Public Health • Husbandry/Optional Premise Cultivation(OPC) Denver Fire Department ;, • Medical Cultivation Facilities:368 • Department of Excise B Licenses:Denver Police Department,Vice rt Drug Control Bur • Retail Cultivation Facilities:195 Communi Plannin 8 Develo merit: Buildin De ortment(en ineerin lumbin h e= ty 8 P 4 P 4 4,P B Developmental Services,Neighborhood Inspection Services/omng,Wastewater Engf- • Marijuana Infused Products Manufacturing(MIP) • Colorado Regulatory Agencies • Medical: 85 g --. Colorado Department of Revenue Marijuana Enforcement Division • Retail: 145 • Colorado Department of Public Health and Environment 4. Colorado Department of Agriculture Dispensaries *, --. a ' • Medical: 205P&L •;�' -�' ^" • Recreational: 42 w `.a a Marijuana Testing Facilitiest. r '. Retail: B - I 3/7/2016 Role of DEH Public Health Inspections with Marijuana HUSBANDRY/OPTIONAL Infused Products Manufacturer PREMISE CULTIVATION • Conduct and approve plan reviews f. a • Approve business licenses for marijuana infused products manufactur ,„,_ _• (MIPs),dispensaries and testing facilities . ,.., • Apply Denver Food Establishment Rules and Regulations • Investigate complaints&outbreaks ? 1 , • Timeline: t' s , • 2010:Legalization of medical marijuana in Colorado ;, • - 'T • 2011:Conducted routine inspections of MIPs,dispensaries&testing facilitlea,:,,,, m � #i ' • 2012&2013: Complaint-based Investigations due to resource constraints `' y • 2014:Legalization of recreational marijuana in Colorado • 2014 to present:All MIPs,dispensaries&testing facilities receive 2 fullf •- annually • 2015 to present:Conduct complaint-based inspections of OPCs for. • application. 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' Oohs,* subspecies is used to create 5.Sahva a 5. "/ ,'T. (` H v r r indica hMxldl nth select desired had. ; t y ' 's 44 1.'r'f ,P __ �.�v u ._ wrw:ll'pes.ol{VeMf.ORG I. u,. " . CANNABRIOIo BENEFIT Terpone Profile Cannabinoids �, Terpenes/Terpenoids ,e`11C1� MC■ psy5nmra,K.punkda. i,g C'i.:aala(Eucalyptol) ^� arnrmllartnatmy. (-)C.ryophyhienr TNCA I Mn mcsobu! TEMPS E wEMErIT MOMw aa-Finesse ........ ... b no.i um..n ory C+n n Crmpbette ........_. CBg. relieve many o nn«n..n :, -)ft-f Irene I mmvkims.dapaunn. �" ••"•y' i # f t .Y`'°""•+N" rdb lice and nww 7N,,,�. {f-Mvy gel r f f > °q a .i,...,w�. Ana seep ski and ^ii "„�i'o`•" s ou. eRw.re 6s-(3 Jlaa(l' a 0 /� /� o b misses .q� o i�.,.��•W iw.:���.°°....,..r e.��iY."w m-1-...).......... annulay l t i y a ,� 1 \ ! -, Inns neon..P+muM ®_, Ilmgli ..r�+z ..nwn.n..ia'..».. ..^.n.0-- a-(Nm user e beateaW raliuz ,,,u PC]nn.me AI CBG"mm on.nutty n 0 .'r. R-Tan m tc ^r.rV.ne.m. n.Wunae: Ter�plMseM CSC PvNde muscle inuis limited n uea�e. 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CON. kg.gfidtnny0 enlivens aov ti(_)L.ia.».......• KIISY/fang s.eiaa» cat r.....a.w COM Posers tract ,,S`Vo"Tiirna *Trsanpw..m aey ar«n + Tr loco 1w1 or, 1IIryvamsl 13nor.lie ane wavnio«i w rn... treaMfterpin tmn w a+rm, I.-s-Cla.6hk Mii ,.,a n'.w.<.n sine's..." 5 3/7/2016 Visualization of the Endocannabi • Mari Juana vs? Signaling System IaK tom. ! i.1 . fell bAODE-4RHJ 1 ©'IDE HMG) pLANV IF CO2 Enrichment in OPCS tNDUSTLAL TLXTILLS PAPER BULO,NG MAT tRIALS FOODS .NOtfS�Pia;. PrOdhg pe4 needeate Sahel OC PRODUCIS pie enethesedeh Leper fnetaten. Merger* Orates l r �,aegaassuas u;a oas wieasre Typically growers use a generator or hpteeeHr Cement (Memna, Cestmarelneemerm s„,.aMenet Conwncae TT,. compressed CO2 to elevate CO2 levels to carps Menne MWng Gam, mo,. Muer bTempest )5 make plants grow faster AVO Met Beat (PUP) THC nge • Typical range is 1,500 ppm or less of CO2 in • DanunNrdf a melded Hens M ' &aaet(w,rn[reeps Fibers errx PERSONAL grow rooms es..., LEAVES HYGIENE S <, CONSUMER.TEXTILES FLOWERS • OSHA Permissible Exposure Limit (PEL)in 8- TWArTI t HOMPceed - ''''''''C''''Comrade hour time-weighted average (TWA)for Dimes et, � "+ ' human occupancy is 5,000 ppm s..,,x xe STALK 4 -I''' '' seeps • 40,000 ppm CO2 is the Immediately Fee Newts li , Seed Dangerous to Life and Health Concentrations r (IDLH)bythe National Institute for AGRICULTURAL eEHaPirs ` Cake weed Sseression ae"*"4 Occupational Safety and Health (NIOSH) tats need for peste lea than most crews *Asia Rentz Phlteemiell atter Pad R awn HEMP Roller sane • CO2 alarms are required and set to alarm at ` SOTeurovementmcropRealer 5,000 ppm Deep load arc naletal sod actalcrs i CELL FLUID AOTaa,ve erieLmssIs l y "-" t r,, FIRE Ir DEPARTMENT 6fN EA aWtUA.,.l- ,,.✓f�f9f�' �..,,,��r 3'R; 6 3/7/2016 er,MARIJUANA GROWING OCCUPANCY HAZ. '' MARIJUANA GROWING OCCUPANCY HAZ • CO2 Generators , . E , • nrichment • Natural gas fueled vs Propane A,.` i CO2z using • HAZARDS compressed gas Potential Elevated CO2 level ;~ ;, • I „ •iio�, Potential Elevated CO level ,� � Generator Pw _ JP • HAZARDS P+aPa 4,, •7 �. ...r� Potential Elevated �: a ' A,,::‘- level �A� FIRE ETRE,.,mn r DEPARMENT Tii y a �r ,,.,,.. ,,'+,,' 'fix.� DEPARTMENT �3 MARIJUANA GROWING OCCUPANCY HAZ MARIJUANA GROWING OCCUPANCY HAZ • Compressed CO2 Enrichment Equipment • CO2 Detection Et Notification Eat�.r' r ber t'. tit .,e trobe% � t oroamf u a¢ ACUADEIICTE°TE ROOM 41 u ; Emergencyshut off focal valve valves ., I, . Qetec for i•• s *� FIRE•.:,,, ,,,w.,,,.:,:‘,..1' " n.$ FIRE ,, DEPARTMENT �0 DEPARTMENT r ,, ntHvre w•uc SA$OV 3/7/2016 MARIJUANA GROWING OCCUPANCY HAZ' a CO2 Enrichment Placards Et Signage • CO Detection Ft Exhaust : It.7, 0 an prRrill e„A.115[� DEPARTMENT �z ` 1 L native*rou.,c SA4111v X63 a =' .t, Unapproved Wall Multi-level Grow Operation Construction in OPCs ter ,....„1:. ..40 4" y _. •of itta- 1111:11.11 ',' .. o, y ' , w i 1 Iii 41 }� +rS ss 1Mry66162016 8 3/7/2016 Unapproved Grow Pods in OPC :0,.:''''''' Shattered �„ , i , -:;' '1'1P-..,... lli',, ''4 s Light , ' ,,,:., : ' ''',,Eq;::‘,.:.::17, .meg s .41111111111111111111100.. NIMOW Cause for Concern It's getting hot in here... irl$ w. �.... SS- 9 3/7/2016 Extractions ' ',..,:'' MARIJUANA INFUSED PRODUCTS MANUFACTURER -4 4111- '.. 0,: .0* 0 .,2:, . . , 0 •• - • :j ♦ - r.... o .: • „ 1, • sir "€ ,gir S x Cannabis Concentrates Cannabis Concentrates ra--: ..,„. r ...-..:"......:...,..... N . 1 '1,”'IS:-. ''''' i '.., - i • Kief(mechanical or Bubble hashHashish Live Hash oil Hash oil Live resin Has dry ice extraction) (ice water extraction) (CO2 extraction) (CO2 extraction) (Fresh frozen) (Hot water ction a,>. r„ c to w th o (Butxtact ,...,,difroilm openane blastinerg)ion Alcohol Agave Alcohol Et Glycerin w ,.m, (Tinctures from Ethanol Extraction) 10 • 3/7/2016 a „ Cannabis Concentrates ,..-40, Extractions ---'4; • Fire Permit and approval of closed loop 'm "�i a x` plisilDr extraction equipment is required >~ t r" e..5 n� a ;% • Alcohol extractions must be enclosed within +k ., '4' 7'. � -1 . 4 ? an explosion proof fume hood r •• +� s*' :x ,p '`"" l � • UL/ETL certification of all equipment w"`T"�': - a /` s " • Low level exhaust at 1 CFM/sqft of room ' •wu, '"" • Electrically unclassified location .' • =0 i1 • 2 Main Categories of Approved Extraction i Methods 4144 a Non•Hydrocarbon Extractions "� P Cold/hot water filtration <. : ,': • Isopropyl alcohol/Isopropanol Ethylalcohol/Ethanol �. r Acetone .. • CO2/dry ice Dry sieve ";,,.... • Hydrocarbon Extractions t .. ,., , Illirei:419 " �' _ -,. • Butane Propane.heptane k Steps for Extraction Equipment Approval Denver Fire Approved Extracto �t i MANUFACTURER MODEIq Solvent xis=; Ifii 1 EmoteklabsObe LPG y 2 APEX Supercritical 1500-11,1500-51,1500-2015000.51.,5000-20L CO2 .r K —,-„...- 3 Waters Corporation SFE 2X5, CO2 — 4 Extraction Tek Solutions 1300 LHBES 1300/C LPG "' "" „.."