About 2 1/2 oz. of dried marijuana. (Michael Penn | Juneau Empire File)

About 2 1/2 oz. of dried marijuana. (Michael Penn | Juneau Empire File)

Wells Fargo forces closure of Alaska marijuana lab

Correction: Wells Fargo spokesman David Kennedy was misidentified in an earlier version of this article. He is David Kennedy, not Brian Kennedy. This article has been updated to reflect the change.

One of Alaska’s three marijuana testing labs has been shut down by Wells Fargo bank, leaving the state’s growers with only two options for state-mandated testing.

In a social media post Thursday morning, testing lab Steep Hill of Anchorage declared, “We are sorry to announce that Steep Hill Alaska will be suspending cannabis testing operations on March 31, 2018. We have to relocate because Wells Fargo called in the loan on our building. They will foreclose if we do not move out — just because we are a cannabis business!”

David Kennedy, a spokesman for Wells Fargo in Alaska, said by email, “It is currently Wells Fargo’s policy not to knowingly bank marijuana businesses, based on federal laws under which the sale and use of marijuana is still illegal.”

Alaska regulations require marijuana sold in the state to be tested for potency and contaminants. With Steep Hill’s closure, Anchorage-based CannTest and Wasilla-based New Frontier Research remain available for that required testing.

Brandon Emmett is a member of Alaska’s Marijuana Control Board from Fairbanks and chairs the subcommittee devoted to testing issues. By phone, he said the wider effects of Steep Hill’s closure will be limited because CannTest alone has the capacity to handle both business’ work.

“The businesses that use Steep Hill are going to be inconvenienced … obviously Steep Hill is going to be extremely inconvenienced, but as far as the industry as a whole is concerned, I don’t think it will be a major issue,” Emmett said.

A CannTest representative confirmed that its lab has enough capacity to handle state demand. New Frontier Research said by email that it has not held its grand opening — its license was finalized March 14 — but it has received numerous calls this week and is accepting samples for testing.

Steep Hill CEO Brian Coyle said his lab’s closure is the end result of months of conflict. That conflict was caused by federal banking regulations that prevent banks from dealing with marijuana businesses.

“To me, Wells Fargo is the real bad guy here. They could give a s—- about Alaska. Only 700,000 people in Alaska; that’s less than the city of San Francisco,” he said by phone on Friday morning.

“We need to hold their feet to the fire. If they’re going to be doing business in Alaska, they should be following Alaska’s state laws.”

Steep Hill rents office space in Anchorage and was informed by its landlord late last year that Wells Fargo — which holds a loan on the building — was preparing to call the loan because it had learned that Steep Hill was a marijuana business.

The landlord, rescue and survival trainer Brian Horner, attempted to find a different bank or credit union to assume the loan, but he could not. Horner did not return phone calls from the Empire on Friday; this account of events was provided by Coyle.

He turned to third parties and reached an agreement with a non-bank investor, but the title company refused to switch the title to the building, again because it housed a marijuana business.

That left Horner with no choice but to evict Steep Hill.

On the same day Steep Hill shared news of its impending eviction, Sen. Lisa Murkowski, R-Alaska, joined other U.S. Senators in urging U.S. Sen. Mike Crapo, R-Idaho and chairman of the Senate banking committee, to hold a hearing on a bill that would allow banks to handle marijuana business.

 

 

U.S. Sen. Dan Sullivan, R-Alaska, is a cosponsor of that bill, and in the U.S. House, Rep. Don Young, R-Alaska, is a member of the “cannabis caucus” that has encouraged banking reforms.

The issues involving Steep Hill are the latest to afflict marijuana testing in Alaska. Late last year, the Alaska Marijuana Control Board warned consumers that existing testing procedures were delivering wildly different results. In the wake of that revelation, the board created the testing subcommittee, which was charged with reducing the testing variations. That work is ongoing.

 


 

• Contact reporter James Brooks at jbrooks@juneauempire.com or 523-2258.

 


 

More in News

(Juneau E
Aurora forecast for the week of Nov. 27

These forecasts are courtesy of the University of Alaska Fairbanks’ Geophysical Institute… Continue reading

“The Phantom of the Opera” is screened with a live musical soundtrack at the Gold Town Theater in April. Three of the musicians are scheduled to perform Sunday during two screenings of the 1928 silent film “The Wind.” (Courtesy of Gold Town Theater)
This weekend’s lineup at the Gold Town Theater really blows

Xmas Bazaar Xtravaganza nearly sold out already, but seeing “The Wind” to live music a breeze.

Scant patches of snow remain at the base of Eaglecrest Ski area on Wednesday despite snowmaking efforts that occurred during the weekend, due to warmer temperatures and rain this week. The opening date for the ski area, originally set for Dec. 2 and then delayed until Dec. 9, is now undetermined. (Photo courtesy of Eaglecrest Ski Area)
Eaglecrest opening delayed again, target date now TBD

Warm temperatures and rain thwart efforts to open ski area on Saturday.

Work crews continue removing hundreds of truckloads of debris from Zimovia Highway since the Nov. 20 landslide in Wrangell. (Photo courtesy of the Alaska Department of Transportation and Public Facilities)
Clearing work continues at Wrangell slide; fundraising grows to help families

Juneau, with several thousand pounds of food collected in drive, among many communities assisting.

The front page of the Juneau Empire on Dec. 4, 2005. (Mark Sabbatini / Juneau Empire)
Empire Archives: Juneau’s history for the week of Dec. 10

Three decades of capital city coverage.

Staff of the Ketchikan Misty Fjords Ranger District carry a 15-foot-long lodgepole pine near the Silvis Lake area to a vessel for transport to Juneau on Nov. 30. (Photo courtesy of the U.S. Forest Service)
Together Tree departs Ketchikan for Governor’s Residence in Juneau

Annual Holiday Open House featuring 21,350 cookies scheduled 3-6 p.m. Dec. 12.

Female caribou runs near Teshekpuk Lake on June 12, 2022. (Photo by Ashley Sabatino, Bureau of Land Management)
Alaska tribes urge protection for federal lands

80% of food comes from surrounding lands and waters for Alaska Native communities off road system.

Ron Ekis (wearing red) and Dakota Brown order from Devils Hideaway at the new Vintage Food Truck Park as Marty McKeown, owner of the property, shows seating facilities still under construction to other local media members on Wednesday. (Mark Sabbatini / Juneau Empire)
New Vintage Food Truck Park makes year-round debut

Two of planned five food trucks now open, with covered seating and other offerings in the works.

(Michael Penn / Juneau Empire file photo)
Police calls for Tuesday, Dec. 5, 2023

This report contains public information from law enforcement and public safety agencies.

Most Read