Legislature(2015 - 2016)CAPITOL 120

03/06/2015 01:00 PM House JUDICIARY

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01:02:00 PM Start
01:02:10 PM HB79
02:30:26 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
        HB  79-MARIJUANA REG;CONT. SUBST;CRIMES;DEFENSES                                                                    
1:02:10 PM                                                                                                                    
CHAIR LEDOUX announced  that the only order of  business would be                                                               
HOUSE BILL  NO. 79,  "An Act  relating to  controlled substances;                                                               
relating to  marijuana; relating  to driving motor  vehicles when                                                               
there  is  an open  marijuana  container;  and providing  for  an                                                               
effective date."                                                                                                                
REPRESENTATIVE LEDOUX  further announced  that the  Juneau Police                                                               
Department (JPD)  would demonstrate and offer  visuals of various                                                               
forms of cannabis,  and that the committee would  not be speaking                                                               
to the actual bill.                                                                                                             
1:02:26 PM                                                                                                                    
LEE  PHELPS,  Detective,  Drug Enforcement  Unit,  Juneau  Police                                                               
Department (JPD),  said he  was asked to  bring marijuana  to the                                                               
committee meeting  in different  forms and weights.   [Throughout                                                               
his presentation  he did not  identify which package  of cannabis                                                               
he was  referring.]  He  held up clear baggies  that represented:                                                               
one or more pounds of cannabis;  one ounce; one gram; five grams;                                                               
and seven grams of cannabis.                                                                                                    
CHAIR LEDOUX questioned the cost on the street.                                                                                 
DETECTIVE PHELPS  replied that one  gram of marijuana  is roughly                                                               
$20, an ounce  is roughly $50-$60, and one-half  pound is roughly                                                               
$180-$240.  He  advised that many of the prices  vary on how well                                                               
an  individual  knows  the  dealer  as  it  is  not  an  industry                                                               
1:05:07 PM                                                                                                                    
CHAIR LEDOUX  asked for clarification  that one ounce  is roughly                                                               
DETECTIVE PHELPS answered "I believe so, yes."                                                                                  
CHAIR LEDOUX advised she had heard  that in Anchorage an ounce is                                                               
roughly $300.                                                                                                                   
1:05:29 PM                                                                                                                    
DETECTIVE PHELPS qualified  what he had advised  the committee by                                                               
stating "I don't really deal with  marijuana that much.  My focus                                                               
is on heroin,  and meth amphetamines."  He advised  that he spoke                                                               
with a prisoner in order to  understand the different prices.  "I                                                               
am basing this  off of what he  told me."  He  reiterated $20 per                                                               
gram, $50-$60  per one-eighth,  $100-$120 per  one-quarter ounce,                                                               
$180-$240 per one-half pound.                                                                                                   
1:06:16 PM                                                                                                                    
REPRESENTATIVE LYNN asked how much  is legal for an individual to                                                               
DETECTIVE PHELPHS said he was  not sure with the voter initiative                                                               
and advised  that JPD and  the Alaska District  Attorney's Office                                                               
(DA) is waiting to see what to do.                                                                                              
CHAIR LEDOUX advised Representative Lynn that it is one ounce.                                                                  
REPRESENTATIVE LYNN  held up a  package and asked  whether amount                                                               
in the baggie was legal.'                                                                                                       
[NO VERBAL RESPONSE.]                                                                                                           
REPRESENTATIVE LYNN asked the cost of marijuana on the street.                                                                  
DETECTIVE PHELPHS responded that he was not sure.                                                                               
1:07:22 PM                                                                                                                    
DETECTIVE  PHELPS answered  Representative Claman  that the  cost                                                               
for one-quarter  ounce is  approximately $100-$120,  and one-half                                                               
is $180-$200 ounce.                                                                                                             
REPRESENTATIVE  CLAMAN  opined  that  in  referring  to  one-half                                                               
ounces the likelihood of multiplying  the one-quarter by four and                                                               
there would be a range of the price for an ounce.                                                                               
DETECTIVE PHELPS answered in the affirmative.                                                                                   
REPRESENTATIVE LYNN said  he was passed a note that  one ounce is                                                               
approximately $300 on the street.                                                                                               
DETECTIVE  PHELPS offered  that  Anchorage  prices are  different                                                               
than  Juneau  prices  as  they  vary  and  that  Juneau  is  more                                                               
1:08:26 PM                                                                                                                    
DETECTIVE PHELPS demonstrated  a one ounce of hash  and a baggie;                                                               
plus five grams  that was representative of hash  oil, and stated                                                               
that  JPD  destroyed all  of  their  recent  evidence.   He  also                                                               
presented different pipes to smoke cannabis and hash.                                                                           
1:09:33 PM                                                                                                                    
REPRESENTATIVE  CLAMAN  asked  if  the pipes  were  purchased  in                                                               
stores or seized as property in cases.                                                                                          
DETECTIVE PHELPS  said he was demonstrating  different pipes that                                                               
were unused and seized, but no longer evidence.                                                                                 
1:10:02 PM                                                                                                                    
REPRESENTATIVE  GRUENBERG noted  that under  Ravin v.  State, 537                                                             
P.2d 494 (Alaska  1975), an individual is allowed  four ounces in                                                               
their home.                                                                                                                     
DETECTIVE PHELPS advised that he was not exactly sure.                                                                          
REPRESENTATIVE  CLAMAN  stated  that   Ravin  does  not  actually                                                             
articulate   any    quantities,   but    subsequent   legislation                                                               
articulated that four ounces at home was legal under Ravin.                                                                   
1:10:43 PM                                                                                                                    
REPRESENTATIVE GRUENBERG  asked if Ravin is  modified downward by                                                             
the initiative so  the legal amount is no longer  four ounces but                                                               
one ounce.                                                                                                                      
1:11:24 PM                                                                                                                    
KACI  SCHROEDER, Assistant  Attorney General,  Criminal Division,                                                               
Alaska  Department  of  Law (DOL),  responded  to  Representative                                                               
Gruenberg  that she  concurs with  Representative Claman  in that                                                               
Ravin  set  a  small  quantity  for personal  use  in  the  home.                                                             
Subsequent to Ravin, the legislature  passed a law that said four                                                             
ounces, and a case after that  said "it was reasonable."  The law                                                               
has been changed  several times since then and  the initiative is                                                               
currently the  law which says  one ounce or less,  she explained.                                                               
She further  explained that the  initiative allows for  one ounce                                                               
of marijuana and  six plants for personal use  where those plants                                                               
are grown.   She offered that  there appears to be  no real limit                                                               
in the home in cultivating and harvesting those six plants.                                                                     
REPRESENTATIVE  GRUENBERG  assessed  that one  ounce  applies  to                                                               
processed marijuana rather than the actual leaf.                                                                                
MS. SCHROEDER  said "that is  correct," as it is  counting plants                                                               