= — 5 Isolate Extraction Systems lS0{D2S001SO-CDS0001S0-0010000 "''_ : _J 6 MC Machinery the Incredible Extractor P, ,, „„ 7 APEX Supercritical 1500-201E&1500-SLE LG2 8 Eden Labs gi 2000&201 2000 G.,2 .° ..... 9 Isolate Extraction Systems LP1000&LP 250 .F `^ - '' - —® 10 Delta 9 t1000 .Pr.s. "Ol/21/JSThis lista not all inclusive an0 is subject to change An updates list can be/owM on www.aenvereov.ore/hre0epartmentirireCrepartmentHome/Pennitstscemina/FireSa/etpermas/tabrd/a nwyv„se.JCJn .�„m+o-mre 11 3/7/2016 UL/ETL-Listed or Approved by Chapter 39: New 2015 Fire Code Professional Engineer Chapter for Marijuana Operations " Pend SECTION 3901 7 _ GENERAL 3901.1 Scope.This section shall apply to all occupancies 2015 " engaging in marijuana(i.e.cannabis and extract "•' clAS j derivatives)sales locations,growing,processing, ExT114CTtoNTEKso extraction,and/or testing.These occupancies shall comply r MODEL roNs with this chapter and other applicable provisions of this 4,4•.;; trrers 7310 MAIC pyo zsa�xr p Code. 5ERIA a E7(914b MAX TOM .zs•r i- 3901.2 Permits. Permits shall be required as set forth in _ '''',.^0......".Z.'• � gq Section 105.6 and 105.7. .......... *ow t3 3901.3 Existing Operations. Buildings containing existing / ." /y ., growing or extraction operations shall comply with this - 1033-2 � code by October 1,2016. -'"- 01.,idithitdilliki) FIRE e DEPARTMENT (� MINIR MAIM WIRT tl,u,,YUJ61Y1! t"" Types of Extractions Requiri CLASS I, DIVISION 1 VS. CLASS I, DIVISI Explosion Proof Equipment ,,. • Materials have been placed in groups based on their ignition temper. Division Definitions Per NEC article 500, CEC se, and explosion pressures. In which ignitable concentrations of haz. Flammab - exists under normal operation conditions 4,r ' Class Division Group - material , Division 1 where hazard is caused by frequent maint. e or repair work or frequent equipment failu •Propane li In which ignitable concentrations of hazardstje Division 1 •Butane ll Class Ia 2 D •Ethanol handled, processed or used, but which are Division 2 normally in closed containers or closed systems from which they can only escape through accidental rupture or breakdown of such "`'` —..,°„ containers or systems. 12 . 3/7/2016 ALCOHOL EXTRACTION, DISTILLATION BUTANE AND PROPANE EXTRACTIONS �,:,-, AND REFINEMENT y • Proposed 2015 Denver Fire Code Amendment for Extraction Rooms • Proposed 2015 Denver Fire Code Amendment for Flammabl +: Extraction Rooms • Class I Division I Electrical in room, booth or ho, , 4 Class I Division I or 2 Electrical per Chapters 50 and 57 an • Grounding and Bonding of Metal equipment i • Hazardous Exhaust System with capture/containment for processes> 5 gallons. • Hazardous Exhaust System in room, booth or hoo, - Exception 1: Chemical Fume Hood as defined in NFPA4 • Emphasis on Capture ti Containment provisions distillation process<5 gallons IMC 510 • Exception 2: Solvent distillation units per Chapter 57 • Non-combustible dedicated room construction Exception 3: Extractions performed under city ordinance requirements • Non combustible dedicated room construction requirements e�Cc-t in post oil processing , •i Extraction room door to swing in the directs E 6s Extraction room door to swing in the direction of egress • Fire suppression in room and ductwork "_ • Fire suppression required when vapors>25%LFL • LPG gas detector with local alarm „3' • No detection required E. tnuy vu iamie a -...�^,,..� SI „.�, �,�., Dry Ice Hash or Kief Approved Extraction Metho , Non-Hydrocarbon Extractions ' 'e ., • Cold/hot water filtration i,. • Isopropyl alcohol/Isopropanol • Ethyl alcohol/Ethanol • Acetone • Supercritical/Subcritical CO2 • Dry ice • Dry sieve Hydrocarbon Extractions • Butane, propane, heptane 13 3/7/2016 Bubblehash !' Pf jjL/ �` Butane and ,;,t �4 r): Propane .. % Itt ....- - '.0 Extractionsz r .: . • �. _. 4. :: • 1Mry Yu ibM,6 IIIMMIE 250 — —100'6 Propane-0°b Butane —70'1 Propane-304th Butane � . - _ y ' °`^ - s ,�-;,; 200— 50%Propane-506 Butane ' — 3041 Propane-7046 Butane y a Q �q In — —0%Propane-100%Butane 11.2' w — . a ' t - m 150 a 100 � ,x. „„tea.{ tl! a.m 0 J--- ,y, .w�_ ngineerfngtoolbox.corn - f _ _ _ 4D 0 20 40 60 100 120 Ma4 - Temperature(deg F) ^, h 4` 1 3/7/2016 What can go wrong ? LPG Transfilling: NFPA 58 4 , p ai 'rvr '`' LPG LIQUID s._ CLOSED LOOP ' a, r TRANSFER EXTRACTION 4 I i - REGULATED PER PROCESS • re.- 4 r.rerr,w wrsws4M'Tair . .A. 4= II) FIRE $ al DEPARTMENT MImwvu,sm.n nrwn n»U[S�i[TY A 14,,,ri aril LPG Transfilling ;� ., 131,::::),,‘,1`;,;,,,:.'",i,, LPG Transfilling • Nitrogen vs heated jacket ea E Classified Electrical ,,' o • Outdoors' ! � . .. ///1-4'.--,------- Ii6Ie A • NFPA 58 t e E r� �� [�a Baa Asa ioS nn • Setbacks Je_,,_ _`ate 4 :, t a4 R I a a V f—is A. 8uoktint n with 1HR hot hetod ozleru;r wall i 8 LPG t oitwoots.n tihreIt r0ata 8.nki gs th two 00 ,exterior wail or 0040,0,3eig ntans D F Otho tDia:Ca ottoOt hb iet n15tn.000 f'. C lass I t> son 1 eiert atpv(tach Keil alas With.n 561 horsier ItT4, FIRE c <tas ID sonaaKxtr..ani uatvtnd ares FIRE DEPARTMENT - c vw wla l an. DEPARTMENT n•v.ea ntet'C H PI.Kk tlY Une mat can UH nam coon .•cru faNi1 15 3/7/2016 ',;h y CO2 Extractions Supercritical/Subcritical COZ 9:' anper critical , R_:d =i fluid, ' i 'gb solid 0.4) z SA .2 t(�1� � an ( �i��� arid potrst 3:" et.. s,,., R:vapor x 11 DANGER -s i ,... Potantiat • ' 't t. Atmosphere: }} �.� ^ 1 • Li _ I i do'''' o 1. � '� Ethanol Extractions II • Flammable liquids used and are heated to off gas Ethanol Extractions (boil off/evaporate)to atmosphere OR distilled and recaptured(distillation)for reuse. • This operation requires a hazardous exhaust hood or chemical fume hood • Equipment must be rated for the intended use ,- - l' „ • $ PA lipw k Jam" IL . l ,44,.4�4 ,-w •,-.,# 16 V 3/3/2016 /11:,,t.,::_''' Rotary Evaporator and Centrifu 4• Vacuum Evaporator t Commercial Solvent Extractor 0 0-/i i ,... .t.....,:c.i. ,,,,,,...- » .„ i . , , 1" _ _. „ . 3 » » 0 �` l I 3 e ` Approved Extraction Equipmellt Approved Extraction Equipment Lit * .. I „rs,„,,,, , A -t� _ moo. ». iil "a'- 1 N"# #. .yj i ik w, 4"*".". ppp X ' " Ethanol Extractor g y t ..• x+ a '` CO2 ExtractorAi 70 j ! Bubble Bags ti .+r rY Vacuum .... r ttn, i� ' „„ Pump 7l t g .1°„,;a,e CO2 Extractor Butane/Propane CO2 Extractor Butane/Pro ane Extractor �" " r Extract Butane/Prop r 17 3/7/2016 Approved or Unapproved? Unapproved Extraction Equipment I INA71 ti/ d s k'' s �y .tom^. pit 4. .. mm x fi � _' ' xir% Washing Machine for Cold Water Extraction Unapproved Extraction E ui me First Publicized Recall PP 4 P l r- r -io ,,1 , .40:. r m Butane Open Blasting Tubes e a a Isopropanol fie. Extractor . t 1 iHexane +* �i *` ., .„ Extractor Ethanol Extractor 18 • 3/7/2016 Safety Concerns Post-processing of Butane Hash • Extraction processes can be II dangerous if not conducted _ - { properly: ..-+0 �` 1 , 4 ALA•, Flammability of Solvents 100% • Cold Burns/Frost Bite 1 e -7 Iv '..„':•<.j High Pressure of Solvents , I • Gas leaks/Insufficient air change 4 , rate/Oxygen-deficient . Nie 3rd environment ,. ..,.... . xd ' k. g - 1 I. .4 ' F ....s X.,1"'141.1'&1- 24i+u/ Post-processing of Butane Has -_ - .1 -' � ' ,& +' / ,., ° A ifi, ...._. -- a a ,,,`,,-:;:,,,A-',,,:i sF.. . .. V hw� 19 oz 3,3_,,„„ , 11,1 a"� - 1y,,:.7 �.� it 42 .1 ilia 4,;,,,..' - - .." -'',„.„,i.i."4.,,p „,.;,,:,,%1=4.!,.';';',;t:f; ,,,;,,„'.f,.,f 0..•:-.„ Fm vr" 1 11 - flit• al, 111 q 1111 110 xem I r - 44111' ''''''et'.' 0,....,:.'.,* 9TOz/L/E 3/7/2016 • Weediquette: Intro to BH0 4',,,:/,,i i t , /016 Unapproved na roved Extraction ui mE ent 1 ft,'4, Open-blasting PP q P 4 i • tY Az. 21 3/7/2016 The Remnants of Open-blasting The Remnants of Open- : .. - -rn blasting 1 „........,* ....,,....... .. , J,,,,,,,, ,., . e® alt `1' r a".