2312, 2019

BHBC Sponsors Mears Middle School 8th Graders’ Tour of Boney and Nesbett Courthouses

December 23rd, 2019|

Written by Aaron Sperbeck


Continuing Birch Horton’s longstanding effort to promote youth involvement and exposure to the legal profession, BHBC attorneys Aaron Sperbeck and Sarah Badten recently hosted a collaborative field trip of 8th grade students from Mears Middle School to visit the Boney and Nesbett Courthouses. The students toured the District and Superior courthouses, interacted with judges and justices from each level of jurisdiction, and witnessed firsthand the process of making sure everyone in the building is safe and secure with the judicial services officers. This experience came only a short time after these students had completed a study module focused on civil rights and legal procedures culminating in the students conducting a mock trial.




During the trip, students heard from several sitting judges and two justices on the Alaska Supreme Court about the importance of respect, decorum, deference, and the value of listening carefully to every litigant who appears before them. The Mears students embraced these lessons and demonstrated excellent behavior and appreciation for the legal institution. Students displayed confidence and honed their public speaking skills by asking questions of the judges from the counsel tables, the podium, and even the jury box.


1812, 2019

SBA Tribal Consultations: Is SBA Coming to a City Near You?

December 18th, 2019|

Written By:  Carissa Siebeneck Anderson and Jon DeVore

New SBA Rulemaking Proposes Sweeping Changes.  On November 8, 2019, the U.S. Small Business Administration issued a proposed rule that includes some of the most sweeping regulatory changes from SBA in the last decade: “Consolidation of Mentor Protégé Programs and Other Government Contracting Amendments.[i]  There are many changes proposed, including numerous high-impact changes that will affect all small businesses, the 8(a) Business Development Program, joint ventures, and the (to-be-consolidated) 8(a) and All-Small Mentor Protégé Programs.

Tribal Consultation Sessions.  SBA understands the gravity of these changes.  As result, it is conducting Tribal Consultation Sessions around the country for tribal leaders, tribally-owned businesses, Alaska Natives, and ANCs.  There will also be listening session for Native Hawaiian Organizations.  Attendees can voice concerns, offer alternative options, and ask questions of the SBA.  While SBA initially issued invitations for tribal consultation sessions directly to tribal leaders, it also recently issued a public notice regarding the upcoming sessions.[ii]  SBA has scheduled the following tribal consultation sessions:

  1. Minneapolis: Tuesday, December 10, 2019, 10:00 a.m. to 2:00 p.m. (CST), Minneapolis, Minnesota. The pre-registration deadline for this Tribal Consultation meeting is December 6, 2019.
  2. Anchorage: Wednesday, January 8, 2020, 10:00 a.m. to 4:00 p.m. (AKST), Anchorage, Alaska. The pre-registration deadline for this Tribal Consultation meeting is January 2, 2020.
  3. Albuquerque: Tuesday, January 14, 2020, 10:00 a.m. to 2:00 p.m. (MST), Albuquerque, New Mexico. The pre-registration deadline for this Tribal Consultation meeting is January 7, 2020.
  4. Oklahoma City: Thursday, January 16, 2020, 10:00 a.m. to 2:00 p.m. (CST), Oklahoma City, Oklahoma. The pre-registration deadline for this Tribal Consultation meeting is January 9, 2020.
  5. Honolulu: Tuesday, January 28, 2020, 10:00 a.m. to 2:00 p.m. (HST), SBA Hawaii District Office, Training Room 500 Ala Moana Blvd., Honolulu, Hawaii 96813.  The pre-registration deadline for this Listening Session is January 21, 2020.[iii]

BHBC’s Carissa Siebeneck Anderson attended the first session in Minneapolis, where she presented formal comments on behalf of a Tribal client.  BHBC also asked several questions and provided feedback to SBA officials on their specific areas of concern.  BHBC’s Jon DeVore will attend the Anchorage meeting in January.

