Mallott signs marijuana regulations, but Department of Law warns of security gap

Lieutenant Gov. Byron Mallott signed Alaska’s first commercial marijuana regulations on Friday, but regulators and legislators now face a headache from the FBI.

In a memo dated Jan. 20, Senior Assistant Attorney General Steven Weaver wrote the executive director of the Alaska Marijuana Control Board to say that in order for the FBI to perform background checks on prospective marijuana entrepreneurs, the Alaska Legislature needs to pass a law requesting such checks.

According to the FBI’s interpretation of federal law, “specific authority (must) be expressed in a state statute to require fingerprinting and the use of Federal Bureau of Investigation records,” Weaver wrote.

While the marijuana control board requested such checks, it did so in regulation. Statutes come from the Legislature or a voter-approved ballot initiative.

Last year, Alaska lawmakers approved House Bill 123, which established the marijuana board and said a marijuana business cannot not be owned by a person who has had a felony in the previous five years.

Without a federal background check, there will be no easy way to determine if an entrepreneur has had a felony in another state.

Cynthia Franklin, executive director of the marijuana board, told the Senate Labor and Commerce Committee on Thursday that application forms could require applicants to state whether they have had a felony in the past five years, and applicants could be required to swear to that effect, but right now, there’s no way to verify the information.

“We missed a spot,” she told committee.

“It’s definitely a roadblock, but I don’t see it as one of the bigger sinkholes,” said marijuana board chairman Bruce Schulte by phone.

While the state is required to begin accepting marijuana business license applications Feb. 24, the first licenses are not expected to be issued until June. That gives the state time to fix the problem.

The fix would be a simple piece of legislation, Schulte speculated, saying that lawmakers might include it within House Bill 75, a “cleanup bill” intended to address outstanding issues related to the legalization of recreational marijuana by voters in fall 2014.

Franklin said the state is working on standalone legislation as well, but she isn’t sure whether it has a sponsor in the Legislature.

“We’re hoping by the end of session to have a fix,” she told the committee.

 

Testing alternative thrown out

In a separate move, the Department of Law threw out an attempt by the marijuana board to provide a testing alternative for marijuana businesses off the Alaska road system.

All marijuana sold in Alaska must be tested for contaminants before it crosses the counter, but testing equipment is expensive — estimates provided to the marijuana board were in the range of $500,000 — and federal law prohibits the transportation of marijuana by air and water.

Entrepreneurs seeking to open businesses in rural and Southeast Alaska asked the board for an alternative, and in a 3-2 vote, the board said a license applicant could “propose alternative means of testing” if “geographic location and transportation limitations make it unfeasible … to transport testing samples to a lab.”

In his memo throwing out the language, Weaver wrote that it “lacks standards that the … board could apply in a balanced, unbiased and consistent manner.”

Without an exemption for the testing requirement or some provision for mobile testing equipment, it is not clear how businesses off the Alaska road system will be able to operate legally.

With Mallott’s signature, the marijuana regulations take effect in 30 days. The marijuana board will meet Feb. 11 in Juneau to finalize regulations for marijuana cafes and the forms that licensees will use to apply starting Feb. 24.

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