+ ':� — - __ `,a` leb \ �=..1i 1 � Y" %;�1 n , , s ty,a.4 ' i ' { `ta }," `� The Remnants of Open-bla• ,..,:,,,,,..,..."„:..4,...1 , - ,� of e` .., 4 / _ !te t. . , , ., tk. ,..,,,......,:,..c ,, ,..• ;tib 't ✓, + �, _. '.::-''..k7,,;111''4-1,-' :d, S . --% AIM `y",.. y' q LI-,:::I y app � tr +. g h+ e"b,, rg F '_¢§b,. !&!Kaci , .( Mice.-.rom T,7......'.. a 1 a'd r, _r1;, 22 3/7/2016 The Remnants of Open-blastin aIIlit WHAT IS THIS ?!? jo, 44'.' : ifir%te t' 'k.' i Winterization, Dewaxing and P g The Remnants of I Open-blasting t =j yam"'" , , 23 3/7/2016 Types of Infused Products 1 Decarboxylation • Edibles o-c o • Beverages IM Ii h 11 I) ii_ °H ° oX o 0" mamma • Tinctures zh ✓ X �aY X N ^ Tablets • , Ct �.b(,r.°art�t(wilk'TaMyarvnrsrbMogrMMld'TXUa' ) ranrgNnxa.a.e.w(e'nhtT P. .. eili , t ft \tape Pens d .3 4VM14IiGS ; °No offoo 0.c.0 • Sublingual Sprays,..r..^,.m IA M r °N OM SEI l``^OH^ `'" �' i N X 4 9 • Transdermal Patches ""`"" crENtllarmmu 7N4 (MGM emrrx4loucAdd(C(CM) C (CN) 3 • Topicals ' , 1, /-0, 0 CHIN. o (MAF a o }'14�rt; 1 , L J'fr' (dtE Ed 1. a COCA sr,d off HO ali El HO No a:., ig.:".."—� i'�T' c,...bl,&Add WNW El Om (crow) eemuan .e;rac). 2 leer!••_.-� I If Q O)i J I...,i h;... ;; ra.em...•n, ev i,,m, t T , Z1;41' R ,,i, ' .. mer+e>�>a+n Decarboxylation Decarboxylation 6 FE Lamy rt a'./fnnarlc Sao.1°rnnennnal 140 CMS,3-10 d'THCA.4 .T.stmt or ciMY otioopor us(1960) A e-THC 120 c THC content,m9/9 15 _.145K(293°F) 122°C 252°F) c txe.5.ealo\ 740-0 106°C(223°F) 10 94°C(201°F) '.. 20000: 1e0'C 0: �\ 5 80°C(176° 3 Y ,20000. e. 4 40000 1e5-c mi -00000 .' — T 21:1 37 ...e..................a, .. .,..,... 15 17 34 Si 4 5 6 7 8 9 100 11 122 13 79 (4 14 15 18 Ti,,.0W) Effect of heating time and temperature on the INC content of an',hexane Fl1.).HPLC elvtnotopana termed 0 220 m0 for do camoslo0 of dr.THC.4A to to-THC at ddhrarc tempeno U purr to au(yus. marihuana extract aver heating an the glass surface it an open reactor. 1M°YU L6Mt6 h Y f'n LI cain.eKht• 24 3/7/2016 Denver Requirements for PHF/TCS or Non-PHF/Non Shelf-Stability of Hash Oil Extractions Extractions/Concentrates and Infused Edibles x„ti Must be treated as PHF/TCS unless written 1 Must be treated as PHF/TCS unless: . '+ procedures and controls submitted&approved bys' ,,,,:, - DEH PHI demonstrating non-PHF/non-TCS Extract is irradiated OR '"a • pH and/aw activity levels Extract is suspended in homogenous 190 or 200 s • Assess intrinsic qualities of the product proof alcohol mixture OR • Extract is heated to adequate temperature and `7 F ood pressure for an extended period OR A cidity a T ime • Scientific research demonstrating other controls i,;,, `.. '°1 ? • for shelf-stability is provided and approved Temperature Demonstration that the pH and/or aw levels 0 xygen \ meet the requirements for shelf-stability c Moisture Food Safety Challenges Pests, Microbial Contamination N • ' and Pesticides Retailers: -- • Unapproved source • , " • Pathogenic bacteria(STECs,Salmonellae spp.) • Unwholesome plant material and products ;g� r 4y �`,t • Unapproved pesticides and chemicals —' � '++ % Mold,mycotoxins,aflatoxins , • Refrigeration of PHI: .... -`" . • Powdery mildew - • Improper labeling • s • Yeast �� Bud rot Ittl" f Manufacturers: Basic Food Safety Knowledge&Training,GMPs,GAPS,HACCP ^"�.vr„„; g *,,,A,04-1r0 , :. v, • Spider&rust mites -- W UnaPProved wurce ye ` • Aphids '".- Traceability o v ° Thrips — 3 Unwholesome plant material ?'s 4,d'r. as r • Unapproved pesticides r 4 "`""` :-..c.,-,,,•-=1/+� " a Residual solvents t-`y, , t .. % ; Proper potency and homogeneity of Infused products x+"d'?. 3?: +1t 's Shelf-stability of infused edible or concentrate for oral consumption `k2'Q �• S N''''- ,, .:•_ Unapproved extraction equipment `i "� Improper labeling •?• '€ , ' f F, Child-Resistant,opaque packaging r illi , tr.y vu rs2o,o .::....,......rY&.fit. 3/7/2016 Spider Mites 1 01U T4 Bud Rot, Powdery Mildew and Mold 'd S Ay ayi.. . 11Yry,u 3.2016 thuy Yu 340016 t . • • • ..... 6a.:11.....ee,.m rokm<,..1• STATE OF COLORADO OfnCE Of THE GOVERNOR `" *timeCapao4 Osroa.Ca.046.44:1103 Rens 00111662671 Rha MTh AU.MJI l4. t ufir b W Iln4mbuye. .w...-. D 2015-015 EXECUTIVE ORDER Directing State Agencies to Address Threats to Public Safety Posed by Marijuana rMnY6.e�ou Contaminated by Pesticide 26 3/7/2016 Types of Testing for Finished Packaging and Labeling Requiremeuireme Product per Marijuana Enforcement Division • Solvent-based extractions can be harmful when consumed ► Opaque,child-resistant packaging that does not appeal to children and doe if solvent is not properly purged not contain the word"candy"or"candies" • Residual Solvent Testing ► Statement about whether the container is child-resistant o. ► May not make false/misleading statements regarding health or physical • Inconsistent dosing of THC can lead to undesirable benefit to consumer psychoactive effects "' a- "Contains Marijuana. Keep out of the reach of Children." must be stated • • below the Universal Symbol,which must be located on the front of the Potency Testing package no smaller than v,•'x 1/2"• Homogeneity Testing ei• ► Identity Statement and Standardized Graphic Symbol of the MIP that • 46' produced the marijuana product • • Cannabis Concentrates/Infused Products may carry risk of foodborne illness due to the consumption of pathogenic ► iiko; ► Font size must be no smaller than 1/16 inch microorganisms,unwholesome raw plant material(fungi, ~ r:•; ► Text must be in English language and must be unobstructed and conspicuous mold,yeast,powdery mildew,mycotoxins,aflatoxins), t p Instructions for non-edible products toxic chemicals,pests or other contaminants ► License number of OPC/MIP • Microbial Contaminant Testing ,ty "" '" if-*`s ► Harvest Batch Number(s)or Production Batch Number .•✓`at K. • Pesticide Testing %', -' • Toxins Testing .:,I Twgva caact6 Packaging and Labeling Requireme Packaging and Labeling Requireme per Marijuana Enforcement Division per Marijuana Enforcement Division Warning Statements: • Ingredient List r "There may be health risks associated with the consumption of this Statement or Refri¢er+thin, product." • Serving sloe and Total Active THC Statement a "This product contains marijuana and its potency was tested with an Production Date and Expiration Date allowable plus or minus 15%variance pursuant to 12-43.4- Nutritional Fact Panel based on the number of servings within the container 202(311a)(IV)(E), C-R.S." • saventfchemicals used for extraction ► "This product was produced without regulatory oversight for health, safety,or efficacy" Net weight "The intoxicating effects of this product may be delayed by two or more Complete list of non-organic cultivation Ingredients(pesticides,runglaaes,herbicides,n__________________________________ hours." Reran for tests performed "There maybe additional health risks associated with the consumption - Tilt Potency per serving,including boon THC and coo content(Recreational:max • of this product for women who are pregnant,breastfeeding,or planning rncnervina,too m¢THC/package) on becoming pregnant." Residual Solvent Results ► "Do not drive a motor vehicle or operate heavy machinery while using Microbiais'mold,yeast,sportes,sTEcs,salmonellae spp.,filth) marijuana-" a Herbicides,Pesticides,Fungicides • statement indicating product was not tested for contaminants.111 mai,mildew,nim;IP m ., .