Legislature(2015 - 2016)BUTROVICH 205

03/10/2015 08:30 AM Senate STATE AFFAIRS

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved SCR 6 Out of Committee
-- Public Testimony --
Heard & Held
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
        SB 62-REGULATION OF MARIJUANA BUSINESSES; BOARD                                                                     
9:18:26 AM                                                                                                                    
CHAIR STOLTZE  called the committee  back to order.  He announced                                                               
that the next order of business would be SB 62.                                                                                 
9:19:17 AM                                                                                                                    
FRANCI   HAVEMEISTER,   Director,    Division   of   Agriculture,                                                               
Department   of  Natural   Resources,  provided   the  division's                                                               
perspective  on SB  62. She  related  that the  division has  had                                                               
discussions  with the  Department of  Law and  believes that  the                                                               
potential  interaction between  the  marijuana  industry and  the                                                               
division may involve the Agriculture  Revolving Loan Fund. It may                                                               
also  include  agriculture  land   sales  in  that  the  division                                                               
requires a farm  conservation plan be submitted  to the division.                                                               
There may also  be interaction between the  plant material center                                                               
staff  with technical  assistance on  cultivation production  and                                                               
the Alaska Grown Marketing Program.                                                                                             
CHAIR STOLTZE  asked if marijuana meets  labeling requirements as                                                               
"Alaska Grown"                                                                                                                  
MS.  HAVEMEISTER  said there  are  ongoing  discussions with  the                                                               
Department of Law regarding that issue.                                                                                         
CHAIR STOLTZE asked what the inhibitors might be.                                                                               
9:21:51 AM                                                                                                                    
MS. HAVEMEISTER answered  that she is not aware  of anything that                                                               
would prohibit  it except  for the  implication of  federal money                                                               
being used  for the marketing  program. She noted  that "Colorado                                                               
Proud" has  a disclaimer  stating that if  the crop  is federally                                                               
illegal, the seller is not able to participate in the program.                                                                  
CHAIR   STOLTZE  asked   if  the   division  has   discussed  the                                                               
segregation  of  state  versus federal  funds  in  the  marketing                                                               
MS. HAVEMEISTER said no.                                                                                                        
CHAIR STOLTZE  noted that the  plant materials center  engages in                                                               
seed certification and disease control.  He asked if marijuana is                                                               
an invasive weed.                                                                                                               
9:22:51 AM                                                                                                                    
MS. HAVEMEISTER said she did not believe so.                                                                                    
CHAIR STOLTZE  added "not in the  purely, technical, agricultural                                                               
MS. HAVEMEISTER answered correct.                                                                                               
CHAIR  STOLTZE   noted  the  success  of   Greenhouse  Loans.  He                                                               
requested  to know  the barriers  and opportunities  for farmers'                                                               
participation in the division's programs.                                                                                       
9:23:43 AM                                                                                                                    
MS.  HAVEMEISTER  answered  that  the  division  is  having  that                                                               
discussion with the Department of  Law. No determination has been                                                               
CHAIR STOLTZE asked if there have been policy discussions.                                                                      
MS.  HAVEMEISTER said  the board  has  had some  discussion on  a                                                               
limited basis.                                                                                                                  
CHAIR STOLTZE asked which board.                                                                                                
MS.  HAVEMEISTER said  the Board  of Agriculture,  which includes                                                               
the Attorney General.                                                                                                           
CHAIR STOLTZE asked who sat in on the meetings.                                                                                 
MS. HAVEMEISTER said Mr. McFarlane.                                                                                             
9:24:56 AM                                                                                                                    
SENATOR COGHILL  noted Colorado's  radio-frequency identification                                                               
(RFID) technology to  track plants and asked if  Alaska uses RFID                                                               
to track agriculture.                                                                                                           
MS. HAVEMEISTER answered not that she is aware of.                                                                              
SENATOR COGHILL  explained that the  potency and value  of plants                                                               
is determined  by a selection  of individual plants in  a growing                                                               
area, such  as a greenhouse.  He asked if  that could be  done in                                                               
MS. HAVEMEISTER answered potentially yes.                                                                                       
9:26:08 AM                                                                                                                    
CHAIR  STOLTZE  noted  other   states  that  have  commercialized                                                               
marijuana   have   heightened   security  and   enacted   bonding                                                               
requirements. He wondered if fiscal notes would be needed.                                                                      
MS.  HAVEMEISTER   said  they  have  discussed   the  funding  of                                                               
commercialization  and are  trying  to  understand the  financial                                                               
impacts to the division.                                                                                                        
