Marijuana revenue

The Alaska Marijuana Control Board could soon be asked to approve clear—and sometimes harsh—fines for those stepping out of line of the state’s rules and regulations on the industry, and most in the industry say that’s a good thing.

At a work session in mid-March, Alcohol and Marijuana Control Office regulators, Marijuana Control Board members and industry members sat down to discuss a slate of changes to the state’s fine schedule. At the heart of the work was a survey of industry members about would be appropriate fines for the first, second and third violation of everything from operating without a license to allowing odors to be detected.

Alaska Alcohol and Marijuana Control Office Director Glen Klinkhart explained in an email exchange with the Alaska Cannabist that the goal is to set clear fines that the industry thinks are fair because the fines are ultimately about getting compliance with the rules to ensure the industry keeps running smoothly for everyone involved.

“The biggest reason for this approach was the current fine and penalty system was arbitrary (first offenses could be up to $10,00 per violation so they could be ANY amount between $0 and $10,000 for a first offense) and there was no consistency in how or why fines and punishments were levied against licensees and the public. All we had was a hammer and you know what they say when you give someone a hammer, ‘everything looks like a nail,’” he said.

“As a long time police officer I know when I write someone a ticket for failing to stop at a stop sign or for speeding how much the fine is. The defendant knows how much the fine will be and they also know the process for contesting the ticket. In the marijuana this was not always the case. Often the penalty was left up to the person sitting in my chair, which is not a good way to operate as leaders and their attitudes can change. All of this led to inconsistent, unfair and penalties so high and potentially inappropriate that it can cause a great deal of anxiety for the licensees who may have had only a minor incident.”

While a vast majority of the fines proposed by the industry would sit in the $100 to $500 range depending on the frequency of the offense, industry members sought particularly harsh fines for acts that they see as undermining the legitimacy of the industry like adulterating products, extracting concentrates without a license, selling to minors, knowingly providing false information on an application and cheating potency tests.

But the biggest fine was aimed at those operating a marijuana business without an approved license. One respondent put the suggested fine at $600,000.

Shelton Landon, the owner of Anchorage Bowl, said during the work session that he didn’t think there was a fine high enough for knowingly operating without a license. He added that he ran into problems when he first opened thanks to the web of regulations from the state, city and fire department, but said he couldn’t stand someone making multiple violations.

“Depending on the circumstances but if you actually knew you had no license to operate and it was clear that you had no licensed to operate, for me, there is no number high enough. I would be kinda crazy with it, you’re talking $50,000,” he said. “I don’t think that we should take lightly that there are people out there that are purposefully violating some of these laws that we worked very hard to even get on the books to even get here to this date. We worked hard to get here and worked hard to get the community to support us here. Some of these violations just cross the line.”

However, support for fines and higher fines wasn’t universal. The survey results, which are anonymous, show some respondents worried that the rules and regulations could go too far. Some participants in the meeting wondered if some things should carry fines at all for the first offense.

When it came to tough fines, Klinkhart noted that “the industry was sometimes harder on themselves that I, the AMCO director, might be.” He chalks it up to a maturing industry and said the new, clearer fines would make life easier for everyone involved. Klinkhart noted that the rules still allow room for discretion on the part of the regulators and board to sift through what would be an intentional violation of the rules and what would be an honest mistake and corrected.

“It really tells me that the industry wants, and needs to have regulation, and that they want their industry held to a high standard,” he said. “This also paves the way for a process much more like ‘traffic court’ where a licensee who has been ticketed can simply pay the fine, live, and learn. Or they come before the board and argue their case. This system seems actually fairer, faster, and more likely to get people into full compliance.”

Marijuana Control Board member Bruce Schulte agreed during the hearing, saying he’s hearing that people want the industry to abide by the same, fair rules.

“A recurring theme that I keep hearing is the industry wanting the state—us, AMCO, the board—to hold others accountable because the vast majority of these licensees are doing everything they can to follow the regulations and they want to make sure everyone else is required to do the same,” he said. “The fines, I think, may be motivational and not the heaviest sanction imposed.”

The final proposal and recommendations would be put to the full Marijuana Control Board for consideration later in 2021.

Matt Buxton is a freelance writer in Anchorage. Comments about this story? Email jstricker@AlaskaCannabist.com.

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