&.:des,pesticides,fungcides,and lel harmful chemicals ; IMryxa}&alto Thiry Vu 1,400,6 2/ 3/7/2016 First Marijuana Outbrea Background Reported in the Nation "THE CRAZIEST COUNTY FAIR IN AMERICA!" etrahydrocannabinol (THC)-in Fair was founded in 2011 � Products at the Denver County August 3, 2014 Location: National lex Western Stock Show F P Carol McDonald,MSN, M5 , ' Ittik Mission: To present an annual event which .' Denver Publi ith encourages citizens of Denver to ... , share ideas,traditions,creativity, �'" �' UIJIIIVIE1J1 � - local culture,and intellect. The 4 ` Vu fair promotes celebration and ` Z.--t%'rtc c Environmental Public Health Investigator Il healthy competitive fun. Denver Environmental Health ' Pavilions at the Fair Investigation • August 4t1 : First reports 'Y-4-....a:. f • Vendor in the Pot Pavilion implicated • 15 pavilions • Local company f R' •° .. ' *: . • Chocolate-sample products • 44 Vendors • Full Melt and MadMint-variety of flavors • 21+ Pot Pavilion • August 5 :Media reports • All vendors were required to sign a • August 6th: DEH received reports Et notified DPH • • MED and DPD provided case information to DPH contract. • DPH conducted case interviews ` • Joint inspections between MED, DPD Et DEH 28 - 3/7/2016 Timeline of Events „,,,,,,, Timeline of Events • 7/29-7/30/14:Approximately 2,500 samples were ii • 8/7/14: MED reported 4 cases of individuals who consumed Full Melt chocolate samples that . manufactured for Denver County Fair. 1 111 • contained active THC from the Pot Pavilion at the Samples were transported to NWSS on 8/1/14. Denver County Fair on 8/3/14. • Samples were stored overnight in an unlocked, unatten • DPH conducts case interviews. cooler at NWSS. tfi • DEH coordinates joint investigation of4;1i:: • Additional samples delivered at 11:30 am ft 4:30 pm on ` implicated marijuana infused product 8/3/14. manufacturer with MED. • 8/5/14: Media reporting the initial accounts of 3 individu. • MED,DPD Et Internal review of 24 hour video consuming"marijuana-laced candy”at the Denver County surveillance between 7/29/14 through 8/3/14. Fair. ; • 8/12/14: MED reports 5 additional cases-3 adults, 2 children. • 8/6/14: DEH initiates foodborne illness outbreak investigation and contacts regulatory partners. 8/14/14: DPD reports one additional case. �k �.. ,a .s.r Case Investigation ., • Product was supplied as "non-medicated samp ., y • Illness reports were received through MED and I . N : r ‘ • August 6-12, case interviews were conducted '1,,,,s7,1",,, I ? �_ Case definition: • s r _' A case was defined as anyone who ate a Full Melt chocolate bar (any flavor) at the implicated booth in "i 1 u + „_ 21+ Pot Pavilion on August 3 between the hours of 12p fs and 6p.m. and subsequently had symptoms of any of t e ..1..-:7•-•:-.1-,',,.. following: nausea, vomiting, disorientation, dizziness, , i�tlill WIT 4g F• anxiety, hallucinations, stomach ache, dry mouth, numbness/tingling in extremities, confusion, dyspn� ` �� sweating, fainting, chest tightness, loss of coordi ,A -F-- _,�' ", -,. � panic, paranoia, difficulty in speaking, or me 29 3/772016 Descriptive Statistics •• Descriptive Statistics • • Demographics of people exposed age s.mi County Previous sa Amount of chocolate consumed and previous use in relation to sym• Median age:29 6(60%)mak 4(40%)Arapahoe 5lso%)never duration,and severity' • Range:8-48 4(40%)female 3(30%)Denver 3(30%)occasional (2 children) . Amount Previous use N Avg Avg N N l(10%)Jefferson 2(20%1 regular pse" consumed= reporting time till duration treated hospitals 2120%)put of state this onset (hours) Clink*manifestations • Symptoms(by number of awn runetlll onset Duration(hours) Treatment and amount (hours) — repertirig) pmu,a) hospitalization %bar Never 1 3 12 0 7(70%)Nausea.stomach ache"vomiting Average:2.27 hours Average:24 hours 4(40%)treated 1 bar 2 Never,1 4 0.69 27 3 2 6160%1 Confuslon/dlsCdentation Range.5-11.5 hours Range 12-48 2(20%)hosphallged 4(40%(Dizziness occasional,1 4(40%)Hallucinations regular 3130%1 Memory loss 300%IAnaiery.paran4,pOrrO 2bars Regular 1 11.5 12 2)20%)Dyson<a,chest tightness 3bars Occasional 1 1 48 2(20%1 Fainting 'S 2(20%)Loss of coordnation i4bars Occasional 1 1.25 36 1 2(20%)Sweating 2ao%I Tingling and numbness m lege 1(10%) 'Table excludes two children.Neither child was treated or hospitalized.Both ate Blurred vision 1110%1 Difficulty speaking (est 25 mg)and had onset time of 1.5—1.67 hours and duration of 12 hours" 1aoxl Dry mouth Medicated bars contain 50 mg of THC,but not all bars are thought to have 1(10x)"ca^e44mhead and body medicated.It is unknown how much THC each individual consumed. 1(10%)Shaking rho,02}620f4 Thuy vu3.e.,T10 RECOMMENDATIONS Product Description • For Marijuana Infused Products Manufacture, • Compliance with MED Medical a Retail Regulati• Available products and products consumed by Individuals reporting symptoms Denver Retail Food Establishment Rules and Reg Product Nand% Nand% exposed exposed to • Prohibit the production and distribution of non- only thls ononlythls medicated samples pfOdO) • Maintain the chain of custody for all manufacture. Milk chocolate 9(90%) 6(6090 Cherry mint 2(20%) 0 _ _ products Strawberry waffle cone 2(20%) 0 Dark chocolate 2(20%),0 5 ' • For Local Public Health: Chocolate caramel 1(10%) 1(10%) Peanut butter graham cracker 1(10%) 0 Determine questions Chocolate mint 1(10%) 0 • Specimens-environmental and cases • Cases and controls • Collaborate with local/state regulatory agencies: Marijuana Enforcement Division, Police Depart Fire Department 0 0 Va 3b-0.0m yvel-2p16 /0.494,04'"22,700, 30 3/7/2016 Investigations timet f,' Enforcement Action - Cease a desist orders for several operations not equipped for • Traceability of raw plant material • Product recall and disposals for vacuum packaged product,ext and infused products treated as non-PHF without demonstratio a • Concentrates and infused edibles being a, stability - treated as non-PHF ' • Summons for 3 manufacturers for incomplete recalls • Infused edibles produced in a manufacturing facility without Civil penalties for repeat violations minimum equipment necessary for food ; • Administrative Holds on plants treated with unapproved pesticides safety es ,; • Product recalls and disposal of concentrates and infused edibles der •' • Clothes washer cold water extraction �'_ from plants tainted with unapproved pesticides o- . ;` • Denver County Fair Outbreaki r Complaints of compromised, f unwholesome plant material(mold, 1 ,' • A powdery mildew,bud rot)being ° f• '•ti ,+. extracted = .. ae� «• e Unapproved pesticides"ir ', � i• i, The Great Social Experiment Marijuana Allowances in - New regulatory realm Residential Occupancies Critical limits for safe processing,storage and - s,sw* r ± handling of hash oils °"•... • Creative extraction techniques, -` `••a„'�.,.-- ��> h� solvents and equipment -�:�- 6 plants per adult I,' • More research needed • ''^•=�•�'+..,,'� "•.`y'��' • Industry's responsibility - 'V y k • Max of 12 plants per dwelling `'....,^��"��....., .° • Understand and implement State and Local • ire'", "......„........,,,„,:•..' m,, regulations �, • 2014 City and County of .:::::','"........7:2-.Z4.'''..„--•-•'---....,.`'• `' • Demonstrate safety of their processes , , Denver Ordinance limits --:::-....'"*.--....~.••....:. `- • regulations is not regulated under Denver's food extractions to 16 oz of r.�`.-� ,��., ,1 alcohol and a non-fuel fired/ •, .,.�.• ••. �, • Application of existing Denver food regulations ..... .-- ~"`'"•'- electrified heat source QR by .--... ``--•..,—. -,--- special . Basic food safety concerns with grow,retail, Y EIE° * special fire permit g±non- �" �:'•'`•�"`-+ ' medical and manufacturing operations .,,"^~-.."y -:;`;� �:, flammable/combustible ,,�.,^�.•.� ^ . WA • Recall and disposal of unsafe,unwholesome extraction processes ~`"'^••.,,, ""^�.;�,+..•,,,, , .... products or products tainted with unapproved ,, . pesticidesN....--4, . _ :00- . 