Update on Alaska’s Legalization with Bruce Schulte

Bruce Schulte

In this interview with Bruce Schulte from the Coalition for Responsible Cannabis Legislation in Alaska we get an update on where Alaska is on formalizing adult use of cannabis. Discover the key dates and how legalization is unfolding in Alaska.

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Key Takeaways:
[1:56] – What is the Coalition for Responsible Cannabis responsible for?
[2:32] – Bruce explains what happened in Alaska in November of 2014.
[3:12] – State of Alaska’s cannabis movement.
[5:29] – What happens if you’re apprehended with a certain amount of cannabis at this point in time?
[7:22] – Everything is on schedule and happening according to plan.
[11:25] – Will licenses be categorized?
[12:44] – Plans for cannabis social lounges.
[16:54] – How hard will it be to get a license for cannabis in Alaska?
[19:05] – Bruce explains what it’s like to live in Alaska.
[23:00] – Contact details for the Coalition for Responsible Cannabis Legislation.

Click Here to Read Full Transcript

Matthew: Hi, I’m Matthew Kind. Every Monday and Wednesday look for a fresh episode where I’ll take you behind the scenes and interview the leaders of the rapidly evolving cannabis industry. Learn more at www.cannainsider.com. That’s www.cannainsider.com. Do you know that feeling when you sense opportunity, when you see something before most people and you just know it will be successful, then you're ready. Ready for CannaInsider Consulting. Learn more at www.canninsider.com/consulting. Now here's your program.

Want to know what is going on in Alaska from a cannabis legalization point of view? Today we’re going to find out. I am pleased to welcome Bruce Schulte from the Coalition for Responsible Cannabis Legislation to CannaInsider. Bruce is going to give us an update on what is going on exactly in Alaska. Welcome to CannaInsider Bruce.

Bruce: Hey Matt. How you doing?

Matthew: Great. Bruce, give us a sense of geography. Where are you today?

Bruce: Well I’m in Anchorage which is about, oh my gosh, about 500 miles north of Stockholm, Sweden if that helps anybody. Gosh, I think we’re about 900 miles from Seattle, northwest of Seattle.

Matthew: Okay. What’s the population of Alaska? I know Anchorage is what around 300,000 or 400,000 and then the state as a total, is that around 700,000?

Bruce: Yeah, yeah. The total population I think we’re actually now to like 730,000 to 740,000 statewide. About 40% of the population lives within 30 miles of Anchorage.

Matthew: Okay.

Bruce: Yeah. So you got Anchorage and Wasilla, Matanuska-Susitna Valley. Those are kind of like the two main population centers.

Matthew: And what is the coalition your part of responsible for in terms of cannabis?

Bruce: Well the CRCL was founded about two years ago during the signature gathering phase of this voter initiative. And it was founded by some guys from Alaska, from Fairbanks actually. And the whole focus of that group really was to first of all see the voter initiative passed, and then to see the rule making process done in a way that would result in a viable marijuana industry.

Matthew: Okay. And let’s rewind a little bit. So what happened in Alaska in November of 2014?

Bruce: Okay November 4th everybody went to the polls, and about 53% of the voters voted in favor of Ballot Measure 2 which was the measure to regulate and tax regulate marijuana like alcohol. And it’s interesting to note that that voter initiative actually gained more votes than our gubernatorial race, our congressional race and our US Senator. So that tells you something about the motivation up here.

Matthew: Yeah. And what has happened since then with the cannabis movement? Where are we now?

Bruce: Well we’re kind of in, I sort of look at this as kind of a phase process. The election was certified on November 24th and under our Constitution, the voter initiative becomes law 90 days later. So the key milestone coming up here is February 24th, and that’s the date on which this voter initiative becomes law. In the interim what’s been happening is our legislature gaveled back in January, and they have been furiously working on a couple of bills. Their main focus right now is to bring all of our criminal statutes into line with this voter initiative because things that were previously illegal will no longer be illegal as of February 25th. So that’s kind of phase one the way I see it is bringing all those criminal statutes into place before, well close to February 24th.

Matthew: Okay. And then what’s phase two and three?

Bruce: Okay so the second phase will be February 24th kind of starts the clock ticking on the regulatory process. Under the measure, the state has 9 months, up to 9 months to create the rules under which this industry is going to operate the commercial portion of the industry. And so that gives them until November 24th of this year. Then 3 months later, February of 2016, the state is expected to begin accepting applications for permits for growers, for processors, for retailers. And that in my view is sort of phase three of the actual commercialization, the commercial part of this whole thing. And they have 90 days to turn around those permit applications. So we’re sort of hoping that somewhere around May of 2016 we’ll see those first permits issued and the first legalized businesses opening their doors.

Matthew: So while you can’t buy cannabis legally right now, if you’re apprehended with a certain amount, are you just let go or how does that work?

Bruce: It sort of depends on the circumstances. We’ve kind of had an unusual legal climate up here for a while, but as of February 25th, possession of up to 1 ounce will be lawful. You can have it in your home. You can be driving around with it as long as you’re not consuming it. You can give it to a friend. So also a person can grow up to six plants, only three of them mature in their home. And they can give the six plants to a friend. So they can grow six, they could grow three, they could take three clones, give those to a friend. And that friend can give three clones to another friend free of any penalty whatsoever. As long as no money changes hands, that’s totally lawful.

Matthew: Okay. So you’re thinking in the first quarter of 2016 we’re going to see the first license applications? Is that what you’re saying?

Bruce: Yeah, that’s sort of the expectation. You know, if the schedule holds and at this point we’re on schedule. We would hope to see the first permits issued April or May of 2016. Ideally those will be for growers so that those guys can get started because of course they’ve got to grow their crop and harvest it and cure it and so forth. And so I’m sort of looking forward to August/September, maybe October of 2016 to see the first retail stores opening up with Alaska grown products.

Matthew: So the people that are in charge of changing the statutes and organizing the rules and so forth, they’re staying on top of it. It sounds like it’s happening how it’s supposed to and according to plan.

Bruce: It really is, and it’s interesting because our group is very closely engaged with that process. We’re working with the state legislature and with local governments in many of the larger urban centers on those rules. And some people get frustrated because they don’t see anything happening. I’ve heard people say hey we voted this thing in, how come it’s not law yet? I almost have to laugh at that because there is so much energy being devoted to this. Our legislature has a lot on their plate, but at the same time they are working on this. And they’re doing a good job of it too, I think. Even the legislators that are a little sketchy on the whole concept, like yeah maybe they didn’t really vote for this initiative or, you know, they might have been adamantly opposed, they still get the fact that the voters want it. And they’re moving that way with respect, you know, for what the voters asked for.

So yeah, they’ve got to get the criminal statutes in line by February 24th, and then immediately there after there’s going to be a couple of bills coming out, I suspect, that will define kind of a regulatory framework, kind of the broad brush strokes for the regulatory environment. And then they’re going to hand it off to a marijuana control board to work out the details.

Matthew: Okay marijuana control board, and so in a lot of states it seems like the people that are in charge of regulating alcohol become the default same people to regulate cannabis. Is that’s what’s going to happen then or does it sound like a different group all together?

Bruce: Yes and no. Under the terms of this initiative, the default regulatory body is the Alcohol Control Board, and then the state legislature has the option of creating a separate Marijuana Control Board. Our position all along was that we wanted to see a dedicated Marijuana Control Board so that they could focus on marijuana specific issues and also not bring with them any potential conflicts of interest of historical baggage associated with the alcohol industry. What’s happened is sort of a hybrid. It sort of looks like what we’re going to end up with is a separate marijuana board, but housed underneath the Alcohol Control Board or actually the Director of the Alcohol Control Board which is actually an okay thing.

And there’s a few factors driving that. One is just the schedule. To create a separate Marijuana Control Board, you know, the legislature has to create a bill, and then they have to, you know, the governor has to sign off on it then they have to staff it. They have to find a home for it, and you know they wouldn’t get started on a regulatory process until June or July. And then there’s also a budget consideration, and we’re kind of hurting right now with oil prices being so low. So both of those things combined sort of point you towards sticking with an existing body which brings it back to the existing Alcohol Control Board.

The director of that board, Cynthia Franklin, is actually, she’s dialed in. I met with her the day after the election and talked with her at length about this. And she was already pretty up on a lot of the issues related to this initiative and marijuana legalization. So what we’re sort of hoping for at this point is that she will be the director, but there will be a separate dedicated Marijuana Control Board working with her and with her staff in her office to craft these regulations. So in terms of budget and schedule and everything else this sort of hybrid approach I think is going to be the best.

Matthew: Okay, and in terms of licenses will it be a cultivator and then maybe a processor and a dispensary license? Is that ironed out what they’re thinking?

Bruce: Under the terms of the initiative there was sort of four general categories and you identified three of them. So there will be a grower on one end, a retailer on the other end. And then the other two permits would be a processor, you know, somebody that’s doing edibles or concentrates, and then testing, testing labs and breeders. I’m trying to think of the right term for that, but research I guess would be a more general category. So those are sort of the four that were articulated.

I have a feeling that we’re going to end up with a few more permits at the end of the day. For example on the grow side we might have a number of permits. Sort of a tiered approach where you might have, you know, smaller growers, larger growers, you know, and somewhere in between. And then I would envision having sort of specialty permits for, you know, special events like a cannabis cup sort of thing. They have something similar on the alcohol side, and so I think at the end of the day we’re going to have more than just the four permits on the marijuana side.

Matthew: Okay. Now I heard there is kind of some talk about creating some cannabis social lounges and things like that. Is that just rumor at this point or do you know anything about that?

Bruce: Yeah I do. It’s more than rumor, I mean there’s definitely some motivation to that, and I think that there’s definitely a market for that. The real question is timing. You know we’re in the midst of a huge social change, you know, with regard to the attitude towards marijuana. And so I’m perhaps overly sensitive to the optics associated with it. You know, if somebody wants to set up a club and you know, invite people in to smoke marijuana, that’s okay to a point. But I think, you know, folks just have to recognize that anything that they do early on that reflects poorly on the industry could hurt us in the long run. So I’m hoping that most people will kind of sit back and let the regulatory process play out and open those kinds of facilities next year when the rules are really clear, when everybody’s kind of comfortable with the rules as they exist at that point.

Matthew: Okay. And so you mentioned before, you know, a lot of people came out to vote, but on the street level it’s just to reiterate people are kind of like what’s happening with this, what’s going on, why isn’t it law yet, but the majority seems to be in favor of it still would you say, at the street level.

Bruce: I think so. And you know it’s hard to say because I don’t think there’s been any polling done since November. Our goal is to see, you know CRCL, we want to see this done in a way that even the 47% of the population that were the voters that did not vote for this, we want them to be comfortable with us. Because at the end of the day it’s kind of a group thing. I mean this is public policy at work. And I think it’s really important, not just in Alaska but nationally that you know, people are sensitive to the fact that social change is tough. Some people have a hard time recalibrating on the fly like this. I mean obviously I’m okay with it. So I’m comfortable with the marijuana culture, you know, I understand what it is and what it’s not. Some people don’t have that background, that prospective on it.

And so I think it’s really important for advocates to recognize that we got to go slow and we’ve got to be sensitive to other people’s legitimate concerns. Yeah there are legitimate issues of, you know, child safety and you know packaging and marketing and stuff like that. So I’ve got to run around the tree here on this, but my sense is that support has not diminished, and I think it might actually be growing. I think people who were opposed hopefully they see that rational, reasonable people are involved with the rule making process, and if we can do it right, you know, I think this can become a reference point for other states to follow us.

Matthew: So just in reviewing here, November 2014, Alaskans voted to make legal recreational or adult use cannabis. February 24th is when all the statutes and so forth have to be changed?

Bruce: Yeah that’s when the law goes in effect, and that’s when the criminal statutes really need to be changed because you know, like right now, today, if my buddy was to go to his friend and say hey here’s a half ounce of my best bud, knock yourself out, so to speak. You know that would be a criminal offense. On February 25th, not at all, zero offense at all. Not even a misdemeanor.

Matthew: And for people in Alaska or outside of Alaska that want to create a dispensary or grow cannabis in Alaska, how arduous or difficult does it sound like it’s going to be to get a license compared to other states? Is it something, you know, where there are some states in the Northeast where you have to demonstrate you have $2 million of working capital or, you know, is it going to be something like that or is it going to be a little of a lower bar?

Bruce: You know it’s hard to say because that rule making process hasn’t begun yet, but I think there’s definitely, well, I suspect that there will be a biased toward Alaska based business, you know, residents of Alaska starting a business. There may well be a regulatory require that you know 51% ownership has to be somebody who has lived in the state for a period of time. That’s needs to be ironed out, but that kind of thing has been part of the discussion pretty much since the day after the election. In terms of actually getting a permit, I hope that it’s a fair process. So you know not a lottery system for example. I don’t think that that’s the way to go. Most of us agree on that. I’m hoping there will be some sort of a weighted system where, you know, where you show up and you’ve got a business plan and you’ve got a security plan and company personnel profiles and so forth.

The local, the community input is going to be significant. I know in Anchorage for example, the Anchorage Assembly has already said that they’re going to look to their individual community councils for guidance. So for example in my part of town, if my community council is supportive of a marijuana business of any sort, that’s going to help me get a permit. If they’re opposed to it, that’s going to be a huge obstacle to overcome. Again, that’s just another reason why we collectively need to be super sensitive to public opinion on this because, you know, if a hundred people show up to a community council and say heck no, I don’t want anything like that in my community, there’s a good chance we won’t get a business in that part of the city.

Matthew: Sure. So on a lighter note what’s it like to live in Alaska? I know a lot of people listening have never been there and may never get there. I mean we kind of have this vision of people wrestling with grizzly bears and eating every meal from a salmon out of the river and having pet bald eagles. I mean what’s it really like?

Bruce: You know it is much of that. Alaska is an amazing place. I came up here 19 years ago. I actually ran away from Los Angeles to be a Bush Pilot.

Matthew: Your story is just like Northern Exposure it sounds like, on a micro scale.

Bruce: Right, right except in that case the pilot Maggie was a different gender. Super cute, but yeah it’s a lot like that. And it’s funny because, you know, for anybody who is familiar with Northern Exposure, there are towns in Alaska that are just like that. It’s fascinating. I mean tiny little communities of a hundred people where everybody’s got the most fascinating life story. Yeah it’s very much like that.

But then on the other end you’ve got places like Anchorage and Fairbanks that are, you know, they’re small, urban cities like you’d find almost anywhere else. You know we’ve got paved streets and stop lights and stuff like. We do occasionally, actually we do often have moose walking right down the middle of the street. That’s not at all uncommon. I get them in my yard all the time. But it’s an amazing place. You know, I can drive up into the hills here and I could see glaciers on one hand and active volcanoes on the horizon, and they erupt on a fairly regular basis. So it’s a remarkable place. The people are cool. The scenery is breathtaking. It’s a pretty cool place to be.

Matthew: And how do you deal with the darkness that, what for how many months out of the year it’s just really quite dark? Is that an issue at all?

Bruce: You know it affects people. Different people react differently to that. In the summertime, you know, we’re all outdoors. In this part of the state we get like 20 hours of sunlight in the height of the summer and even at 2 o’clock in the morning the sky is light enough you could read a book by it. And that’s when everybody is outside playing. They’re hiking, they’re biking, they’re fishing. They’re doing all their outdoor stuff.

And then in the winter time everybody sort of moves indoors. You know there’s more movie watching, more hanging out with friends, more indoor concerts, you know, that kind of thing. So it definitely an effect on lifestyle. I just save up all my home projects and all my reading lists for the winter time, and then pretty much from Memorial Day to Labor Day I’m outside. And it’s an interesting dynamic. I mean the pace of life up here is very much driven by the cycles of the sun. Some people react negatively to it. You know they get really depressed with all the darkness and stuff. I don’t. I like it in the winter time. I mean on a sunny day an January this place is amazing. I’ll bring my camera out with me during the day just driving around because it’s an amazing place. And even in the winter it’s worthy of pictures.

Matthew: Wow, it sounds awesome.

Bruce: It really is. I was just going to tell you a brief little anecdote. Years ago I was flying along and I was coming back from a flight into Anchorage, and I called my niece on my cell phone. Don’t tell the FAA I did that. And I was describing it to her. I said yeah, you know, I’m looking off to the right, there’s these glaciers that are flowing out of the mountains down to the water, and the water’s all greens and blues and shades of ocean colors. And back behind the left wing there’s a volcano erupting. My brother got on the phone and he goes are you making this up? I’m like no, dude this is real. This is where I live. I’ll send you a picture.

Matthew: Gosh, that’s definitely a unique place.

Bruce: It is.

Matthew: Now for listeners that want to learn more about the Coalition for Responsible Cannabis Legislation, how can they connect with you?

Bruce: Okay well they can find us on Facebook and it’s just Coalition for Responsible Cannabis Legislation, or they can go to our website and www.crclalaska.org.

Matthew: Awesome. Any other information you want to give out?

Bruce: You know I think we covered all the main points. You know, we’re just, we’re looking forward to I think there’s going to be a lot of celebrations on February 24th. Hopefully everybody, you know, does consume responsibly and you know indoors and so forth. We don’t want to startle the rest of the population. But it’s going to be interesting. You know, I see even amongst those people who were initially reluctant, the elected officials, I’m seeing kind of a change in attitude. You know they’re kind of accepting that this is the direction we’re going in. You know it’s a fascinating process. You know, culturally, you know, I’ve kind of seen personally a 30+ year evolution here and I would not have dreamed 30 years ago that we would be here today talking about this. So it’s pretty cool. It’s pretty exciting, and you know, hopefully we’ll see some other states go this way.

Matthew: I agree. Well Bruce thanks so much for coming on CannaInsider. We really appreciate it, and I also want to give a shout out to listener Joshua for connecting me with Bruce. I appreciate that. Everybody have a great day.

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