and weighing the leafy substance.                                                                                               
1:12:56 PM                                                                                                                    
CHAIR LEDOUX  remarked that  it is  at least  arguable that  if a                                                               
person has more than one ounce  of marijuana in their home and no                                                               
plants, that  the individual  would be in  violation of  the law.                                                               
But, she  opined, it  is also arguable  under the  Ravin decision                                                             
that the  individual might not be  in violation of the  law.  She                                                               
asked if that was a fair statement.                                                                                             
MS. SCHROEDER responded "that is fair."                                                                                         
CHAIR LEDOUX referred  to the initiative and  stated that clearly                                                               
whether  an  individual has  the  plants  or  does not  have  the                                                               
plants, one ounce or less is legal in an individual's home.                                                                     
1:13:51 PM                                                                                                                    
REPRESENTATIVE CLAMAN  noted that it appears  Detective Phelps is                                                               
more involved in  heroin and other street drugs, and  not so much                                                               
marijuana.   He questioned Detective  Phelps if he  has expertise                                                               
in terms of  marijuana processes and how it is  used in different                                                               
DETECTIVE PHELPS  said that he  spoke with an inmate  who advised                                                               
it takes  approximately six ounces  of marijuana buds  to produce                                                               
approximately one ounce of hash oil.                                                                                            
REPRESENTATIVE  CLAMAN  surmised that  in  terms  of his  regular                                                               
work,  Detective  Phelps  is  mostly  relying  on  a  cooperating                                                               
1:15:10 PM                                                                                                                    
CHAIR  LEDOUX confirmed  from Detective  Phelps  that the  liquid                                                               
provided by him is not really hash oil.                                                                                         
CHAIR LEDOUX asked a person does with [hash oil].                                                                               
DETECTIVE PHELPS  provided that it  can be smoked even  though it                                                               
is  liquid as  it can  be mixed  with tobacco,  or marijuana,  or                                                               
burned on a piece of metal and the fumes smoked.                                                                                
DETECTIVE PHELPS  responded to Chair  LeDoux that it can  also be                                                               
used in cooking  as the THC content in oils  are much higher than                                                               
marijuana.  He advised one gram  will last a user between one and                                                               
three weeks depending upon their tolerance.                                                                                     
1:16:29 PM                                                                                                                    
CHAIR  LEDOUX  referred to  concentrates  and  edibles and  asked                                                               
whether the sample is being used.                                                                                               
REPRESENTATIVE  CLAMAN questioned  whether  the concentration  of                                                               
THC is the same  from one oil to the next,  or whether it depends                                                               
upon manufacturing.                                                                                                             
DETECTIVE  PHELPS  responded  that  the quality  of  the  oil  is                                                               
different with  the various  concentrations of  THC.   It depends                                                               
upon how the THC is being  pulled out of the marijuana plant, how                                                               
much butane  or CO2 is used, how  much is vaporized off,  and the                                                               
amount of THC is dependent upon the cook, he explained.                                                                         
REPRESENTATIVE  CLAMAN asked  the difference  between [hash]  oil                                                               
and hash.                                                                                                                       
DETECTIVE PHELPS advised he could not speculate.                                                                                
1:18:25 PM                                                                                                                    
CHAIR LEDOUX  used the example of  a cookie that had  been around                                                               
for two-six weeks, whether it loses its potency.                                                                                
DETECTIVE  PHELPS said  "I  would  guess not  but  I  am not  100                                                               
percent sure."                                                                                                                  
1:19:19 PM                                                                                                                    
BRUCE SCHULTE,  Board Member, Coalition for  Responsible Cannabis                                                               
Legislation,  responded  to  Chair  LeDoux that  the  shelf  life                                                               
depends on whether it  is an edible or a raw  form product.  Many                                                               
marijuana products improve  over time as it  cures, sometimes for                                                               
months or  a year or  more, he  said, and edibles  will gradually                                                               
diminish over  time depending  upon how  it is stored.   It  is a                                                               
food product so  the quality of the food  would probably diminish                                                               
at a greater rate than the potency of the THC within, he noted.                                                                 
REPRESENTATIVE CLAMAN  referred to Mr. Schulte's  statement "that                                                               
it would  improve" and questioned  whether the value  was getting                                                               
more or less potent.                                                                                                            
MR.  SCHULTE responded  that the  potency  would not  necessarily                                                               
diminish, but the taste would.   He explained that when the plant                                                               
is  harvested there  is a  brief drying  period and  then a  more                                                               
extensive curing  period.  He  further explained that  during the                                                               
curing period  there are some  complex compounds that  break down                                                               
and   produce  different   chemicals  that   give  rise   to  the                                                               
distinctive taste  and flavor of different  strains of marijuana.                                                               
He  noted that  the  chemical  break down  can  last many  months                                                               
depending  upon  how   it  is  stored.    He   then  stated  that                                                               
exceptionally high  quality products are often  cured for several                                                               
months before they are ready to  use and for that reason they are                                                               
1:21:16 PM                                                                                                                    
REPRESENTATIVE CLAMAN assessed  that it was actually  a matter of                                                               
taste as opposed to potency that he was referring to.                                                                           
MR.  SCHULTE responded  in the  affirmative and  opined that  the                                                               
percentage  of THC  is fairly  consistent for  the first  several                                                               
months, but after  a few years it would start  to diminish due to                                                               
a breakdown of chemicals.                                                                                                       
MR. SCHULTE  confirmed to Chair  LeDoux that he would  expect the                                                               
potency to go  down after a couple of years,  whereas the quality                                                               
of the  product infused would  degrade far more rapidly  than the                                                               
potency of the infusion itself.                                                                                                 
1:22:06 PM                                                                                                                    
CHAIR  LEDOUX  questioned  whether  infusion  is  different  than                                                               
MR. SCHULTE answered "No," it  is a different terminology for the                                                               
same  process.   He  offered  that he  thinks  of  infusion as  a                                                               
broader, more general term  that encompasses different processes,                                                               
and not necessarily baking.                                                                                                     
1:22:29 PM                                                                                                                    
CHAIR LEDOUX noted her suspicion  that when an individual bakes a                                                               
brownies,  or cookies,  that they  put marijuana  in as  a spice.                                                               
She held  up a  sample and  questioned whether  there would  be a                                                               
needle  that infused  the sample  into  the already  manufactured                                                               
Hershey or Snickers bar.                                                                                                        
MR. SCHULTE  related that  if they were  making a  chocolate bar,                                                               