31 3/7/2016 Y Caregivers and Marijuana Cooperative Grows - , ar • Collectives,CO-OPS, + 1kilft /g J� ,, Community Gardens,etc.rowin 5; I i • Non-licensed growing {. � 1 operation .1:1y,,� F • Extraction process + regulated is under . • i ,. ,. residential ordinance 1 illll�y --- a i 2015 Ordinance passed "` limiting CO.OPS to 36 �:1 plants per zone lot 4 Regulatory partners '►1 p Fr DENVER Questions •?• Denver Fire Department THE MILE HIGH CITY , • Denver Department of Excise a Licenses ,'f"",'f' ,,,ii • Denver Police Department/Vice Et Drug Bureau - ; • Denver Department of Community Planning Et Thuy Vu Development CDA !O %' Chief Compliance and Regulatory Officer • Denver Mayor's Office of Marijuana Policy Nuka Enterprises, LLC • Denver Public Health • Department of Revenue Marijuana Enforcement Divisio thuy@nukafoods.com • Colorado Department of Public Health Environment thuyvuconsultingCgmail•com ",, Colorado Department of Agriculture 303-523-3052 coos 'COLORADO COLORADO li ?'• He A,,,,,, ,•r $Ihpnctroent of Reacnue {/� I, _ _ , m HepmimentotnPublicen lu ROorcenx.u-Gvnw.>n Health b Environment ". 3,701< fMntt�rPublic Ik:dtlt 32 411-1 LA-(61)0w A) Introduced by: Mayor,Ogle,Gilman Substitute Introduced: 02/23/16 02016-07(Mayor,Ogle,Gilman): See Original for Prior History Hearing: 02/23/16 Action: Enacted as Amended Vote: 9 Yes,0 No,0 Absent KENAI PENINSULA BOROUGH ORDINANCE 2016-07 (MAYOR,OGLE,GILMAN) SUBSTITUTE AN ORDINANCE AMENDING KPB CHAPTER 7.20 AND ENACTING KPB CHAPTER 7.30 REGARDING LOCAL PROTESTS OF STATE MARIJUANA LICENSES WHEREAS, during the November 4, 2014 general election, Alaska voters approved initiative Ballot Measure 2, an Act to Tax and Regulate the Production, Sale and Use of Marijuana, which provided for the State development of regulations and requirements for commercial marijuana establishments, and legalized possession and personal use of marijuana by persons 21 years of age or older; and WHEREAS, Ballot Measure 2 allows municipalities in the State, including the borough, to prohibit and/or implement regulations governing the number, time, place and manner of marijuana cultivation facilities, marijuana testing facilities, marijuana product manufacturing facilities, and retail marijuana stores (marijuana establishments); and WHEREAS, KPB Resolution 2015-013, adopted March 17, 2015, established the Marijuana Task Force for the purpose of researching, advising, and making recommendations to the borough assembly; and WHEREAS, the KPB Marijuana Task Force received a memorandum dated July 28, 2015, from Kenai Peninsula Borough Mayor Mike Navarre instructing the Task Force to primarily focus on potential borough regulation of the marijuana industry, if any; and WHEREAS, the United States Department of Justice has issued guidance (the "Cole" memoranda dated February 14, 2014, and August 29, 2013) describing marijuana- related federal enforcement priorities, including "Preventing the distribution of marijuana to minors" and "Preventing drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use;" and WHEREAS, the Marijuana Task Force, finds that the goal of protecting the public health, safety, and welfare is furthered by preventing the distribution of marijuana to minors and preventing drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use; and Kenai Peninsula Borough,Alaska New Text Underlined; [DELETED TEXT BRACKETED] Ordinance 2016-07 Sub Page 1 of 6 a V • • WHEREAS, pursuant to KPB 2.56.006, the document entitled"2005 Kenai Peninsula Borough Comprehensive Plan"has been adopted as the borough's comprehensive plan; and WHEREAS, the 2005 Kenai Peninsula Borough Comprehensive Plan identified in Goal 6.6 the goal to reduce conflicts arising from incompatible land uses outside of incorporated cities; and WHEREAS, the Marijuana Task Force supported certain standards and conditions for marijuana establishments at its January 20, 2016, meeting; and WHEREAS, a borough process addressing marijuana establishments should complement the state licensing process rather than duplicate it; NOW, THEREFORE, BE IT ORDAINED BY THE ASSEMBLY OF THE KENAI PENINSULA BOROUGH: SECTION 1. That KPB 7.20.010(B) is hereby amended as follows: 7.20.010 Local Regulatory Authority. B. The assembly is authorized to comment to the State of Alaska Marijuana Control Board on marijuana establishment license applications within the Kenai Peninsula Borough consistent with the standards set forth in AS 17.381 [AND] 3 AAC 306, and KPB 7.30. A public hearing shall be held by the assembly prior to submitting the borough's comments on a license application, transfer,relocation or renewal to the State of Alaska. SECTION 2. That the Kenai Peninsula Borough Code of Ordinances is hereby amended by adding a new chapter to be numbered KPB 7.30 which shall read as follows: CHAPTER 7.30. - MARIJUANA LICENSE PROTESTS 7.30.010. Assembly review—Applications—Renewals—Hearings—Action. A. The assembly shall review and make recommendations to the state on applications submitted to the State Marijuana Control Board for marijuana establishment licenses, or the renewal of a license, within the borough in the following situations: 1. applications for a new license; or 2. applications requesting approval of a relocation of the licensed premises; or 3. applications requesting the renewal of a license; or Ordinance 2016-07 Sub New Text Underlined; [DELETED TEXT BRACKETED] Kenai Peninsula Borough,Alaska Page 2 of 6 . 4. applications requesting approval of a transfer of a license to another person. B. Prior to the assembly making a recommendation to the Marijuana Control Board the planning commission shall hold a public hearing and make a recommendation to the assembly on the license application applying the standards set forth in KPB 7.30.020. The planning department shall prepare a staff report for the planning commission addressing items set forth in KPB 7.30.020. Notice of the public hearing shall be given in accord with the provisions of KPB 21.11. C. After assembly public hearing, review and action as provided in KPB 7.30.010(A) and 7.30.020, the borough clerk shall provide a letter to the State of Alaska Marijuana Control Board informing it of the assembly's non- objection,protest, or recommended conditional approval as appropriate. 7.30.020. Assembly review—Standards. A. The assembly shall cause a protest to be filed with the State of Alaska Marijuana Control Board on any application submitted for a new marijuana license, or any application requesting approval of a relocation of the licensed premises, or any application requesting approval of a transfer of a license to another person, or the application for renewal of a license, within the borough, in the following situations: 1. Where borough records indicate that the applicant and/or transferor is in violation of the borough sales, and/or personal and real property tax ordinances and regulations, has any unpaid balance due on tax accounts for which the applicant and/or transferor is liable or has failed to comply with any of the filing, reporting or payment provisions of the borough ordinances or regulations. A protest shall not be filed for balances due secured by a payment agreement authorized by borough ordinances, as long as: a. the applicant or transferor is in compliance with the payment agreement; and b. the payment agreement requires payment in full by the end of the next license year; and c. the applicant or transferor is involved in no more than two payment agreements within the prior five(5) years. d. Notwithstanding the provisions of this subsection, the borough is not required to file a protest if the transferor and/or applicant have made satisfactory arrangements with the borough for the discharge of a tax obligation from the proceeds of the transfer or by payment from the person to whom the license is to be transferred. Further, if the proposed transferee holds a security interest in the license or licensed premises and seeks the transfer as part of an action Kenai Peninsula Borough,Alaska New Text Underlined; [DELETED TEXT BRACKETED] Ordinance 2016-07 Sub Page 3 of 6 foreclosing or protecting that security interest the borough will not protest a transfer to the holder of the security interest so long as satisfactory arrangements have been made by the transferee to pay the delinquent taxes in accordance with this chapter and other provisions of the borough code and no other provisions of this chapter would cause or allow a protest to be made. B. Marijuana establishments shall not: 1. be located within 1,000 feet of any school. The distance specified in this subsection must be measured by the shortest pedestrian route from the public entrance of the building in which the licensed premises would be located to the outer parcel boundaries of the school. 