Take Advantage of This Opportunity.  These in-person consultation sessions are prime opportunities to influence SBA policy for years to come. Whether or not you attend in person to discuss your comments with SBA, we also strongly recommend submitting written comments to the SBA.  All stakeholders should review these proposed changes to analyze the potential impact on their businesses, and to submit comments to SBA on high-impact issues. BHBC stresses that the SBA takes into consideration all comments both positive and negative about the proposed changes.  Written comments are important and numbers of comments do matter to the SBA.  This is particularly important on changes which are positive and which are supported by the small business community.  The deadline to submit comments is January 17, 2020.  We understand that SBA will NOT be extending this comment deadline, despite much of the comment period occurring during the busy end-of-year timeframe, the holidays, and another potential government shutdown looming.

BHBC Is Ready to Assist You in Drafting Comments.  Please contact us with questions about how these changes might affect your business.  We are ready to assist you by drafting substantive comments and answering your questions to ensure your business, Tribe, NHO, or ANC are effectively represented to the SBA.  If you have any questions, please contact Carissa Siebeneck Anderson or Jon DeVore.


[i] U.S. Small Business Administration (SBA) Proposed Rule, “Consolidation of Mentor Protégé Programs and Other Government Contracting Amendments,” 84 Fed. Reg. 60846, RIN: 3245-AG94, Docket No. SBA-2018-0006 (Nov. 8, 2019) (hereinafter “SBA Proposed Rule”), available at

[ii]  U.S. Small Business Administration (SBA) Notice of Tribal Consultations, 84 Fed. Reg. 66647 (Dec. 5, 2019), available at

[iii] This Listening Session is not included in the Federal Register announcement regarding tribal consultations.  The session will also occur after the official comment period ends, but SBA has given assurances that comments will be taken into consideration.  Pre-registration notice should be send to the same point-of-contact (Chequita Carter at or by fax to (202) 481-2177) as in the Federal Register announcement above for tribal consultations.

1510, 2019

Lease Tips for Marijuana Industry Landlords and Tenants

October 15th, 2019|

Written by Jason Brandeis

Alaska’s first retail marijuana store opened its doors in the fall of 2016. Since then, a few hundred Alaskan businesses have formed to support the industry, and the marijuana legalization movement is expanding nationwide. Currently, 11 states and the District of Columbia have legalized marijuana for general adult use, and a total of 33 states and D.C. have broad medical marijuana programs.

Despite these state-level changes, federal law continues to prohibit the use, possession, or sale of marijuana—a jurisdictional conflict that remains problematic for marijuana businesses. Businesses face challenges along a spectrum of minor inconveniences, such as being unable to alter a facility’s physical layout without regulatory approval, to major frustrations like unfavorable federal tax rules. Some of these challenges are downright dangerous and present public safety concerns, like lack of access to banking services, thereby forcing businesses to manage, store, and move large quantities of cash on and off site.

Indeed, despite an increasing market size and growing mainstream acceptance, marijuana businesses still cannot run like normal businesses; everything they do is a little harder and more complicated. This is true even in the realm of private agreements, where typical contract law proves insufficient. For example, and as discussed below, there are unique lease agreement considerations for all licensed marijuana establishments.

Leases play a critical role in marijuana licensing. Having exclusive legal access to the property where the facility is located is a precursor to licensure and a key component of the state’s regulatory framework. Unlike the alcohol industry, where licenses can be transferred from one operating location to another, marijuana establishment licenses are tied to a specific location. Therefore, if a licensee loses the right of possession, the business will be unable to operate, and the license itself will be jeopardized. Because a lease is such a critical part of a successful marijuana business in Alaska, it is important to understand the characteristics of this industry and pay close attention to them when representing clients in a marijuana-related transaction. When entering into a commercial lease for a licensed marijuana establishment—either as a landlord or tenant—there are a number of unique factors to consider.

Current and Exclusive Possession Required

An applicant for a marijuana establishment license in Alaska must prove: (1) access to the proposed licensed premises at the time of application; and (2) possession of the premises with each annual license renewal application—an ongoing requirement. Thus, it is important to ensure that leases do not lapse, and that the extension and renewal terms or options are clear and exercised as necessary.

A marijuana establishment must also demonstrate the right to possession of the entirety of the licensed premises—no portion of it may be subleased to another party for any reason. Accordingly, no one else can occupy the space and/or be paying rent at the time of license application. This can create unanticipated problems due to the length of the licensing process. In addition to Alaska’s typical weather-related or fishing season and construction delays, it takes a minimum of several months for the state’s Marijuana Control Board (MCB) to review the application, and then additional time before local requirements can bet met. Factoring time for buildout, permitting, and licensing, some licensees can expect to pay rent for almost a year before actually opening for business.