the manufacturer would  have heated chocolate that  would then be                                                               
mixed  with some  quantity of  hash  oil to  achieve the  desired                                                               
level  of potency,  which would  then  be poured  into molds  and                                                               
allowed to cool.  He explained  that it is very sensitive to heat                                                               
so manufacturers are  careful to control the  temperature as heat                                                               
is a key factor in producing edibles.                                                                                           
CHAIR LEDOUX  surmised that  a person would  not take  an already                                                               
manufactured Milky Way, Snickers or  Baby Ruth and stick a needle                                                               
into it and infuse it with marijuana.                                                                                           
MR.  SCHULTE  said  that  it   involves  both  a  process  and  a                                                               
philosophy.  He  stated he would not envision  an existing edible                                                               
product being simply injected with  hash oil as it would probably                                                               
taste disgusting.   In  terms of  philosophy, he  remarked, there                                                               
has  been  much  discussion  regarding  adulterated  products  in                                                               
taking existing  food products  with a  familiar form  and simply                                                               
infusing it  with THC.  He  related that it is  not something his                                                               
group  supports  due  to the  potential  confusion  over  infused                                                               
versus not infused products.                                                                                                    
1:24:41 PM                                                                                                                    
CHAIR LEDOUX  confirmed that while  Mr. Schulte's group  does not                                                               
support it, theoretically as a process could be done.                                                                           
MR. SCHULTE  answered that she is  correct, and his group  saw in                                                               
Colorado where some businesses were  taking familiar products and                                                               
either  infusing  them  or  coating  them  with  a  mixture  that                                                               
included THC.  He noted  that the process received negative press                                                               
and lead  to some confusion  on edibles  in a direction  he would                                                               
not like to see continue.                                                                                                       
CHAIR LEDOUX  asked whether the  people were sued by  the product                                                               
manufacturers that had the original unadulterated products.                                                                     
MR. SCHULTE  said he did not  know for certain, but  imagined the                                                               
companies were gearing  up to do just that.   He stated there was                                                               
much public outcry  against that practice and opined  that it has                                                               
been   all  but   curtailed.     Certainly   from  a   regulatory                                                               
perspective,  that is  something  his group  is  hoping will  not                                                               
happen in Alaska, he further opined.                                                                                            
CHAIR LEDOUX noted that it probably didn't taste very good.                                                                     
1:26:12 PM                                                                                                                    
REPRESENTATIVE GRUENBERG  asked if infusion is  allowed under the                                                               
initiative and bills.                                                                                                           
MS.  SCHROEDER  responded  that   infusion  is  not  specifically                                                               
mentioned in the initiative, but  there is nothing prohibiting it                                                               
as it  reads that  a person  can manufacture  marijuana products.                                                               
She said  she would have  to look  at the definition  of products                                                               
and accessories,  but infusion would  be decided on  a regulatory                                                               
REPRESENTATIVE GRUENBERG requested an answer  in the future as to                                                               
whether it is prohibited, and whether it should be prohibited.                                                                  
CHAIR LEDOUX  advised that  Ms. Schroeder's  answer stated  it is                                                               
not prohibitive.                                                                                                                
MS.  SHROEDER  responded  to Representative  Gruenberg  that  she                                                               
would have to  look at the definitions to determine  how broad it                                                               
is and believes  it is very broad.  She  advised there is nothing                                                               
that prohibits it specifically.                                                                                                 
REPRESENTATIVE  GRUENBERG asked  for  clarification  that with  a                                                               
broad definition  it would not be  prohibited.  In the  event, it                                                               
is not  prohibited, he related  that he  would like advice  as to                                                               
whether the law should or should not prohibit it.                                                                               
1:28:28 PM                                                                                                                    
MR. SCHULTE  opined that infusion  into the production  of edible                                                               
products is  absolutely contemplated and allowed  under the terms                                                               
of   the  initiative.     That   being  said,   he  offered,   he                                                               
wholeheartedly agrees that it should  be allowed as the manner of                                                               
consumption of  marijuana has evolved  quite a  bit.  Hash  was a                                                               
rarity  and hash  oil was  almost non-existent  [approximately 30                                                               
years ago].   These days,  he pointed out, a  significant portion                                                               
of  the  consumer base  is  edibles,  oils,  and tinctures.    He                                                               
remarked he had spoken with  medical patients who could not smoke                                                               
the  products and  consumed  it  to keep  their  appetite up  and                                                               
maintain  their body  weight.   He further  pointed out  that the                                                               
market and  habits of consumption  are skewed toward  edibles and                                                               
REPRESENTATIVE  GRUENBERG   questioned  his  testimony   in  that                                                               
Detective Phelps had said that  people thought infusion should be                                                               
MR.  SCHULTE replied  that  previously he  was  referring to  the                                                               
secondary  application of  THC to  an existing  familiar product,                                                               
such as, gummy bears.                                                                                                           
REPRESENTATIVE GRUENBERG  asked for clarification  that Detective                                                               
Phelps was speaking  about one specific type  of process, whether                                                               
that type of process is now  allowed under the initiative, and if                                                               
it is, should that limit the type of infusion prohibited.                                                                       
MR. SCHULTE submitted that the  adulteration of existing familiar                                                               
products specifically,  those that are child  friendly, should be                                                               
1:31:12 PM                                                                                                                    
REPRESENTATIVE GRUENBERG  questioned if it was  permissible to do                                                               
that under the initiative.                                                                                                      
MR. SCHULTE responded "I believe it is."                                                                                        
REPRESENTATIVE GRUENBERG offered to pursue that issue.                                                                          
MR. SCHULTE reiterated  that he was not speaking  of all edibles,                                                               
just the very narrow issue of potential safety of minors.                                                                       
REPRESENTATIVE  GRUENBERG said  he would  ascertain whether  that                                                               
was allowed under the initiative.                                                                                               
1:31:42 PM                                                                                                                    
CHAIR LEDOUX  asked what type  of infusion would be  banned under                                                               
the initiative.                                                                                                                 
MR.  SCHULTE opined  that the  initiative  allows for  reasonable                                                               
limits on packaging, which constitutes  packaging.  In hoping for                                                               
a  responsible  industry,  he  agreed   that  nothing  should  be                                                               
packaged that  unnecessarily invites children that  could lead to                                                               
misuse by those under 21.                                                                                                       
CHAIR  LEDOUX  stated  that  there  must be  laws  on  the  books                                                               
regarding adulterating  an existing product.   She further stated                                                               
