High Rise coming to Kodiak

Jack Schactler has one final hurdle to jump before being allowed to open up  his cannabis retail shop in downtown Kodiak.

KODIAK — Plans to open a cannabis retail shop in downtown Kodiak received another boost when the Kodiak Island Borough Assembly approved a letter of non-protest following a public hearing on Thursday night.

The City of Kodiak City Council approved a similar letter in March, as Center Avenue storefront, High Rise, will be located within city limits. Applicant Jack Schactler now awaits state approval of the property. 

According to the city clerk, 208 property owners were notified of Thursday’s public hearing.

Kodiak resident Justin Thran voiced his support for the store’s approval.

“I think it’s a great idea because it means new tax revenue coming in,” Thran said. However, he stressed the borough should be careful when taxing sales of cannabis products, noting that some states have taxed it so heavily that residents stopped buying it.

“There are other states that have kept it at a nice happy tax rate are rolling in the dough,” he said.

Kodiak resident Mel Stephens, who owns property in downtown Kodiak, opposed the approval “in the strongest possible terms” in a written comment to the Assembly. He urged the Assembly to instead lodge a protest with the Alaska Marijuana Control Board.

Stephens noted that marijuana remains a Schedule I Drug at the federal level — listed on the same level as heroin, LSD and cocaine — and thus illegal to traffic or sell under federal law.

“The Kodiak Island Borough most certainly has an interest in preventing the establishment of criminal enterprise within this community,” Stephens wrote. “This interest can and should be protected by the issuance of formal protest against the issuance of the retail store marijuana license which is the subject of the above-referenced application.”

Alaska is one of 10 states that have legalized the recreational use of marijuana, in addition to Washington, D.C., Guam and the Northern Mariana Islands. Another 14 states and the U.S. Virgin Islands have decriminalized its use.

Dennis Symmons reiterated a past vow to treat cannabis retail shops like any shop that provides alcohol. However, he agreed with Thran’s comment about high taxation.

Alaska imposes a tax on growers at $50 per ounce for mature buds, $25 per ounce for immature or failed buds and $15 per ounce for trimmed products. The state collects no general sales taxes on it.

“I do happen to know what the black market is like and it is flooded here,” Symmons said. “One thing that stands out more than anything is no one would have the excuse to say, ‘We don’t have a retail store, and we will continue to buy it on the black market. That market is flooded here, it is cheap and very alluring to not be legal about it.”

He said if the borough wants to nurture the legality of the business, it shouldn’t get carried away with taxes.

Assembly member Julie Kavanaugh asked to abstain, noting that while she wasn’t opposed to having such a store, federal law conflicts with it. She added she had previously supported a growing facility in Bells Flats.

“With this new application, I’ve done a little bit more investigating, and I’m a little conflicted,” she said. “When I took an oath of office, I swore to support the Constitution of the United States, which is in conflict with the State of Alaska Constitution (regarding marijuana).”

She said she’s found that the U.S. Constitution tends to win in legal matters when it comes to conflicting laws.

“If we pass this and someone opens a shop or cultivation facility, they need to understand that it (our approval) doesn’t fully protect them from federal law,” Kavanaugh said. “I’m not against people using it, I just wish we were pre-Measure 2 of 2014 where it was left in a private-use situation where you didn’t drag me into deciding these things as a public official.”

Assembly member James Turner said he had no issue with the application. He added that while he understands Kavanaugh’s concern, Alaska voters approved legalization of recreational marijuana.

“Whether it was by a slim margin or not, this is what they want,” Turner said. “I don’t partake for a number of reasons, and if someone did, I prefer they didn’t do it next to me, but it’s their choice to consume.”

Assembly member Scott Smiley agreed with voters’ decision, calling it the bottom line for any decision. However, like Symmons, he noted that the state made a mistake in its taxing policy

“I think it’s really a travesty what the state did in terms of taxes on this,” Smiley said. “They turned an opportunity to drive the underground commerce in marijuana out of the state and clean up that whole rat’s nest. Instead, they reinforced it.”

Like Turner, he also noted controversy of the issue.

“I think we have to do it in a balanced method,” Smiley said. “We clearly have a model in the way we treat alcohol, especially in the sensitivity toward children, so that needs to stick around. But we need to get this off the ground and make it work, because that’s what the public wanted.”

Symmons said, given the number of states that have approved or decriminalized marijuana, the fault isn’t at their level.

“The fault appears to be with the federal government and not the people,” Symmons said.

Turner asked why he did not receive a notification as he lived within 1,500 feet of the proposed storefront location, later adding that he is a renter. Borough Mayor Dan Rohrer noted that notices are sent to property owners, not renters, adding that his business rents space in the same area.

Assembly member Rebecca Skinner asked whether it would be plausible to add conditions for the approval to not allow on-site consumption at cannabis retail shops.

According to Borough Manager Michael Powers, Schactler submitted his application to the state prior to the state relaxing its restrictions by allowing on-site consumption.

“The application reflects the rules that were in effect at the time of the application,” Powers said. Should Schactler wish to amend his application, Powers said the state process would need to be restarted.

Rohrer noted that the borough’s ordinance on marijuana retail shops prohibits edible products to be sold. The borough’s ordinance will be sent to the state control board along with its letter of non-objection.

The Assembly approved the letter of non-objection in a 5-0 vote. Assembly member Andy Schroeder was absent while the Assembly allowed Kavanaugh to abstain. Under the borough code, Kavanaugh’s abstention will be recorded as siding with the majority vote.

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