Written by:  Jason Brandeis

In an article published in the most recent edition of The Bar Rag, the Alaska Bar Association’s quarterly journal, Birch Horton attorney Jason Brandeis writes about emerging legal issues and regulatory changes in Alaska’s marijuana industry.

In the piece, Brandeis discusses the expansion of the Alaska marijuana industry, which now includes over 100 licensed marijuana cultivators operating throughout the state and about forty retail stores open to the public.  During the first half of 2017, the industry conducted $17 million in retail sales and generated over $1 million of state tax revenue.

The article also examines how regulators and businesses have responded to the industry’s growth. Regulators, for example, have been busy addressing the practical realities of managing a new industry in a state with unique geographic and supply chain concerns. Over the past few months, the State of Alaska’s Marijuana Control Board (MCB) and Alcohol & Marijuana Control Office (AMCO) have released a slate of new regulations intended to streamline and improve industry operations. Similarly, new marijuana businesses have similarly had to adjust on-the-fly. Having only recently navigated their way through complex local land use codes and a rigorous state licensing process, marijuana start-ups now find themselves having to quickly get up to speed on traditional business law practices such as corporate governance, tax collection, and employment law matters.

Finally, the article discusses how inconsistencies between state and federal law still pose problems for marijuana businesses in Alaska. The continued federal prohibition means that industry participants often do not have access to traditional banking services, requiring them to operate mostly in cash. Some of the challenges facing cash-only businesses were anticipated (such as security concerns and the inability to accept credit card payments), but others were not (such as the U.S. Postal Service’s refusal to mail a cultivator’s cash tax payments to the processing center in Anchorage).

The full article, “Federal rules complicate growing Alaska marijuana business,” explores these topics and other aspects of the Alaska marijuana industry in more detail.  You can read the article here.