that  someone   cannot  take  a   candy  bar,  and   without  the                                                               
manufacturer's  permission, infuse  it with  vodka or  gin.   She                                                               
remarked there  are other health  and safety laws  that probably,                                                               
with  the federal  or state  government,  prohibit those  actions                                                               
MR. SCHULTE replied that he could  not agree more and, if someone                                                               
[adulterated] existing  products he would expect  them to receive                                                               
a letter from a lawyer in short order.                                                                                          
MS.  SCHROEDER responded  to Chair  LeDoux that  the question  is                                                               
outside of criminal contacts, although  it sounded reasonable and                                                               
she agreed with Mr. Schulte.                                                                                                    
1:33:44 PM                                                                                                                    
REPRESENTATIVE  CLAMAN  observed  that there  was  a  distinction                                                               
regarding criminal  statutes having to do  with possession versus                                                               
what  may be  a regulatory  matter.   He  asked what  information                                                               
should be  listed on the  labels on  the packaging and  offered a                                                               
scenario of  a person that is  allowed to have one  ounce of hash                                                               
oil in their house invites their  friends over to dip gummy bears                                                               
in the hash oil  to eat.  He further asked  whether the person is                                                               
protected under  the statute  because a person  is allowed  to do                                                               
what  they like  at home,  rather than  someone infusing  Hershey                                                               
bars  that  are put  in  a  Hershey bar  wrapper  and  sold in  a                                                               
marijuana  store.   He said  it is  a different  topic than  what                                                               
people  may  choose to  do  in  their  homes with  quantities  of                                                               
marijuana or  marijuana derivatives  wherein they are  allowed to                                                               
do "pretty  much" what they  want to  even though it  might taste                                                               
MR.  SCHULTE   responded  that  he  agrees   they  are  different                                                               
considerations  in whether  it  is criminal  or  regulatory.   He                                                               
opined  the initiative  clearly envisions  a commercial  industry                                                               
operating under reasonable guidelines  of packaging and labeling,                                                               
which  his group  wholeheartedly  endorses.   In  turn, it  makes                                                               
provisions  for cultivation  and possession  in a  person's home.                                                               
He related that  the initiative is largely silent as  to what one                                                               
does with  those products in  their home.   He surmised  that the                                                               
Libertarian in him  would probably ague that  is the individual's                                                               
right as  long as they  are not  endangering children, but  it is                                                               
beyond  his  legal expertise,  he  said,  and  the scope  of  the                                                               
initiative.  He agreed they are  different issues and is not sure                                                               
what the proper answer would be.                                                                                                
1:36:43 PM                                                                                                                    
REPRESENTATIVE GRUENBERG asked when  Detective Phelps stops a car                                                               
due  to suspicion  of the  person  being under  the influence  of                                                               
marijuana, whether  that gives him  a right to search  the entire                                                               
car without a warrant.                                                                                                          
DETECTIVE PHELPS responded that when  a person is pulled over law                                                               
enforcement  does not  know  what  substance causing  impairment,                                                               
just  possibly  the  person  is   too  impaired  to  be  driving.                                                               
Speaking with  the person helps  them to ascertain whether  it is                                                               
alcohol,  a medical  condition, or  something else.   He  related                                                               
that when a  person is arrested for being under  the influence of                                                               
marijuana, law  enforcement can search  the car because  it would                                                               
be a search incident to arrest.                                                                                                 
DETECTIVE PHELPS  responded to Representative Gruenberg  that law                                                               
enforcement  could not  search the  trunk  of the  car, just  the                                                               
person's  immediate surroundings  otherwise  it  would require  a                                                               
1:38:32 PM                                                                                                                    
MS. SCHROEDER replied to  Representative Gruenberg that Detective                                                               
Phelps and  law enforcement  are on the  ground doing  this every                                                               
day and his  testimony sounded correct but she would  check.  She                                                               
noted there  is a  larger expectation of  privacy in  one's trunk                                                               
than in the  body of the car,  and there is a safety  in the wing                                                               
space within a person's reach.                                                                                                  
REPRESENTATIVE  GRUENBERG  said over  the  years  there has  been                                                               
"second  generation" legislation  in  that questions  have to  be                                                               
answered   after   the   initial  legislation,   one   of   which                                                               
generically, is the scope of  the search.  He requested something                                                               
in writing  on the  marijuana samples  before the  committee, and                                                               
what may  be different with other  drugs and alcohol.   He opined                                                               
it may  be similar to other  drugs but there will  be more people                                                               
smoking and using.                                                                                                              
1:40:29 PM                                                                                                                    
MS. SCHROEDER responded  that the initiative does  not change how                                                               
the  state  would  investigate or  prosecute  driving  under  the                                                               
influence as  far as search and  seizure laws so it  would all be                                                               
the same.                                                                                                                       
REPRESENTATIVE GRUENBERG questioned paraphernalia possession.                                                                   
MS. SCHROEDER explained that under  the initiative, possession of                                                               
paraphernalia alone is not a crime.                                                                                             
REPRESENTATIVE GRUENBERG surmised there is no probable cause.                                                                   
MS. SCHRODER responded "Right."                                                                                                 
1:41:26 PM                                                                                                                    
CHAIR LEDOUX  asked Dennis Casanovas,  Alaska State  Troopers, if                                                               
he  agreed  with the  responses  from  Detective Phelps  and  Ms.                                                               
1:41:44 PM                                                                                                                    
DENNIS  CASANOVAS,   Major,  Deputy  Director,   Central  Office,                                                               
Division of  Alaska State Troopers, Department  of Public Safety,                                                               
said he does not disagree with the testimony thus far.                                                                          
1:42:25 PM                                                                                                                    
CHAIR LEDOUX  referred to  the explosiveness  of butane  and hash                                                               
oil  and asked  whether hash  oil is  particularly explosive,  or                                                               
more explosive than cooking oil or any other oil.                                                                               
MR. SCHULTE  responded that hash  oil itself is not  explosive as                                                               
it is  a fairly  benign product.   He  opined that  the confusion                                                               
could  be related  to the  reference  of butane  hash oil,  which                                                               
refers  to the  oil product  and one  of many  processes used  to                                                               
extract it.   He pointed  out that  butane misused is  a volatile                                                               
and explosive  gas, as in  aviation fuel,  or propane as  all are                                                               
potentially dangerous.   The hash oil  itself, properly extracted                                                               
and purged of residual butane is not at all volatile.                                                                           
1:43:46 PM                                                                                                                    
