When Alaska voters approved legalization of recreational pot and retail sales of marijuana products in 2014, they also approved the right of local governments to ban commercial marijuana grow operations or pot sales within city limits. Two cities in the Matanuska Susitna Borough have opted to ban marijuana sales and grow operations. But Houston is aiming to bolster its city revenues with legal marijuana commerce. Alaska Public Media’s Ellen Lockyer spoke with Houston mayor Virgie Thompson on how that could shape the city’s future.
Houston is a 22 square mile entity in the middle of the Matanuska Susitna Borough. The Borough communities of Palmer and Wasilla have banned pot sales, but Houston is bucking that trend.
Mayor Virgie Thompson says the city survives on property taxes, sales taxes and state revenue sharing. With Alaska’s state finances heading downward because of the drop in oil prices, state help is dwindling. Thompson says, last year, the city couldn’t meet it’s budget.
“And we ended up actually having to furlough employees at the end of the last fiscal year, because we didn’t have the funds,” Thompson said. “We continued to pay their insurance, but we did have to furlough them from their daily responsibilities.”
Houston also had to shutter its police department to pay for other city services.
Thompson says the Houston City Council views marijuana retail as an opportunity. Thompson says, city voters turned down a city initiative banning commercial pot during the last city election.
“We voted on it not once, but twice, and the second time, it was also the residents wanted marijuana,” said Thompson. “So, done deal. Now we are going to have to deal with it. This is what the people want.”
A city ordinance introduced in February aims to regulate commercial pot grow operations and retail sales of cannabis products. If it passes, Houston will be an island of legal pot in a Borough the size of West Virginia.
This is not the first time Houston has taken its own path. Houston allows the sale of fireworks, which are prohibited throughout the Mat Su Borough and Anchorage. Thompson says the sales taxes on Roman candles help pay for emergency services, such as fire response, and the income from pot excise and sales taxes could cover expenses of a new city police force.
A public hearing on the city pot ordinance earlier this month drew a large crowd. One of the sticking points in the legislation is “on site” consumption of marijuana products. The initial ordinance language prohibited on-site consumption, and Thompson supports that.
“They buy their ounce, and they put it in the trunk of their car, and they’re gone,” said Thompson. “What they do after that, I’m sorry I don’t know, but as far as on-site consumption and someone sitting in a parking lot out by the retail place, and smoking, that’s not going to be allowed. That’s the way it is. ”
Thompson says the city’s proposed land use ordinance would create zoning to designate areas for grow operations or cannabis products shops. A 2% city sales tax on products and an excise tax of 8 to 10 % an ounce has been proposed at the cultivation stage.
But at the council meeting, an amendment changing the ordinance to allow on -site smoking in commercial and Parks Highway zones was put forward, and debate over it has delayed a vote until after a second public hearing.
The mayor says the city code ought to follow state marijuana regulations, rather than breaking new ground.
“If we do something different from what the state is allowing at this point in time, then it is our responsibility to police that,” Thompson said. “My opinion is, we should take baby steps, I don’t think we should be taking everything on at the same time. ”
Land rich Houston has the potential to attract marijuana grow operations, which in turn could supply other cannabis operations, Thompson says. The city has a sales tax, but too few businesses to contribute much to city coffers. The Houston City Council will take public comment on the ordinance on March 24.