This is obviously a significant expense for a new business, and few can afford to absorb it. But without the ability to sublease while a license application is pending, that’s what marijuana businesses must do. Both landlord and tenant must understand that a gap between signing a lease and beginning operations is inevitable and can factor that into the rent—either through a pre-licensure grace period or with rental payments that escalate over time. “Lost” rental income during this early stage can be ameliorated by requiring a longer lease term, amortizing the “lost” year into the rent payments due following licensing, or negotiating rent that includes payment of a percentage of business revenue.

Clearly Establish and Explain Permitted Uses

The MCB will review the lease as part of each licensee’s application, and will look there for acknowledgement that the property can be used for marijuana establishment purposes. The lease must also clearly establish the type of marijuana establishment activity that will be permitted on the property (e.g., cultivation, product manufacturing, retail sales, or testing). Landlords may also want to require that the permitted use is conditioned upon the tenant remaining in compliance with all applicable laws and regulations.

Landlord Cooperation

Marijuana laws and regulations are constantly shifting, so leases may need to be revised, and other related regulatory filings may be required to maintain compliance. For instance, some local jurisdictions will require a supplemental statement from the landlord acknowledging that there will be a marijuana facility on the premises, many months after the lease is drafted. Landlords may also be asked to appear at local community council or planning commission meetings.

Landlords should understand their potential involvement in the licensing process and agree to not unreasonably withhold such assistance. Writing a clause into the lease acknowledging the ever-shifting legal framework can help avoid problems down the road. For example, a clause that provides, “The parties agree to make any amendments to the lease that are reasonably necessary to avoid failing to satisfy the requirements of local, state, or federal guidelines regarding marijuana enforcement, as those laws, regulations, and guidelines may be amended from time to time,” can protect the interests of both parties.

Limited Access to the Premises

A standard lease gives landlords the right to access the property at any time with reasonable notice in order to conduct inspections, perform maintenance/upkeep, and make any needed repairs. Toward the end of a lease term, landlords will require access to show the property to prospective tenants. However, if the leased property is a licensed marijuana establishment, marijuana regulations impact a landlord’s right of access, and both landlord and tenant must agree to comply with certain access conditions in order to successfully obtain a license.

Specifically, the landlord must acknowledge that they cannot enter or remain on the property unescorted, and that a tenant representative must serve as an escort during any entry; the landlord must agree to comply with the tenant’s established and approved visitor policies whenever accessing the premises; and if the landlord must enter the premises and the tenant cannot be reached or does not provide access, the landlord will agree to first contact the State of Alaska Alcohol and Marijuana Control Office (AMCO), or other relevant government authority, prior to accessing the premises. Similarly, in the event of the tenant’s default, the landlord must first contact AMCO prior to any re-entry or re-possession of the premises.

Restricted ability to take possession of property

Because only licensed marijuana establishments are authorized to possess regulated marijuana and marijuana products, the landlord may not take possession of or remove such property to satisfy any outstanding debts. Similarly, if a tenant abandons the property, or if there is any other event that would otherwise permit the landlord to re-possess the premises, or to enter the premises and remove personal property, the landlord must first contact AMCO for guidance and assistance.

The lease should be drafted to include a disclaimer that acknowledges these regulations, and landlords should be aware from the outset that taking possession of marijuana inventory will not be security against a breaching tenant.

Percent Rent

While a graduated or percentage rent agreement can be appealing, regulatory considerations extend beyond standard economic questions. The Alaska marijuana regulations are unclear on this topic, providing only that “rental charges on a graduated or percentage-lease rent agreement for real estate leased to a licensee” are not prohibited. This gives landlords and tenants latitude to negotiate a percentage of profits payment in addition to base rent, but regulators will closely scrutinize any lease that appears to use a percent rent payment as a way to circumvent other licensing or ownership requirements. Landlords and tenants should err on the side of reasonableness and negotiate a percent-rent rate that will pass regulatory muster.