REPRESENTATIVE  GRUENBERG  referred to  a  "cheat  sheet" in  the                                                               
committee  member's  packet and  asked  why  a person  would  add                                                               
butane to hash oil.                                                                                                             
MR. SCHULTZ  responded that a  person would not  deliberately add                                                               
butane to hash oil, but residual  amounts of butane can end up in                                                               
the hash oil.   He said there  is a process of  purging butane by                                                               
warming it  slightly or putting it  in a vacuum chamber  to allow                                                               
it to  off gas  and rid it  of residual butane.   He  pointed out                                                               
that  in  a commercial  environment  many  operators do  not  use                                                               
butane at all  and instead use high pressure  CO2 in a close loop                                                               
extraction system.                                                                                                              
REPRESENTATIVE GRUENBERG asked for  clarification that the use of                                                               
butane does not make it particularly more explosive.                                                                            
MR.  SCHULTE replied  that the  use of  butane in  the extraction                                                               
process does  not necessarily make  the oil volatile  because the                                                               
residual amounts of butane are  measurable but almost negligible.                                                               
It is the process of extract  that has proven to be hazardous and                                                               
should be discouraged, he explained.                                                                                            
1:45:33 PM                                                                                                                    
MR. SCHULTE  responded to  Chair LeDoux that  butane is  used for                                                               
lighters and there are probably  other uses for compressed butane                                                               
that he is not aware of.                                                                                                        
CHAIR LEDOUX  said in these  other uses of butane  whether butane                                                               
is dangerous in other processes.                                                                                                
MR. SCHULTE  answered that  the use of  butane with  marijuana is                                                               
potentially  hazardous  because it  is  done  inside with  normal                                                               
lighting,  light switches,  and  cell phones,  of  which all  are                                                               
ignition  sources and  potentially very  dangerous.   He contends                                                               
the best  way to diminish that  practice is to ensure  there is a                                                               
retail industry where  a person could simply go to  the store and                                                               
buy [hash  oil] that is  extracted by trained professionals  in a                                                               
suitable environment using  safe equipment at a  much lower price                                                               
and a better product.  Ultimately,  he opined, that is the way to                                                               
really get at  the problem of inadvertent fires  from butane hash                                                               
oil extraction.                                                                                                                 
1:47:13 PM                                                                                                                    
REPRESENTATIVE GRUENBERG  questioned if it would  also be getting                                                               
into the area of negligent burning.                                                                                             
MS. SCHROEDER replied that if a  person was to do something in an                                                               
unsafe  manner  that caused  property  damage  or harm  to  other                                                               
people  they  would be  subject  to  a  whole slew  of  potential                                                               
criminal  charges.   She said  it would  be hard  to narrow  down                                                               
exactly which  ones they  would be  charged with  as it  would be                                                               
very fact specific.                                                                                                             
1:48:20 PM                                                                                                                    
CHAIR LEDOUX noted  that the possibility of a  $300 fine probably                                                               
isn't going  to be the thing  which tells the person  "I can't do                                                               
it, we've  got a  $300 fine  to worry about,"  when there  is the                                                               
possibility of  blowing up a  person's house, blowing  the person                                                               
up, and  blowing children up.   Obviously, she further  noted, it                                                               
would be  a good  idea to discourage  people from  attempting the                                                               
butane method through education  and another [extraction] method.                                                               
She was  not sure that a  fine would be the  dispositive thing in                                                               
someone's consideration.                                                                                                        
CHAIR LEDOUX asked the difference between hash and flowers.                                                                     
MR. SHULTE responded  that he had passed around a  small jar with                                                               
hash in it.                                                                                                                     
CHAIR  LEDOUX asked  if his  sample of  hash oil  was the  normal                                                               
smell of hash as it smelled cinnamon-y and smelled good.                                                                        
MR. SCHULTE noted that hash oil  has a very distinctive smell and                                                               
he placed  a sample of dried  flowers and hash oil  before him in                                                               
parallel.   He explained  that the  two concentrated  forms, hash                                                               
and hash  oil, are  derived from the  flowers by  using different                                                               
processes  and  in  each case  sometimes  several  processes  are                                                               
available.   The  flower itself  is organic  and there  are small                                                               
resin  glands on  the  surface  of a  mature  female plant  which                                                               
contains THC  baring resins.   The goal of both  concentrates, he                                                               
remarked, is  to extract the THC  baring resins from the  rest of                                                               
the  organic material  and  used the  analogy  of separating  the                                                               
wheat from the chaff.                                                                                                           
1:51:17 PM                                                                                                                    
CHAIR LEDOUX  questioned whether a  person purchases a male  or a                                                               
female plant.                                                                                                                   
MR. SCHULTE  responded that  the female plant  is the  plant that                                                               
produces the  desirable resin  glands, and  male plants  are used                                                               
for  no purpose  other than  pollenating the  female plants.   In                                                               
fact,  he explained,  most commercial  settings do  not want  the                                                               
female  plant pollenated  because when  it is  not pollenated  it                                                               
will produce more  resins.  When the female  plant produces resin                                                               
it is  a reproductive response  in that  the female is  trying to                                                               
effect pollen from the males and  if there are no males around it                                                               
goes "nuts" in  producing resin until it is  finally chopped down                                                               
and harvested.  He described  that the males are typically ripped                                                               
up  and thrown  away  and that  it is  possible  to produce  only                                                               
female  plants.   In a  commercial setting  if a  person has  100                                                               
plants  and has  ensured  that  they are  all  female,  a way  of                                                               
promulgating  them is  to take  cutting from  those plants,  root                                                               
them, and  generate more plants.   The cuttings largely  have the                                                               
same genetic  characteristics as  the original  plant, therefore,                                                               
they are all  females.  He remarked the only  time a person would                                                               
want a  male plant is  if they are  in the process  of developing                                                               
strains wherein they want to generate  seeds and spawn a new crop                                                               
by genetically combining  two different strains.   A good example                                                               
is the  medicinal strain called "Charlotte's  Web" which contains                                                               
CBD  (Cannabidiol) that  has proven  to  be beneficial  regarding                                                               
epilepsy.  He  noted that some marijuana strains are  high in THC                                                               
and some  are high in  CBD.  He explained  that THC is  a psycho-                                                               
active component  and CBD  is the more  medicinal component.   He                                                               
pointed out  that the  initiative allows  for businesses  such as                                                               
that and he could envision  hard core horticulturists finding the                                                               