2. be located within 500 feet of a recreation or youth center, a building in which religious services are regularly conducted, or a correctional facility. The distance specified in this subsection must be measured by the shortest pedestrian route from the public entrance of the building in which the licensed premises would be located to the outer boundaries of the recreation or youth center, or the main public entrance of the building in which religious services are regularly conducted, or the correctional facility. 3. be located within a local option zoning district. C. Marijuana establishments shall: 1. be located where there is sufficient ingress and egress for traffic to the parcel including a. The approach shall be constructed to a minimum of 28 feet in width where it accesses a borough right-of-way; b. There shall be no parking in borough rights-of-way generated by the marijuana establishment; c. The site development shall delineate a clear route for delivery vehicles which shall allow vehicles to turn safely; d. on-site parking and loading areas shall be designed to preclude vehicles from backing out into the roadway; and 2. not conduct any business on, or allow any consumer to access, the retail marijuana store's licensed premises, between the hours of 2:00 a.m. and 8:00 a.m. each day; and 3. be current in all Kenai Peninsula Borough obligations consistent with KPB 7.30.020(A); and 4. maintain a state license issued pursuant to AS 17.38 and 3 AAC 306. D. Applicant is responsible for complying with all federal, state and local laws applicable to marijuana. By issuing a recommendation to the Marijuana Ordinance 2016-07 Sub New Text Underlined; [DELETED TEXT BRACKETED] Kenai Peninsula Borough,Alaska Page 4 of 6 Control Board the borough is not authorizing the violation of local, state, or federal law. E. The assembly may recommend conditions on a license to meet the following standards: protection against damage to adjacent properties, offsite odors, noise, visual impacts, road damage, and criminal activity, and protection of public safety. 7.30.900.Defmitions. Unless the context requires otherwise,the following definitions apply: "Marijuana"has the meaning given in Alaska Statute 17.38.900. "Marijuana cultivation facility" means an entity registered to cultivate, prepare, and package marijuana and to sell marijuana to retail marijuana stores, to marijuana product manufacturing facilities, and to other marijuana cultivation facilities,but not to consumers. "Marijuana establishment" means a marijuana cultivation facility, a marijuana testing facility, a marijuana product manufacturing facility, or a retail marijuana store as defined in AS 17.38. "Marijuana product manufacturing facility" means an entity registered to purchase marijuana; manufacture, prepare, and package marijuana products; and sell marijuana and marijuana products to other marijuana product manufacturing facilities and to retail marijuana stores,but not to consumers. "Marijuana products" means concentrated marijuana products and marijuana products that are comprised of marijuana and other ingredients and are intended for use or consumption, such as, but not limited to, edible products, ointments, and tinctures. "Marijuana testing facility" means an entity registered to analyze and certify the safety and potency of marijuana. "Registered" means issued a registration or license by the State of Alaska. "Retail marijuana store" means an entity registered to purchase marijuana from marijuana cultivation facilities, to purchase marijuana and marijuana products from marijuana product manufacturing facilities, and to sell marijuana and marijuana products to consumers. "Recreation or Youth Center" means a building, structure, athletic playing field, or playground Kenai Peninsula Borough,Alaska New Text Underlined; [DELETED TEXT BRACKETED] Ordinance 2016-07 Sub Page 5 of 6 s (A) Run or created by a local government or the state to provide athletic, recreational, or leisure activities for minors; or (B) Operated by a public or private organization licensed to provide shelter, training, or guidance for persons under 21 years of age. SECTION 3. That this ordinance takes effect immediately upon its enactment. ENACTED BY THE ASSEMBLY OF THE KENAI PENINSULA BOROUGH THIS 23RD DAY OF FEBRUARY,2016. Blaine Gilman, Assembly President ATTEST: Johni Blankenship, MMC, Borough Clerk Yes: Bagley,Dunne,Holmdahl,Johnson,Knopp,Ogle,Welles,Gilman No: None Absent: None Ordinance 2016-07 Sub New Text Underlined; [DELETED TEXT BRACKETED] Kenai Peninsula Borough,Alaska Page 6 of 6 Banned Banned Nothing by Ord by ballot in place Regs passed or pending Adak Local Authority(LA),sets fines AE Boro X Akutan X Anchorage LA,license required,land use permit,criminal laws,vehicle laws,secondhand smoke laws,April ballot on 5%tax Anderson _al3/8 council vote on ban all commercial Barrow X 3/3 council discussion BB Boro 3/7 vote on one year moratorium Bethel Six month ban on processing,voters passed 15%sales tax Cantwell X Cordova LA,ban on certain manufacturing methods Delta Junction X • Denali Boro X Dillingham X Advisory committee formed Fairbanks 5%tax,fines for public cosumption FNS Boro Local zoning,permit required �— - Fort Yukon LA Healy 4 X Homer 3/14 vote on placing ban on special election ballot Kenai Increased buffer at schools,zoning laws apply,no on-site consumption KI Boro 3/3 vote on ban all commercial King Cove X Kodiak City 4 X Kotzebue Public consumption prohibited KP Boro LA,permit required,increased buffer zone at schools,hours of operation, Mat-Su Boro 10/16 ballot on banning all commercial N Slope Boro Public consumption prohibited Nenana X North Pole 6%tax,business license fee NWA Boro X Palmer X Seldovia X Seward X Soldotn X Two year moratorium Unalaska- X Valdez Zoning regs to be heard mid-March Wasilla X Whittier X KENAI PENINSULA BOROUGH 41. AI 144 North Binkley Street • Soldotna, Alaska 99669-7520 • o • Toll-free within the Borough: 1-800-478-4441 byPHONE: (907)262-4441 • FAX: (907)262-1892 www.kpb.us Ni MIKE NAVARRE BOROUGH MAYOR 'MEMORANDUM • TO: Blaine Gilman, Assembly President ' Members, Kenai Peninsula Borough Assembly FROM: Mike Navarre, MayorD • A7 A '0 Blaine Gilman, Assembly President Wayne Ogle, Assembly Member14" 0'et. DATE: January 22,2016 V SUBJECT: Ordinance 2016-07, An Ordinance Amending KPB Chapter 7.20 and Enacting KPB Chapter 7.30 Regarding Local Protests of State Marijuana Licenses, Amending KPB 21.25 and Enacting KPB 'Chapter 21.30 Regarding Permit Requirements for Marijuana Establishments, and Amending KPB 21.50 Regarding Violations and