9:27:12 AM                                                                                                                    
CHAIR  STOLTZE   noted  the  U.S.  Department   of  Agriculture's                                                               
discussion of  the Food  Safety and  Modernization Act  and asked                                                               
what  challenges the  division  might have  with regulations  for                                                               
growing marijuana as they relate to that Act.                                                                                   
MS. HAVEMEISTER replied  that the Act is going  to be challenging                                                               
for all  agriculture divisions throughout the  nation. Currently,                                                               
the authority  lies within the Department  of Commerce, Community                                                               
and Economic  Development (DCCED). She  noted the division  is in                                                               
conversation   with   DCCED  to   work   out   a  Memorandum   of                                                               
Understanding  (MO)  that  would   put  the  on-farm  inspections                                                               
through the division. She reported  that, at this time, the final                                                               
rules will be published in September  or October of 2015. At that                                                               
time the division will know  the true implications and effects it                                                               
will have on Alaska growers.                                                                                                    
SENATOR HUGGINS asked about the shipping of seeds to Alaska.                                                                    
9:29:48 AM                                                                                                                    
MS. HAVEMEISTER understood that  shipping marijuana seeds must be                                                               
authorized with  the Department of  Agriculture (DOA) and  is not                                                               
easily done.                                                                                                                    
CHAIR STOLTZE pointed out efforts  required to control disease in                                                               
the  agriculture industry.  He assumed  there would  be a  fiscal                                                               
impact  to DNR  and  suggested  that they  prepare  for that.  He                                                               
requested fiscal information.                                                                                                   
MS. HAVEMEISTER agreed to provide that.                                                                                         
9:32:53 AM                                                                                                                    
SENATOR HUGGINS asked how growers pollinate marijuana.                                                                          
MS.  HAVEMEISTER said  she is  not  familiar with  that, but  the                                                               
division is looking into it.                                                                                                    
SENATOR HUGGINS  asked if  marijuana is  a "volunteer"  plant. He                                                               
provided a  scenario and  asked whether the  plant will  lose its                                                               
potency the second year.                                                                                                        
9:34:38 AM                                                                                                                    
MS.  HAVEMEISTER said  she did  not know.  She thought  marijuana                                                               
production would take place in a greenhouse.                                                                                    
SENATOR HUGGINS was concerned about re-growth.                                                                                  
CHAIR STOLTZE thanked Ms. Havemeister.                                                                                          
9:37:09 AM                                                                                                                    
RICHARD  SVOBODNY, Deputy  Attorney  General, Criminal  Division,                                                               
Department of Law,  provided information on SB  62. He considered                                                               
SB 62 a regulatory bill.                                                                                                        
CHAIR STOLTZE  pointed out public  notice issues and  the mandate                                                               
to regulate marijuana like alcohol.                                                                                             
9:40:05 AM                                                                                                                    
MR.  SVOBODNY addressed  regulating  marijuana  like alcohol.  He                                                               
said  it  is  easier  to  regulate  alcohol  due  to  the  larger                                                               
infrastructure  in   place.  The   marijuana  industry   is  just                                                               
beginning and  much is  unknown. For  example, the  bill provides                                                               
for three new types of licenses.                                                                                                
CHAIR   STOLTZE   requested    information   about   the   notice                                                               
requirement, pointing  out the public  safety aspect.  Both sides                                                               
say  that  they must  have  notice  or privacy,  both  reflecting                                                               
criminal concerns.                                                                                                              
9:41:37 AM                                                                                                                    
MR. SVOBONDY  opined that Ravin  vs. State  was not based  on the                                                               
constitutional right  to possess or  use marijuana. It  was based                                                               
upon the  right of privacy  and there  was a heightened  right of                                                               
privacy  in one's  home. It  only  dealt with  personal use,  not                                                               
commercial use.                                                                                                                 
CHAIR STOLTZE said if that  includes boutique production in one's                                                               
MR.  SVOBODNY  answered that  example  is  similar to  running  a                                                               
business out  of your  home, such  as Amway.  There is  a greater                                                               
interest in allowing legislation to  control what happens in your                                                               
home  when it  is commercial,  as  opposed to  personal. He  gave                                                               
several examples.                                                                                                               
9:44:30 AM                                                                                                                    
CHAIR  STOLTZE   asked  whether  there  are   commercial  alcohol                                                               
businesses  that  are  allowed   to  conduct  their  business  in                                                               
anonymity and have a right of privacy.                                                                                          