market in Alaska to develop new  strains.  The female plant holds                                                               
very  tiny crystals  which, he  described, are  the resin  glands                                                               
which by now  have been dried and cured slightly.   He noted that                                                               
when  the flowers  are put  into a  bucket of  ice it  causes the                                                               
resin glands  to be  brittle which  tend to  be heavier  than the                                                               
rest of the organic material.   The resin glands then drop to the                                                               
bottom where  they are filtered off  and dried.  He  offered that                                                               
his sample is called ice water hash.                                                                                            
1:55:10 PM                                                                                                                    
CHAIR LEDOUX questioned  whether that it is a  much safer process                                                               
than butane.                                                                                                                    
MR. SCHULTE agreed but, he said,  butane would be used to extract                                                               
hash oil  which is why  he put the  flowers and hash  parallel as                                                               
they are similar chemically, but not  the same product at all.  A                                                               
person might use ice water or  dry ice to isolate the crystals to                                                               
produce  hash  or use  another  solvent  like  butane  or CO2  to                                                               
basically wash the  crystals from the leaf and  produce hash oil.                                                               
With  regard  to  Representative Claman's  earlier  question,  he                                                               
replied that  one would use  quantities of the sample  to produce                                                               
edible products,  although a person  can use  hash as well.   The                                                               
sample could  be mixed in  with butter to produce  baked products                                                               
because it  is free of organic  material and is not  all the leaf                                                               
and cellular structure associated with the sample.                                                                              
1:56:10 PM                                                                                                                    
MR.  SCHULTE  responded  to  Chair  LeDoux  that  the  sample  is                                                               
actually  fat  soluble  so  if  it is  put  in  butter,  it  will                                                               
CHAIR LEDOUX pointed to the  initiative which refers to one ounce                                                               
and questioned whether  the "green stuff" was  measured in volume                                                               
ounce  or  a  weight  ounce,  and asked  whether  the  liquid  is                                                               
measured by weight or a liquid measurement.                                                                                     
MR. SCHULTE stated "I'm not  sure," typically an ounce of flowers                                                               
and a  couple grams of  hash would be by  weight, but he  was not                                                               
1:57:33 PM                                                                                                                    
MS. SCHROEDER responded to Chair  LeDoux that the initiative does                                                               
not distinguish between  liquids and solids and  how marijuana is                                                               
supposed  to  be  weighed.     Under  the  state's  current  drug                                                               
offenses, most  of the things  that are liquid are  classified so                                                               
high that  they are not  measured by  any amount.   For instance,                                                               
she said,  it is against  the law to  have any amount  of certain                                                               
things  and  liquids generally  fall  into  that category.    Law                                                               
enforcement is  not doing a lot  of weighing of liquids  which is                                                               
why there  is a question  as to how  hash oil should  be weighed.                                                               
She offered  that the  most common way  things are  weighed right                                                               
now is by mass.                                                                                                                 
REPRESENTATIVE GRUENBERG  said he thought an  ounce, pound, grams                                                               
and   kilograms  are   measurements  by   weight,  whereas   when                                                               
discussing volumes  it could  be a  teaspoon or  tablespoon, cup,                                                               
gallon and  so forth.   He questioned  whether the law  uses that                                                               
type of measurement of "an ounce" to measure liquids.                                                                           
MS  SCHROEDER reiterated  that most  liquids fall  into the  "any                                                               
amount" provision so it does not have to be weighed.                                                                            
REPRESENTATIVE GRUENBERG remarked that the  use of the term ounce                                                               
would normally be a measurement of weight.                                                                                      
MR.  SHULTE hesitated  to offer  a definitive  answer due  to the                                                               
difference between a  measured ounce and a fluid ounce.   He said                                                               
he will  research the issue  and come  up with a  more definitive                                                               
2:00:03 PM                                                                                                                    
CHAIR  LEDOUX  agreed with  Representative  Lynn  in that  within                                                               
pending marijuana legislation a  committee should put definitions                                                               
into the language.                                                                                                              
REPRESENTATIVE  GRUENBERG  said  things  like fuel  are  taxed  a                                                               
certain amount per gallon.                                                                                                      
2:01:21 PM                                                                                                                    
REPRESENTATIVE  CLAMAN opined  that within  the Federal  Criminal                                                               
Code and possibly the Alaska Criminal  Code that it is weighed by                                                               
mass and  not by volume as  the mass is easier  to be consistent.                                                               
He stated that after researching the  issue, if it turns out that                                                               
weight is not  determined by mass as opposed to  volume it should                                                               
be fixed.                                                                                                                       
CHAIR LEDOUX  asked how  much an  ounce of hash  oil in  a liquid                                                               
measuring cup would weigh.                                                                                                      
2:03:02 PM                                                                                                                    
REPRESENTATIVE  HARRIET   DRUMMOND,  Alaska   State  Legislature,                                                               
related that  one liquid cup has  eight ounces of liquid,  and an                                                               
ounce  of water  does not  weigh  an ounce  when put  on a  scale                                                               
because  a liquid  ounce is  different from  a mass  ounce.   She                                                               
opined that  marijuana and  its derivatives  are measured  by THC                                                               
and CBD content.                                                                                                                
MR. SCHULTE  offered that  in commerce the  percentage of  THC is                                                               
rarely  discussed, although  in  Colorado they  do label  various                                                               
products for the percentage of THC.   He said that a person would                                                               
not  conduct  a transaction  other  than  secondarily as  certain                                                               
products may  be higher  in one than  the other and  it may  be a                                                               
different price.                                                                                                                
CHAIR LEDOUX  stated that  beer has  a different  alcohol content                                                               
than  does vodka  or whiskey,  but still  the transaction  is not                                                               
offered in alcohol content.                                                                                                     
REPRESENTATIVE  DRUMMOND  related  that some  states  have  "near                                                               
beer" with a very low alcohol  content, and noted there is plenty                                                               
of beer  with a  higher alcohol content  that begins  to approach                                                               
hard liquor.                                                                                                                    
2:05:36 PM                                                                                                                    
REPRESENTATIVE GRUENBERG  pointed to AS 45.75.190  and advised it                                                               
is a  chapter in the  Weights and Measures Act  that specifically                                                               
discusses methods of  sale of commodities and how  that should be                                                               
CHAIR LEDOUX  reiterated that Representative  Lynn is  correct in                                                               
that this area requires clarification  and it is this committee's                                                               
job to determine how to sensibly clarify it.                                                                                    
REPRESENTATIVE  CLAMAN  said  that  one  gram  of  water  is  one                                                               
