As Alaska’s legal cannabis industry approaches its five-year milestone, we sat down with Alaska Marijuana Industry Association Executive Director Cary Carrigan to discuss the state of the industry, the lessons learned and what’s ahead for legalized cannabis.
AC: It’s been nearly five years since Alaskans voted to legalize marijuana. What’s changed in that time?
Carrigan: From the starting point to now, there was no industry. There was just a vote, so there were no retailers or cultivators or anything, so it’s changed a lot. We’ve gotten mature, I think, and we’ve gotten to a point to where at least we have an idea of what we’re doing. When we started, everybody was clueless, everybody was flying blind.
Part of the whole process that we’ve been going through over the last several years has been one of education, because after the vote happened, it’s not like everyone became enlightened. They had the knowledge that they had before, then we had a vote and the industry was happening. It’s still a process and we’re still going through it. We’ve gained a lot of ground, we’ve gained a lot of information that we didn’t have about how you deal with things, but it’s weird. You can’t just fly into something like this and expect everything to hit right and everything’s going to unfold in the manner that you think because there’s no guarantees.
So, it’s been a learning process for us, too. It’s not just a matter of educating the public; we’re trying to be educated so we’re more effective and more valid as an association, too.
As far as operating in the legal marketplace, who went online before us? There wasn’t a lot of models available for what you do. That’s why so many different states have so many different approaches. Everybody was in the same boat that there was no model. We made the rules; there were no rules.
AC: Hindsight is 20/20. Is there anything that you’d want to say if you could go back when the industry was getting started or even when they were writing the initiative?
Carrigan: I think part of it is education. It has been from the start and it still is now. If there was one thing that I could change is the educational component to make sure that everybody understands (legalized cannabis).
Right now, we’re working to make sure younger kids are educated and understand that it’s something they don’t need to be doing, and we’re figuring out the approach that’s best for that, but we’re still working on the educational process. What’s really interesting is that the more people who’ve been able to understand what’s going on and have been able to understand what we’re doing, the more acceptance we have achieved.
Education is really the key. I think that’s something we understood in a basic way going in, but we’re really focused on that now.
AC: Are you talking about education of the general public?
Carrigan: Yes, it’s about the general public, but it’s also about legislators and police. Yes, they have an understanding of it, but they understand it from the legal perspective of when they were doing enforcement of it. But everybody has for the longest time been told cannabis is bad, it’s evil. They’ve been told the same propaganda over and over again. We have to convince them that it’s not through an education process.
AC: Speaking of change and education, we’ve seen quite a bit of change on the federal level already. There’s been interest in Congress to pass measures that would help out states where cannabis is legal. What would you like to see on that front?
Carrigan: Well, the first thing that we’re working on changing is banking. We’re not concerned about trying to make all cannabis legal and have a free-for-all. That’s not what we’re after. What we want is a measured approach that approaches that realistically. To be honest, if all of the states were legalized, it’d be a real free-for-all because every state has got different ways which they’ve approached it and solutions they’ve implemented to make a legalized market possible.
There are still serious issues that need to be addressed. Banking is one, which I’m working on with the American Trade Association for Cannabis and Hemp. They’re working nationally because banking is something that we really need. If we could operate like legitimate businesses do, if we could operate under that same set of rules and restrictions that other people do so that we could bank, we could do commerce and we could get the tax breaks. Those are big things. Banking is really the first hurdle to jump.
Being a cash business is really unsafe, and that’s how we’ve promoted this nationally. This is a safety issue.
AC: What kind of changes would you like to see on the state level? How about changes to the $50 per ounce tax?
Carrigan: The tax structure was something that was put in to make it easy for the ballot proposition. You could think of it as a political solution to what was a difficult problem; if we want to make sure people understand how it gets taxed, why don’t we say X amount of tax is what would be applied, and people could look at it and go, ‘OK.’ That got put on, but it wasn’t really a viable solution because the price has fluctuated and dropped. It makes it difficult.
Some people have had — and are having — problems with the tax burdens that are put on cultivators. I’d like to see the taxes be on the retail end. That’s my personal preference, but there are other people who say it should be spread out through the process.
The consumer is really where the tax needs to lie, but how you get that done is more involved in that. We’re involved with the Department of Commerce, the Department of Revenue, and there’s a group of us who are all sitting and working through it. It’s also a statute that needs to be changed, so the Legislature needs to be involved and that’s another hurdle to get over.
There are people in the Legislature who are trying to help the industry move forward, so there are a lot of moving pieces that need to grind forward. It’s government, so it’s going to take some time.
AC: We’re nearly a year into the term of Gov. Mike Dunleavy, who started out by appointing a person who had campaigned against marijuana to the Marijuana Control Board. How would you describe the relationship between the administration and the industry, and has it changed since that appointment?