Enforcement(Mayor, Gilman, Ogle) An.ordinance is being submitted for introduction which would adopt a marijuana protest • chapter,KPB 7.30, similar to the one currently on the books for alcohol. The ordinance through proposed KPB 21.30 also establishes a land use counter permit for marijuana facilities regulated by AS 17.38. Additionally,the ordinance amends pending KPB 7.20 establishing the planning commission as the commenting agency for the borough on state marijuana license applications. The ordinance further amends KPB.21.50 to add fines for the enforcement of the land use permit ordinance. KPB 7.20 is amended to cross-reference that the planning,commission will comment to the state regarding the standards set forth in KPB 7.30 and KPB 21.30. KPB 7.20 is also amended to provide for hearing before the planning commission on a marijuana license application. KPB 7.30 provides that delinquencies in obligations to the borough provide a basis for a protest of a state marijuana facility license. The language of KPB 7.30 is based on the language in KPB 7.10 wherein an operator's delinquencies in borough obligations form the basis for the protest of a liquor license. KPB 21.25 is amended to provide for a counter permit for marijuana establishments. The regulations for this permit are found at KPB 21.30. A marijuana facility is subject to the following mandatory conditions: A 1,000 foot setback is required from schools; a 500 foot setback is required from youth or recreation centers, church service locations, and correctional facilities; there must be sufficient ingress and egress for traffic tothe parcel;retail marijuana stores must not conduct business or allow a consumer access between 2 a.m. and 8 a.m. January 22, 2016 Page Two Standards for marijuana establishments are set forth at KPB 21.30.030. Volunteered conditions by the operator which are consistent with these standards may be added to the permit issued by the planning director or may be proposed at the time the planning commission holds the hearing on the application for the state license. An appeal from the planning director's decision on a counter permit may be taken to the planning commission, and that appeal hearing may be combined with the hearing before the commission on the application for a state license. Permits in compliance with the permit conditions may be extended in five year increments. A permit may be modified through the same counter permit process as the initial granting of the permit. The fines for failure to obtain a permit or violation of a permit condition are set at$300.00 which is consistent with other similar violations of land use regulations. The planning commission will set a fee for the counter permit; it is believed the fee will be approximately$100. The Marijuana Task Force supported the adoption of the borough permit process (proposed KPB 21.30) at its meeting on January 20, 2016. Shortened time is being requested on this ordinance for February 23, 2016 so that it can be heard prior to February 24, the date the state Marijuana Control Board will start accepting license applications. By hearing the ordinance prior to that date there will not be a gap in time where the state regulations are in effect,but corresponding borough regulations are not. Such a gap could cause difficulties in establishing the local permit application and borough comment deadlines for license applications that have already been filed with the state. Your consideration of this ordinance is appreciated. Introduced by: Mayor,Ogle,Gilman Date: 02/23/16 Hearing: Action: Vote: KENAI PENINSULA BOROUGH ORDINANCE 2016-07 (MAYOR, OGLE, GILMAN) SUBSTITUTE AN ORDINANCE AMENDING KPB CHAPTER 7.20 AND ENACTING KPB CHAPTER 7.30 REGARDING LOCAL PROTESTS OF STATE MARIJUANA LICENSES WHEREAS, during the November 4, 2014 general election, Alaska voters approved initiative Ballot Measure 2, an Act to Tax and Regulate the Production, Sale and Use of Marijuana, which provided for the State development of regulations and requirements for commercial marijuana establishments, and legalized possession and personal use of marijuana by persons 21 years of age or older; and WHEREAS, Ballot Measure 2 allows municipalities in the State, including the borough, to prohibit and/or implement regulations governing the number, time, place and manner of marijuana cultivation facilities, marijuana testing facilities, marijuana product manufacturing facilities, and retail marijuana stores (marijuana establishments); and WHEREAS, KPB Resolution 2015-013, adopted March 17, 2015, established the Marijuana Task Force for the purpose of researching, advising, and making recommendations to the borough assembly; and WHEREAS, the KPB Marijuana Task Force received a memorandum dated July 28, 2015, from Kenai Peninsula Borough Mayor Mike Navarre instructing the Task Force to primarily focus on potential borough regulation of the marijuana industry, if any; and WHEREAS, the United States Department of Justice has issued guidance (the "Cole" memoranda dated February 14, 2014, and August 29, 2013) describing marijuana- related federal enforcement priorities, including "Preventing the distribution of marijuana to minors" and "Preventing drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use;"and WHEREAS, the Marijuana Task Force, finds that the goal of protecting the public health, safety, and welfare is furthered by preventing the distribution of marijuana to minors and preventing drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use; and Kenai Peninsula Borough,Alaska New Text Underlined;[DELETED TEXT BRACKETED] Ordinance 2016-07SUB Page 1 of 6 WHEREAS, pursuant to KPB 2.56.006,the document entitled "2005 Kenai Peninsula Borough Comprehensive Plan"has been adopted as the borough's comprehensive plan; and WHEREAS, the 2005 Kenai Peninsula Borough Comprehensive Plan identified in Goal 6.6 the goal to reduce conflicts arising from incompatible land uses outside of incorporated cities; and WHEREAS, ordinance 2016-05 establishes the planning commission as the commentary agency to the Marijuana Control Board regarding licensing for marijuana establishments; and WHEREAS, the Marijuana Task Force supported certain standards and conditions for marijuana establishments at its January 20, 2016, meeting; and WHEREAS, a borough process addressing marijuana establishments should complement the state licensing process rather than duplicate it; and WHEREAS, at its meeting of the planning commission recommended_ • NOW, THEREFORE, BE IT ORDAINED BY THE ASSEMBLY OF THE KENAI PENINSULA BOROUGH: SECTION 1. That KPB 7.20.010(B) is hereby amended as follows: 7.20.010 Local Regulatory Authority. B. The planning commission is authorized to comment to the State of Alaska Marijuana Control Board on marijuana establishment license applications within the Kenai Peninsula Borough consistent with the standards set forth in AS 17.38, [AND] 3 AAC 306, and KPB 7.30. A public hearing shall be held by the planning commission prior to submitting the borough's comments on a license application, transfer, relocation or renewal to the State of Alaska. SECTION 2. That the Kenai Peninsula Borough Code of Ordinances is hereby amended by adding a new chapter to be numbered KPB 7.30 which shall read as follows: CHAPTER 7.30. - MARIJUANA LICENSE PROTESTS 7.30.010. Planning Commission review—Applications—Renewals. A. The planning commission shall review applications submitted to the State Marijuana Control Board for marijuana establishment licenses, or the renewal of a license, within the borough in the following situations: Ordinance 2016-07SUB New Text Underlined;[DELETED TEXT BRACKETED] Kenai Peninsula Borough,Alaska Page 2 of 6 1. applications for a new license; or 2. applications requesting approval of a relocation of the licensed premises; or 3. applications requesting the renewal of a license; or 4. applications requesting approval of a transfer of a license to another person. B. After planning commission review and action as provided in KPB 7.30.020, the borough planning department shall provide a letter to the State of Alaska Marijuana Control Board informing it of the planning commission's non- objection,protest, or recommended conditional approval as appropriate. C. The planning commission shall hold a public hearing prior to making a recommendation to the Marijuana Control Board. The planning department shall prepare a staff report for the planning commission addressing items set forth in KPB 7.30.020. Notice of the public hearing shall be given in accord with the provisions of KPB 21.11. 