milliliter of water  in the metric system so one  liter of water,                                                               
which is  1,000 milliliters  of water weighs  one kilogram  and a                                                               
liter is almost  the same as a quart.   Therefore, if you weighed                                                               
a water  bottle and deducted  the weight  of the bottle  it would                                                               
weigh approximately  2.2 pounds  and roughly  250 grams  of water                                                               
equals one cup.                                                                                                                 
2:07:48 PM                                                                                                                    
MR. SHULTE offered  that airplane fuel is measured  by pounds and                                                               
not  by the  weight because  the volume  varies with  atmospheric                                                               
conditions.  For purposes of  this discussion, there are only two                                                               
scenarios  where this  will come  into play,  personal possession                                                               
and commercial production.  When  it comes to personal possession                                                               
the question  may arise whether the  person has an ounce  of hash                                                               
oil or 1.5  ounces of hash oil.  The  other circumstance would be                                                               
at a  commercial setting  where there may  be several  gallons of                                                               
hash oil  because they are  producing large quantities  of edible                                                               
products.   He noted  it is not  a criminal issue  and more  of a                                                               
matter of  commerce.   He agreed  it as an  issue that  should be                                                               
nailed down but  in practice it actually  impacts this discussion                                                               
only in a very narrow circumstance.                                                                                             
CHAIR LEDOUX voiced  her concern for the  law enforcement officer                                                               
who  is thinking  of  arresting  a person  based  upon a  certain                                                               
amount  of hash  oil as  it would  be a  good idea  to make  sure                                                               
everyone knows the rules before engaging in the practice.                                                                       
2:10:19 PM                                                                                                                    
REPRESENTATIVE DRUMMOND  referred to the "cheat  sheet" and asked                                                               
the definition of "keef" and how is it different from hash.                                                                     
MR. SHULTE  responded that keef is  a slang term which  refers to                                                               
the  accumulated  resin  glands  known in  botanical  circles  as                                                               
tricombs  which are  not unique  to  the cannabis  plant as  many                                                               
plants  produce  them.    The   tiny  resinous  tricombs  can  be                                                               
extracted  through  various  means,  ice  water  and/or  dry  ice                                                               
processes.   He  advised if  he was  to take  a mature  marijuana                                                               
plant with  crystals and glands  on it  and hang it  upside down,                                                               
and shake it, the tricombs that  fall out onto the table is keef.                                                               
If a person  gathers them up into a little  pile and compress it,                                                               
it becomes hash.                                                                                                                
REPRESENTATIVE DRUMMOND asked whether  [the tricombs] falling off                                                               
the mature but fresh plant  would have a different characteristic                                                               
than after it  has been dried, or is drying  part of the process,                                                               
she questioned.                                                                                                                 
MR. SHULTE related  that keef and hash really do  not change that                                                               
much even though they do cure.   He explained there is a chemical                                                               
breakdown  of various  products  within and  that  the taste  and                                                               
smell changes  over time.   He  referred to  the dried  sample in                                                               
front of him  and said that due  to the way it  was extracted, it                                                               
was very wet and  damp and had to dry for a time  and if a person                                                               
uses dry ice as an alternative it dries in a matter of hours.                                                                   
2:12:21 PM                                                                                                                    
REPRESENTATIVE DRUMMOND  clarified that  hash doesn't  really dry                                                               
out because it is oil soluble so it is oily.                                                                                    
MR.  SHULTE  responded  that  it largely  does  dry  but  remains                                                               
pliable and  not very sticky,  yet when on  the plant it  is very                                                               
sticky but  does dry out  a bit.  He  described it as  dense clay                                                               
but a  little drier, like clay  and sand together.   He showed an                                                               
example of  a tincture and  advised it is fairly  popular amongst                                                               
medicinal users.   A  medicinal user  can take  very concentrated                                                               
hash oil and dilute it with  an alcohol and the tincture can then                                                               
be sprayed or dropped into a beverage, he explained.                                                                            
MR.  SHULTE responded  to  Chair  LeDoux that  it  could be  used                                                               
recreationally as well.                                                                                                         
2:13:38 PM                                                                                                                    
MR.  SHULTE  responded  to  Chair  LeDoux  that  the  alcohol  he                                                               
referred to  was like  rubbing alcohol,  and very  small amounts.                                                               
Definitely  not rum  or  whiskey  and, he  expressed,  he is  not                                                               
suggesting  for  a  moment to  combine  marijuana  products  with                                                               
anything bought  at a  package liquor  store as it  is more  of a                                                               
laboratory process.                                                                                                             
CHAIR LEDOUX described  the tincture as a spray as  in putting on                                                               
MR. SHULTE said that it is an atomizer.                                                                                         
2:14:42 PM                                                                                                                    
REPRESENTATIVE CLAMAN  referred to keef  and asked whether  it is                                                               
also called shake and bud.                                                                                                      
MR. SHULTE said  "not exactly," and referred to  samples in front                                                               
of him of which  was the core of a flower of  a mature plant with                                                               
dense leaf  structure and all  of the reproduction  components of                                                               
the  plant.   He described  that shake  is all  of the  leaf that                                                               
falls off of  the plant and is  much lower in potency.   In order                                                               
of  potency per  unit weight  there is  shake, bud,  and hash  in                                                               
ascending order  of potency.   Although, he  said, if  the sample                                                               
was crushed  and shaken eventually  there would be a  small layer                                                               
of what appeared to be sand which would be keef.                                                                                
2:15:51 PM                                                                                                                    
MR. SCHULTE  said he referred  earlier to the different  forms of                                                               
consumption  and the  various samples  were bud,  leaf, hash  and                                                               
hash oil, [and  tincture].  He explained that  the consumption of                                                               
hash oil  includes using  it in  edibles or smoking  the oil.   A                                                               
person could  put a  few drops on  a joint or  on a  cigarette to                                                               
give it a burnable medium.                                                                                                      
MR. SCHULTE responded to Chair LeDoux  that hash oil could be put                                                               
on  a  marijuana cigarette  or  a  tobacco  cigarette.   He  then                                                               
referred  to tobacco  E-cigarettes as  being the  same technology                                                               
for marijuana  consumers.   He demonstrated  a battery  pack from                                                               
one such  device and said  it is notable in  two ways in  that it                                                               
has  become a  more common  method of  consumption, and  has very                                                               
little residual smoke and uses a  diluted form of hash oil as the                                                               
combustible material.   He remarked that he brought it  up due to                                                               
public  consumption being  allowed in  specific designated  areas                                                               
and  businesses.   He said  it is  valuable to  consider that  E-                                                               