If a landlord’s property is financed, a marijuana establishment on the property could jeopardize the landlord’s mortgage. Traditional lenders (i.e., banks) are conservative by nature, and most will not risk association with marijuana businesses. These lenders abide federal law. As far as most mortgagors are concerned, because marijuana is illegal under federal law, it is illegal. Full stop.

Mortgage loan agreements almost always provide for “compliance with all laws,” and make non-compliance grounds for default. Thus, renting mortgaged property to a marijuana business that operates outside federal law could violate the loan agreement. In that case, lenders have various rights and remedies, including declaring a default and calling a loan due in full, or commencing foreclosure proceedings. Some lenders might provide an opportunity to cure by allowing time for the offending tenant’s eviction. That is far from an ideal solution: it leaves the landlord without a tenant and the tenant without a place to operate its business and will likely lead to a messy dispute.

Landlords should know that their lenders could hold them in breach and consider that risk before renting to a marijuana establishment. To protect themselves, landlords may want to include a lease term that allows early termination without penalty in the event of a threatened mortgage default. Of course, that is risky for a tenant, whose business would always operate under a cloud of uncertainty.

Tenants likewise should seek to protect themselves. In the best-case scenario, a marijuana tenant would only lease property owned outright by the landlord or is otherwise not subject to a loan agreement with such compliance requirements. However, with commercial property suitable for marijuana businesses in short supply, that is not always an option. Tenants should therefore similarly be aware of the possibility of these mortgage-related risks and determine the status of a property’s financing before signing a lease. If the property is mortgaged, tenants could try to negotiate a lower rent price that accounts for this risk and seek terms that would otherwise minimize their damages. Tenants could also work with the landlord to provide alternative means for refinancing without a traditional lender.

Exclusion of the Federal CSA from “Unlawful Purpose” or “Illegal Use”

Finally, as with any marijuana-related contract, a lease agreement must address the federal-state law conflict. Standard lease agreements typically contain a term providing that the tenant shall comply with all laws, shall not use the property for any unlawful purpose, or that illegal activity is prohibited, and that failure to comply constitutes a breach. Such a broad clause could arguably allow a landlord to evict a marijuana establishment tenant at any time, because marijuana remains illegal under the federal Controlled Substances Act (CSA). It would probably be difficult for a landlord to evict solely on these grounds in a state where commercial marijuana activity is legal and where the lease expressly allows such a use, but this issue could be avoided entirely if the landlord and tenant stipulate that any unlawful purpose or illegal use excludes violation of the marijuana-related sections of the CSA.


Commercial marijuana landlord-tenant relationships can be difficult to navigate and are ripe with potential problems due to strict regulations and a continually shifting legal framework. Every lease will vary depending on the interests of the parties, the location of the property, and the type of activity contemplated. Consequently, marijuana industry leases should be given expert care and attention. If you are a landlord or tenant considering entering into a marijuana industry lease, feel free to contact Birch Horton Bittner & Cherot to set up a consultation.

Note: a version of this article appears in the September 2019 edition of The Alaska Bar Rag

1609, 2019

In Memory of Stanley T. Lewis (1953 – 2019)

September 16th, 2019|


Stanley T. Lewis was hired as an associate attorney at BHBC in June of 1980, immediately upon graduation from Pepperdine University School of Law.  Stan was admitted to practice in Alaska and Arizona.

In the 1980s, most attorneys at the firm were general practitioners, not specialists.  As a result, Stan’s early experience involved a plethora of civil and criminal litigation.  As Stan’s practice evolved, he continued to represent clients in litigation and conducted more than fifty criminal and civil trials.  He successfully represented clients before state and federal courts, appellate courts, bankruptcy courts, and administrative agencies.  Additionally, he was committed to resolving legal disputes through mediation, arbitration, judicial settlement conferences, and other forms of alternative dispute resolution.  Stan enjoyed working with clients directly and, as a result, he loved working in the area of personal injury and with injured maritime workers.

Stan had extensive construction litigation experience on behalf of subcontractors, general contractors, design professionals, owners, and public entities. He litigated claims of changed conditions, design flaw changes, fast track construction project claims, and “Little Miller Act” claims.  He also assisted owners/financiers in repossessions and transfers due to the insolvency of the general contractor.