MR.  SVOBODNY answered  no. A  person can  make beer  or wine  in                                                               
one's home, but  that is not a commercial operation  and does not                                                               
require a license like home-grown marijuana would.                                                                              
9:45:38 AM                                                                                                                    
SENATOR MCGUIRE  opined that the  struggle with the  Ravin ruling                                                               
is that  marijuana was  illegal at the  time. She  predicted that                                                               
legalization  and the  right to  privacy would  intersect in  the                                                               
MR. SVOBODNY agreed.                                                                                                            
SENATOR  MCGUIRE  asked  about  pending  litigation  from  states                                                               
surrounding  Colorado.  They  are asserting  that  the  marijuana                                                               
industry in  Colorado has  had disproportionate  negative impacts                                                               
on them. She  asked if Alaska might be subjected  to that type of                                                               
litigation from Washington or Oregon.                                                                                           
MR.  SVOBODNY said  it was  an interesting  case and  he did  not                                                               
think  it would  happen  to Alaska  because  both Washington  and                                                               
Oregon have marijuana initiatives.                                                                                              
9:49:00 AM                                                                                                                    
SENATOR MCGUIRE  asked if  that case might  ultimately lead  to a                                                               
Supreme Court decision about the federalization of marijuana.                                                                   
MR. SVOBODNY said he had no idea.                                                                                               
SENATOR HUGGINS asked  about tribal rights in  either Colorado or                                                               
MR.  SVOBODNY thought  Senator Huggins  might be  referring to  a                                                               
memorandum from  the Justice  Department in  the last  six months                                                               
that has  set out a framework  for Indian reservations to  make a                                                               
decision  about whether  or not  to decriminalize  marijuana. The                                                               
only area in Alaska that would meet that criteria is Metlakatla.                                                                
9:52:14 AM                                                                                                                    
SENATOR COGHILL commented that seeds  from out of state, would be                                                               
an interstate  commerce criminal issue  on the federal  level. He                                                               
asked how the state would handle it.                                                                                            
MR. SVOBODNY  asked if he was  asking if under the  initiative it                                                               
would  be a  crime  to  possess seeds  in  territorial waters  of                                                               
SENATOR COGHILL  thought Alaska might  have to have a  license to                                                               
accept five pounds of seeds.                                                                                                    
MR.  SVOBODNY   explained  that   from  the  standpoint   of  the                                                               
initiative, Alaska would have to  have a license to import seeds.                                                               
He did  not know  what the  penalties under  state law  would be.                                                               
Currently, it is a violation  of federal law. The initiative does                                                               
not  change federal  law.  The federal  government  could make  a                                                               
determination to go forward in any criminal case.                                                                               
He questioned  where the boundaries  of the  administrative state                                                               
are  under SB  62  and how  much  authority can  be  given to  an                                                               
administrative agency. He did not  think an administrative agency                                                               
should be creating  crimes, but that it is  the legislature's job                                                               
to do  so. He stated  that half of  the states have  required the                                                               
crimes  to be  spelled out  in statute;  others have  said it  is                                                               
sufficient to  give an administrative agency  that authority, but                                                               
the  legislature must  set standards  for their  use in  creating                                                               
administrative regulations. He stressed the importance of that.                                                                 
9:57:36 AM                                                                                                                    
CHAIR  STOLTZE  requested  Mr. Svobodny  work  with  Commissioner                                                               
Folger and  Commissioner Richards  on the  administration's ideas                                                               
on public safety priorities and  public notice and zoning issues.                                                               
He noted the sponsor's mandate on privacy.                                                                                      
9:59:48 AM                                                                                                                    
MR. SVOBODNY agreed  to do so by Monday. He  pointed out that the                                                               
need to be licensed means a  lessened amount of privacy. He noted                                                               
that OSHA  and other regulatory  entities will interact  with the                                                               
new businesses.                                                                                                                 
10:01:06 AM                                                                                                                   
SENATOR  WIELECHOWSKI requested  information from  prosecutors in                                                               
Anchorage  about the  uptick in  violence. He  wondered if  it is                                                               
drug related and a reaction to the proposed legislation.                                                                        
MR. SVOBODNY agreed to find out.                                                                                                
[SB 62 was held in committee.]                                                                                                  

Document Name Date/Time Subjects
SCR6 Sponsor Statement.pdf SSTA 3/10/2015 8:30:00 AM
SCR6 Draft Fiscal Note - SSTA 3-9-15.pdf SSTA 3/10/2015 8:30:00 AM
SCR6 DVSA Dashboard 2014.pdf SSTA 3/10/2015 8:30:00 AM
SCR6 CDVSA Annual Report 2014.pdf SSTA 3/10/2015 8:30:00 AM
SB42 Sponsor Statement.pdf SSTA 3/10/2015 8:30:00 AM
SB 42
SB42 ADF&G Brief on Personal Use Fishing.pdf SSTA 3/10/2015 8:30:00 AM
SB 42
SB42 Regulations of the Board of Fisheries.pdf SSTA 3/10/2015 8:30:00 AM
SB 42
SB42 Fiscal Note - DFG-CO 3-6-15.pdf SSTA 3/10/2015 8:30:00 AM
SB 42