7.30.020. Planning commission protest. A. The planning commission shall cause a protest to be filed with the State of Alaska Marijuana Control Board on any application submitted for a new marijuana license, or any application requesting approval of a relocation of the licensed premises, or any application requesting approval of a transfer of a license to another person, or the application for renewal of a license, within the borough, in the following situations: 1. Where borough records indicate that the applicant and/or transferor is in violation of the borough sales, and/or personal and real property tax ordinances and regulations, has any unpaid balance due on tax accounts for which the applicant and/or transferor is liable or has failed to comply with any of the filing, reporting or payment provisions of the borough ordinances or regulations. A protest shall not be filed for balances due secured by a payment agreement authorized by borough ordinances, as long as: a. the applicant or transferor is in compliance with the payment agreement; and b. the payment agreement requires payment in full by the end of the next license year; and c. the applicant or transferor is involved in no more than two payment agreements within the prior five (5) years. d. Notwithstanding the provisions of this subsection, the borough is not required to file a protest if the transferor and/or applicant have made satisfactory arrangements with the borough for the discharge Kenai Peninsula Borough,Alaska New Text Underlined;[DELETED TEXT BRACKETED] Ordinance 2016-07SUB Page 3 of 6 of a tax obligation from the proceeds of the transfer or by payment from the person to whom the license is to be transferred. Further, if the proposed transferee holds a security interest in the license or licensed premises and seeks the transfer as part of an action foreclosing or protecting that security interest the borough will not protest a transfer to the holder of the security interest so long as satisfactory arrangements have been made by the transferee to pay the delinquent taxes in accordance with this chapter and other provisions of the borough code and no other provisions of this chapter would cause or allow a protest to be made. B. Marijuana establishments shall not: 1. be located within 1,000 feet of any school. The distance specified in this subsection must be measured by the shortest pedestrian route from the public entrance of the building in which the licensed premises would be located to the outer parcel boundaries of the school. 2. be located within 500 feet of a recreation or youth center, a building in which religious services are regularly conducted, or a correctional facility. The distance specified in this subsection must be measured by the shortest pedestrian route from the public entrance of the building in which the licensed premises would be located to the outer boundaries of the recreation or youth center,or the main public entrance of the building in which religious services are regularly conducted, or the correctional facility. 3. be located within a local option zoning district, nor shall any improvements related to a marijuana establishment be located within 300 feet of a local option zoning district formed under KPB 21.44 or prior law applicable to local option zoning district formation. C. Marijuana establishments shall: 1. be located where there is sufficient ingress and egress for traffic to the parcel; and 2. not conduct any business on, or allow any consumer to access, the retail marijuana store's licensed premises, between the hours of 2:00 a.m. and 8:00 a.m. each day; and 3. be current in all Kenai Peninsula Borough obligations consistent with KPB 7.30.020(A); and 4. maintain a state license issued pursuant to AS 17.38 and 3 AAC 306. D. Applicant is responsible for complying with all federal, state and local laws applicable to marijuana. By issuing a recommendation to the Marijuana Control Board the borough is not authorizing the violation of local, state, or federal law. Ordinance 2016-07SUB New TextUnderlined;[DELETED TEXT BRACKETED] Kenai Peninsula Borough,Alaska Page 4 of 6 E. The planning commission may recommend conditions on a license to meet the following standards: protection against damage to adjacent properties, offsite odors, noise, visual impacts, road damage, and criminal activity, and protection of public safety. 7.30.900. Definitions. Unless the context requires otherwise,the following definitions apply: "Marijuana"has the meaning given in Alaska Statute 17.38.900. "Marijuana cultivation facility" means an entity registered to cultivate, prepare, and package marijuana and to sell marijuana to retail marijuana stores, to marijuana product manufacturing facilities, and to other marijuana cultivation facilities,but not to consumers. "Marijuana establishment" means a marijuana cultivation facility, a marijuana testing facility, a marijuana product manufacturing facility, or a retail marijuana store as defined in AS 17.38. "Marijuana product manufacturing facility" means an entity registered to purchase marijuana; manufacture, prepare, and package marijuana products; and sell marijuana and marijuana products to other marijuana product manufacturing facilities and to retail marijuana stores,but not to consumers. "Marijuana products" means concentrated marijuana products and marijuana products that are comprised of marijuana and other ingredients and are intended for use or consumption, such as, but not limited to, edible products, ointments, and tinctures. "Marijuana testing facility" means an entity registered to analyze and certify the safety and potency of marijuana. "Registered" means issued a registration or license by the State of Alaska. "Retail marijuana store" means an entity registered to purchase marijuana from marijuana cultivation facilities, to purchase marijuana and marijuana products from marijuana product manufacturing facilities, and to sell marijuana and marijuana products to consumers. "Recreation or Youth Center" means a building, structure, athletic playing field, or playground (A) Run or created by a local government or the state to provide athletic, recreational, or leisure activities for minors; or (B) Operated by a public or private organization licensed to provide shelter, training,or guidance for persons under 21 years of age. Kenai Peninsula Borough,Alaska New Text Underlined;[DELETED TExT BRACKETED] Ordinance 2016-07SUB Page 5 of 6 SECTION 3. That this ordinance takes effect immediately upon its enactment. ENACTED BY THE ASSEMBLY OF THE KENAI PENINSULA BOROUGH THIS * DAY OF *2016. Blaine Gilman, Assembly President ATTEST: Johni Blankenship,MMC, Borough Clerk Yes: No: Absent: Ordinance 2016-07SUB New Text Underlined;[DELETED TEXT BRACKETED] Kenai Peninsula Borough,Alaska Page 6of6