Stan was well known to the other attorneys in his office for his expertise in the area of employment law.  He resolved numerous employment and labor claims on behalf of his clients, developing wide expertise in working with private investigators, economists, psychologists, accountants, physicians, claims consultants, business valuation experts, and vocational rehabilitation experts.  Stan served as a guest speaker on issues relating to employment claims, employee policy and procedure manuals, alternative dispute resolution agreements, and workplace privacy.

In later years, Stan concentrated his practice in the areas of healthcare, business and corporate law, and complex litigation.  He represented healthcare providers in matters involving all aspects of the client’s business, from formation and organization of corporate entities to purchases and sales of healthcare businesses, and everything in between (obtaining certificates of need, recruitment and discipline, contracts, medical device and drug liability, state and federal regulatory matters, covenants not to compete, Medicare and Medicaid compliance and audits, professional liability defense, and ERISA, among others).

Stan understood that the practice of law was primarily about the client.  The first question that Stan asked in any matter was: “What does the client want to do?”  Stan’s practice was the embodiment of the principal that the client came first, last, and always.  The next question was the most effective way to accomplish that end.  As a result, Stan’s clients respected him and admired his tenacity on their behalf.  Many of Stan’s clients became his life-long friends.

Stan was recognized for his ability to ask probing questions and to map out a strategy for successfully resolving the clients’ needs.  Stan was strong and determined, and sometimes a little stubborn, but he got the job done, no matter what it required in terms of time, energy, and talents.  He knew the importance of building a team and surrounded himself with attorneys, assistants, and staff who could get the job done and deliver a successful result.

Ultimately, for those who knew him personally, Stan was most respected as a family person.  There was never any doubt that his wife, Joan, his two boys, Adam and Alex, their families, and the grandkids were the reason he got up every morning.

Stan passed away on August 30, 2019, after a long and bitter battle with cancer.  He was surrounded by his family at home in Arizona.  He is greatly missed by all who knew him and his legacy and reputation at the firm will last for a very long time.  His most lasting impact was just being who he was.

1109, 2019

Injuries on the Jobsite and the Legal Fallout

September 11th, 2019|

Written by Adam W. Cook

When I was in college, I spent my summers working with construction crews back home in Alaska.  In addition to giving me exposure to the industry, I learned about the importance of workplace safety.  During my first day on the job on a project, I got a stern talking-to for coming to work without steel-toed boots.  Every project manager and superintendent I worked under was determined to maintain an accident-free jobsite—and for good reason.  Injuries can mean delays in work, loss of crew morale, and legal headaches.

Sometimes efforts to keep a project free of injuries can have unintended results.  I worked for one supervisor who decided to hold a pizza party every Friday if the crew finished the week without an accident or injury.  At one point, a co-worker had his thumb crushed while moving boxes.  The other members of the crew urged him not to report the injury or seek first aid, because they wanted to get their free pizza.  The poor guy went home nursing an injury that he felt he could not tell anyone about.

The temptation to simply keep quiet about even serious injuries can be strong, but managers must not succumb to it.  Alaska law requires that an employer report any in-patient hospitalization resulting from a workplace injury to the Alaska Occupational Safety and Health section of the Department of Labor (“AKOSH”).  The employer has eight hours to make the call to the AKOSH toll-free number.  Even if the injury is not the result of some failure to follow safety measures, and even if the result is just a few hours in the emergency room, employers have to make the call.

AKOSH is essentially the enforcement arm of the federal Occupational Safety and Health Administration.  AKOSH will send an investigator out to the jobsite immediately following an injury.  The investigator will interview individuals who witnessed the accident, including the injured person.  He or she will also take photographs, ask for a copy of the employer’s safety plan, and look around for any OSHA regulation violations, even if they are unrelated to the injury.  The inspector will also be looking for remediation of the conditions that caused the injury.  The employer’s attorney may be present for this inspection.

AKOSH inspections do not happen only following an injury.  Any employee can individually call the department and report a safety problem, prompting an inspection.  AKOSH will conduct the inspection “as soon as practicable.”  Alaska law provides stiff penalties for employers who respond with retribution against whistleblowers.