cigarettes are a  growing method of consumption  in the marijuana                                                               
2:18:05 PM                                                                                                                    
CHAIR  LEDOUX  opined  that with  regard  to  smoking  marijuana,                                                               
unless  a person  takes a  drag, inhales  it, and  pulls it  into                                                               
their  lungs that  it doesn't  really accomplish  its goal.   She                                                               
questioned how the E-cigarette vaporizer does any good.                                                                         
MR. SCHULTE answered  that the terminology is  misleading in that                                                               
it is a vaporizer in the  sense that it takes the material, heats                                                               
it  rapidly to  several  hundred degrees  and  vaporizes the  oil                                                               
which the person does inhale.                                                                                                   
CHAIR LEDOUX quiered that the  person would still have to breathe                                                               
deeply and have it in their lungs.                                                                                              
MR. SCHULTE  responded "Yes,"  in that  scenario, whereas  with a                                                               
tincture a person could spray it on their tongue.                                                                               
2:19:24 PM                                                                                                                    
REPRESENTATIVE CLAMAN  referred to  the battery pack  and advised                                                               
is  called "vaping,"  and  that  a criticisms  of  vaping is  the                                                               
chemicals used in  the fluid.  He noted that  little is known and                                                               
vaping is unregulated,  so there is an issue of  what a person is                                                               
actually inhaling.                                                                                                              
MR. SCHULTE answered  that his question relates to  more than the                                                               
marijuana  industry as  E-cigarettes have  lead the  way in  that                                                               
regard.    Mr. Schulte  agreed  that  there are  questions  about                                                               
secondary products, the catalyst, or  the vehicle used to deliver                                                               
the oil.  He offered that he is  not an expert in the devices but                                                               
could research the issue.                                                                                                       
REPRESENTATIVE  CLAMAN noted  if  there was  a marijuana  control                                                               
board that vaping may be an appropriate subject for regulation.                                                                 
MR. SCHULTE agreed that it should be addressed in regulation.                                                                   
2:21:28 PM                                                                                                                    
REPRESENTATIVE  LYNN   referred  to   Mr.  Schulte's   wealth  of                                                               
knowledge  and  asked  whether  he  took a  class  to  become  so                                                               
MR. SCHULTE related  that he is not a large  consumer in that his                                                               
work makes it  impractical because he is drug  tested, and stated                                                               
that he has friends and he has performed research.                                                                              
2:22:31 PM                                                                                                                    
REPRESENTATIVE  GRUENBERG  noted  that Alaskans  are  willing  to                                                               
discuss things that in earlier years were controversial.                                                                        
2:23:29 PM                                                                                                                    
REPRESENTATIVE  CLAMAN referred  to "black  market" marijuana  as                                                               
opposed  to legal  market marijuana  and  questioned whether  Mr.                                                               
Schulte had  any suggestions or  recommendations that  would make                                                               
the  transition  from  a  black  market to  a  legal  market  for                                                               
MS. SCHULTE said his group shares  the goal of taking an existing                                                               
$100 million  industry in  Alaska and moving  it to  a legitimate                                                               
business  model.   In  order  to  encourage that  process  Alaska                                                               
should have  a regulatory structure that  appropriately addresses                                                               
public safety  and health, but  is not  so onerous that  it keeps                                                               
people out of the industry.   The goal is to encourage the casual                                                               
participant  grower  or  seller  to obtain  a  permit,  file  tax                                                               
returns and  pay excise tax.   Keeping things  reasonable simple,                                                               
he noted, is a huge part of it,  plus keeping the cost down.  The                                                               
initiative identifies  a $50  excise tax  and, he  remarked, this                                                               
industry should not  be subsidized by the state.   He opined that                                                               
it can  be self-supporting  and hopes  that the  application fees                                                               
and permit fees, and so forth,  are kept to a reasonable minimum.                                                               
In   that  regard,   the  legitimate   industry  would   want  to                                                               
participate  and  it  can  compete  effectively  with  the  black                                                               
market.  He described it as a  fine balance and noted that it may                                                               
have to  be evaluated through  trial and  error.  He  referred to                                                               
the IRS rules  and banking rules, and so forth,  and advised that                                                               
all  of those  things  taken together  could  make this  business                                                               
viable ...  a business  plan around  this industry  will diminish                                                               
the black market.   He reiterated that it may  take several years                                                               
but if  the state  makes it  attractive to  legitimate businesses                                                               
the state will see a huge reduction of the black market.                                                                        
2:26:13 PM                                                                                                                    
CHAIR LEDOUX  asked whether  Mr. Schulte had  any idea  where the                                                               
banking  industry is  right  now [on  the  marijuana issue],  and                                                               
whether there  has there been any  movement on that level.   [Her                                                               
concern]  is that  the state  will  continue to  see an  industry                                                               
dealing solely in cash because it can't put its money in a bank.                                                                
MR.  SCHULTE  responded  that  federally   it  is  a  problem  as                                                               
federally insured  banks have problems handling  anything related                                                               
to marijuana.  He remarked that  his group is hopeful the federal                                                               
government  will reschedule  marijuana as  that would  positively                                                               
affect many federal laws around  banking rules, IRS rules, and so                                                               
CHAIR LEDOUX  noted there  is nothing  the state  legislature can                                                               
MR.  SCHULTE  agreed  and  offered  that  Colorado  has  a  state                                                               
sponsored bank  model that  is either  being implemented  or very                                                               
close to implementing.                                                                                                          
CHAIR  LEDOUX  opined  that  Alaska  has  the  Alaska  Commercial                                                               
Fisheries  and Agriculture  Bank (CFAB),  and marijuana  could be                                                               
viewed as agriculture.                                                                                                          
2:28:06 PM                                                                                                                    
REPRESENTATIVE  GRUENBERG stated  North Dakota  is the  first and                                                               
only state  to have  an official  state bank  owned by  the state                                                               
government.   He  opined that  Hawaii is  looking into  doing the                                                               
same thing, and  that Representative Kawasaki is  looking into it                                                               
in Alaska.  He remarked  that this committee or another committee                                                               
should have a hearing to see what can be done.                                                                                  
CHAIR LEDOUX said she found  the initiative process and committee                                                               
process interesting  in that the legislature's  feelings have run                                                               
the gamut.  Even so, she noted,  there has been no effort made to                                                               
torpedo  the process.    She opined  that  everyone believes  the                                                               
legislature must acknowledge the will of the people, and the                                                                    
people have spoken, and she related she is thankful for her                                                                     
[HB 79 was held over.]                                                                                                          
2:30:26 PM                                                                                                                    

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