Carrigan: It’s been a little bit difficult to develop that relationship, initially. But a part of that is a function of education as well. It seems that every time we deal with a group of people who haven’t had a lot of experience dealing with cannabis, then we end up making the educational argument again with them. We get people educated, and once they understand, they go, ‘Oh, OK then we should be doing this.’ It’s kind of like driving a car, and you’re going ‘Oh, man. I’m having trouble driving at night,’ then you find the switch on the blinker to turn on the lights. It’s like that. It’s not like they can’t drive a car or they don’t have a set of keys, but they don’t know where the switch is for the high-beams or know how to work the radio. It’s all the little nuances of knowledge that you would have if you’ve been involved for a while or if you understood the industry in depth as the people who’ve been involved in the legal industry like we have.
We’ve been the guys who say, ‘Here’s the high-beam switch, here’s the radio switch.’
AC: Are you feeling more optimistic about the relationship with the administration now?
Carrigan: Oh, hell yeah. Initially, I think there were efforts they thought would be beneficial, but we saw it as it making things too complicated. You can’t put someone in the driver’s seat who doesn’t know where the high-beam switch is. We would have had to educate people who didn’t have the background and experience in the industry. That’s why (Bruce) Schulte is such a good appointment (to the Marijuana Control Board). (See story, Page 17) He’s already been on the board and he’s been in this since the get-go. There is a certain amount of confidence that comes from having someone of his caliber put into that seat.
AC: How are things going on the regulatory front in Alaska?
Carrigan: There are still things that need to be done with the regulatory structure to make it more accepting of the industry that they work with. I feel like sometimes it’s difficult from a regulatory standpoint because a number of things are happening. The background of enforcement is all police work, so they have that mindset of this was illegal for a long time.
So now they have become more understanding of the fact that the legal industry is actually working to try to do the right things and make the right moves to operate inside the structure that has been set down by the state. But it’s been tough, because that part of it, that operating within a regulatory structure, has been a learning process for us.
It’s been a give-and-take thing with all the regulators, all the regulatory people and all the people putting together statutes in the Legislature. They’re very well-versed in that and we weren’t. I think it becomes a matter of knowing what they’re thinking, and they need to know what you’re thinking, but we’re all learning at the same time.
Early on, it was a lot like this. There was a lot of us not totally understanding the regulatory structure just like they’re trying to make regulations that work for marijuana even though this knowledge base of cannabis wasn’t something that everybody working in the regulatory structure had.
Look at what has transpired in that time. We’ve been able to state the problems that we’ve had, and we’ve been able to work forward. It needs to be a system where everybody is on the same playing field, everybody has the same rules, everybody has the same knowledge and then we can move it forward. That’s what’s been difficult. It’s not that the regulatory people are trying to do bad things, they’re trying to do regulation just like the legal growers are trying to grow now in a legal environment. Everybody is trying to work in the same direction but we’re coming from opposite ends of the spectrum.
AC: What’s your attitude about the black market, and what would you like to see happen on that front?
Carrigan: We would like to see everybody step forward and be operating inside the legal environment and be tested and be regulated and be taxed and be providing money into the state coffers and be doing the best possible for everyone in the state of Alaska. That’s what the legal industry wants, but these people come from somewhere, so we’re accepting of them making that transition. That’s a whole other dynamic that’s going on inside the state of Alaska. That’s something that needs to be addressed. I think fixing that tax structure is going to help. When we make it more profitable to be inside of the legal arena as opposed to working in the black market world, then we’re going to get more cooperation and more compliance, and our reputation is going to be enhanced by that.
AC: What else is ahead for the industry? With where the market is, do you think there’s a chance that big players start to take over? Or will there be room for smaller growers?
Carrigan: There are people who want to be able to play on the federal level because they see how much money there is to be made. It’d be like right after Prohibition. There are people who want to be big players and want to be nationally recognized brands and people talk to me about that all of the time. You know that 80 percent of the licenses in Washington state have already changed hands? 80 percent! There are going to be changes that happen like that, where things are going to transition, and I’m sure there will be some big national players like American Cannabis — ‘Smoke American Cannabis!’ kind of stuff — but at the same time if you had the chance to smoke American Cannabis or you’re traveling in Alaska and have the chance to buy local, you’d probably say, ‘Oh, I’ve never had that.’
It’s kind of like microbreweries.... The bottom line was these smaller people that did craft brewing is they made a big dent in the marketplace. The big guys still sell a bunch of beer, but still the craft does very well. I think that same dynamic will apply to the marijuana industry in the long run.
AC: And where do you see growth for Alaska’s cannabis industry?
Carrigan: I would like to see canna-tourism become something that the state does. I think that in the atmosphere that we’re in because we’re a beautiful, pristine tourist location, and I think if we play our cards right we can become a No. 1 destination for people who want to come and visit the wilderness and see the beauty of Alaska while enjoying themselves a little bit and enjoying some cannabis. I think canna-tourism is going to be one of the big things that pops up for us.
Matt Buxton is a freelance writer in Anchorage. Comments about this story? Email editor@AlaskaCannabist.com.