After an injury and an inspection, employers are anxious to know what comes next.  AKOSH can wait up to 180 days to decide whether or not to issue a citation.  If a citation is issued, the proposed penalty will usually be a monetary fine.  However, a fine is not the heaviest burden on the employer.  Citations generally describe each of the employer’s violations as “serious” or “other than serious.”  The first category of violations can do serious reputational damage to a contractor.  Not only is the existence of a serious violation public record on the AKOSH website, it is also something a contractor may have to report to project owners or general contractors when bidding for a job.  It is a black mark that could prevent a contractor from getting work.

Why does Alaska and federal law levy such heavy penalties following accidents?  Because injuries, especially in construction, are a serious concern.  In 2017 Alaska led the country in per-capita workplace deaths, with the construction industry experiencing 9.5 deaths per 100,000 people employed in the industry.  Nonfatal injuries are much more common.  In 2017, there were 2.4 nonfatal reported injuries for every 100 people employed in construction.  The number of unreported injuries was doubtless very high as well.

Finally, employers should know that not every injury automatically means a citation.  Sometimes, the best safety practices in the world cannot prevent injury.  If an injury is caused by equipment failure due to an equipment manufacturing defect, that is not necessarily an OSHA violation.  If an employee is under the influence of drugs or alcohol and gets injured as a result, the employer may not be liable for the employee’s misconduct, provided the employer had no way of knowing or preventing what the employee did.  These are some of the defenses an employer can present when fighting back against an unjustified citation.  After all, AKOSH can make mistakes too.  Strong legal representation can keep employers from being burdened by an incident that was simply not their fault.

309, 2019

What’s My New SBA Size Standard?

September 3rd, 2019|

Written by Carissa Siebeneck Anderson

The U.S. Small Business Administration (SBA) has been busy.  SBA has released several rules lately, and more are coming.  If you were hoping that SBA would increase the size standards for your receipt-based NAICS code, you are in luck.  If you were close to sizing-out and you were hoping for an immediate increase of the higher size standard, then it really is your lucky day.

On July 18, 2019, SBA issued an interim final rule to raise its monetary size standards to adjust for inflation.  This rule (including many new size standards) went into effect on August 19, 2019.  Please note that SBA is also still accepting comments on this rule.  The comment deadline is September 16, 2019, and comments can be submitted online at

Why is SBA adjusting is size standards? In order to fulfill both statutory and regulatory requirements to periodically review its size standards for inflation, SBA completed the review and has decided to adjust its monetary-based industry size standards (but not those based on employee numbers) for the inflation that has occurred since the last inflation adjustment, which was published in June 2014.

As result, adjustments were made to 518 industries and 9 subindustries that use receipts-based standards as well as 5 industries that use assets-based size standards.  SBA also took this opportunity to adjust two program-specific receipts-based size standards for sales/leases of government property and stockpile purchases.  SBA issued this inflation adjustment as an interim final rule, so that small businesses will get the benefit of the higher size standards as soon as possible, even though SBA plans to review (and potentially adjust) its size standards again in the near future based on its 5-year review of industry and Federal market conditions.

How much is the inflation adjustment?  SBA found inflation of 8.37% for all receipts-based size standards (except the agricultural standard discussed below), so SBA adjusted those standards by multiplying the current size standards by 1.0837; SBA then rounded the result to the nearest $500,000.  SBA found a 40.26% inflation adjustment was warranted for the $750,000 agricultural size standard, so SBA multiplied those 46 agricultural industries with a size standard of $750,000 by 1.4026 and rounded to the nearest $500,000, resulting in a new standard of $1,000,000 for all 46 agricultural industries.

Below is a re-creation of Table 1 from the Interim Final Rule.  It demonstrates the specific impact of the inflation adjustment on size standards of varying levels.  The third column shows the newly adjusted size standards, including SBA’s adjustments made for rounding.

The Rule at a Glance information below includes a link to the rule, which includes a full copy of the affected size standards.  If you have any questions about this rule, how to calculate your business’s size, or how this rule may impact your business, please contact Carissa Siebeneck Anderson or Jon DeVore.

Rule at a Glance

Citation: Small Business Size Standards: Adjustment of Monetary-Based Size Standards for Inflation, 84 Fed. Reg. 34261 (July 18, 2019).
RIN: 3245-AH17
Docket ID: SBA-2019-0008
Effective Date: August 19, 2019
Comment Deadline: September 16, 2019
Link to Rule: