Industry opposes Anchorage pot tax, excessive regulations

Two separate items coming before the Anchorage Assembly will shape the state’s largest market for commercial cannabis for years to come. And industry representatives are worried it’ll be for the worse.

Cannabis Plant. (Photo by U.S. Fish and Wildlife Service)
Cannabis Plant. (Photo by U.S. Fish and Wildlife Service)

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On Tuesday, the assembly will get its first glimpse of AO 2016-3, the ordinance determining where marijuana businesses can operate around the city.

The initial proposal came from the mayor’s office, and recommendations were added by the Planning and Zoning Commission, according to Municipal Attorney Bill Falsey.

“The question is, what does this ordinance do?” Falsey asked during a telephone interview. “In brief, it would govern which zones a marijuana establishment could be located in. It would also address how far a marijuana establishment would have to be separated from certain other uses like schools and parks.”

The current recommendations don’t endorse an option for retail businesses in residential areas–a model compared to the popular Fire Island bakery in the South Addition neighborhood. Instead, the zoning map only makes licenses available in certain non-residential parts of the municipality.

“The emphasis is on commercial and industrial areas of town,” Falsey said.

The other issue before the Assembly is a potential sales tax of five percent on cannabis products. If approved by the body Tuesday night, the tax proposal will go before voters on the April ballot.

The measure’s sponsors say the tax is necessary to cover local costs for enforcing regulations, and gives the Assembly the ability to raise or lower the tax by two percent every other year, with a ceiling at 12 percent.

But Bruce Schulte, an industry advocate who sits on the state’s marijuana control board, thinks that while a tax is reasonable, the logic and structure behind the current version are not.

“That’s not a mechanism applied to any other industry in Anchorage,” Schulte said of the biennial increase clause.

State regulators are tasked with monitoring compliance among new marijuana businesses, Schulte added. He sees the tax as resting on an unproven assumption among Anchorage law-makers that more local enforcement will be necessary.

“What we’re seeing is this sort of knee-jerk reaction where people are just assuming that this industry is bad and awful and nobody wants it next door,” Schulte said. “They’re honestly regulating it more like toxic waste dumps.”

Schulte has worked with the Anchorage Assembly for months preparing regulations, but he’s recently grown frustrated by elected officials as they craft laws. He and other commercial interests feel that the growing layers of regulation are unnecessarily burdensome, and hurt the industry’s chances of becoming a viable alternative to the black market.

“Anchorage seems to be doing everything they possibly can to kill it before it gets started,” Schulte said.

The Assembly will take public testimony on the tax proposal ahead of its vote on Tuesday evening, after 6 p.m. in the Loussac Library.