Tag: Alaska

Here’s Where US Attorneys Stand on Cannabis Enforcement

Don’t expect Jeff Sessions’ undoing of the Cole memo to unleash a nationwide crackdown. By rescinding Justice Department guidelines that encouraged federal prosecutors to take a hands-off approach in legal states, the attorney general isn’t so much dropping bombs as he is encouraging his lieutenants to fire at will. It will be up to individual US attorneys to pull the trigger.

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In other words, a crackdown on state-legal cannabis, if it comes, will likely happen unevenly. District by district, US attorneys will decide for themselves how to enforce federal cannabis law—or whether to enforce it at all. This is exactly what we saw in California during the last major federal crackdown, in 2011 and 2012. US attorneys in some parts of the state tried to close every dispensary in their districts, while others allowed shops to operate unimpeded.

US attorneys are playing their cards very close to their chests.

In this new normal, it’s crucial to understand not just Sessions’ views, but also where each US attorney stands on cannabis. To that end, we’re tracking how US attorneys in legal states have responded to the removal of the Cole memo—and how likely they are to take action.

You’ll notice a common theme as you read through this piece: US attorneys are playing their cards very close to their chests. Most have issued murky statements that can be interpreted in a number of ways. We’ve done our best to parse the available information and add to those statements to get a better sense of the risk of prosecution in that district.

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Initially we’ll be looking at states that have legalized adult-use cannabis. This page will be updated to include more information about US attorneys in medical-only states.

Each state has at least one federal district. A US attorney acts as the chief federal prosecutor for his or her district. (Courtesy of the US Department of Justice)

Alaska

US Attorney Brian D. Schroder, a Trump appointee whom the Senate confirmed in November, isn’t giving us much to go on. He said in a statement shortly after Sessions’ announcement that his office would continue using “long-established principles” in deciding which cases to charge. He added that violent crime, including that which stems from drug crimes, has been a top priority. His office has declined to comment further.

Schroder’s statement—like his record on cannabis—is awfully thin. Aside from any violent incidents in the state system, which would almost certainly draw his attention, it’s not yet clear what action, if any, his office might take.

Prosecution Risk: UNKNOWN

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California

Central District (Los Angeles)

Interim US Attorney Nicola T. Hanna took his post last week, when Sessions appointed him and 16 others as interim US attorneys. So far both Hanna and his predecessor, Sandra Brown, have been mum on enforcement, which could be an ominous sign if the office weren’t in the midst of a transition. As it is, it doesn’t tell us much.

It’s worth noting that Hanna was a federal prosecutor in Los Angeles and San Diego during the 1990s, when the war on drugs was in full swing. He then left the office for private practice, taking a position at the international firm Gibson Dunn. He hasn’t said much on cannabis, but in the 2016 presidential election, records show he gave $2,700 to the campaign of Chris Christie—a notorious anti-cannabis crusader.

Complicating it all, Hanna’s gig is only temporary. As an interim US attorney, he can serve for 120 days until President Trump must appoint someone and seek Senate confirmation.

Prosecution Risk: LOW/MEDIUM

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Eastern District (Sacramento)

US Attorney Scott W. McGregor, a Trump appointee currently awaiting Senate confirmation, already held the position under President George W. Bush. While in office, he targeted large-scale cannabis operations and developed a reputation for seeking harsh sentences. As the Sacramento Bee reports, at the time he asked local authorities to refer cannabis cases to federal prosecutors. He also went after a pair of dispensary operators who were convicted in 2008 and each sentenced to 20 or more years in prison. (President Barack Obama granted one of the two men clemency in 2017. The other is still behind bars.)

Following Sessions’ memo, McGregor spokesperson Lauren Horwood said the office would evaluate possible enforcement actions “in accordance with our district’s federal law enforcement priorities and resources.” That’s pretty standard boilerplate and doesn’t tell us much, but McGregor’s enforcement history suggests he wouldn’t be shy about going after cannabis businesses if he feels they’re too far out of line.

“He used to be a hardcore, anti-cannabis drug warrior,” Sebastopol lawyer Omar Figueroa told the Sacramento Bee. “I hope he has evolved.”

Prosecution Risk: MEDIUM

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Northern District (San Francisco)

Acting US Attorney Alex G. Tse took over for former US Attorney Brian Stretch, who announced through a spokesperson on Jan. 4 that he would be leaving the post. It was the same day Sessions rescinded the Cole memo, though Stretch said the announcement was not the reason for his departure.

Despite their San Francisco office location, Northern District prosecutors have a reputation for interfering with California’s legal-cannabis system even when local officials push back. The office famously undertook—and famously lost—a multiyear case against Oakland’s Harborside Health Center, perhaps the state’s best-known dispensary.

Tse, for his part, spent most of the 2011-12 federal crackdown in California working in the San Francisco District Attorney’s Office. The experience likely gave him an understanding of the close working relationship between federal and local authorities—something that might give him pause before bringing cases against locally approved, state-licensed businesses.

Prosecution Risk: LOW

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Southern District (San Diego)

Interim US Attorney Adam L. Braverman was appointed by Jeff Sessions in November, though he’s been a federal prosecutor in the Southern District since 2008. His focus was large, international drug-trafficking cartels, and after being sworn in as US attorney last year, he said he wanted to prioritize “those crimes committed by transnational criminal organizations.”

On its face, that seems just fine. State-legal cannabis has shrunk the illegal market in the United States, and Braverman may rightly see prosecuting licensed businesses as a surefire way to reinvigorate cartels. But sometimes when you’re a hammer, everything looks like a nail.

More worrisome is Braverman’s statement following the Sessions memo: “The Department of Justice is committed to reducing violent crime and enforcing the laws as enacted by Congress. The cultivation, distribution, and possession of marijuana has long been and remains a violation of federal law,” he said. “We will continue to utilize long-established prosecutorial priorities to carry out our mission to combat violent crime, disrupt and dismantle transnational criminal organizations, and stem the rising tide of the drug crisis.”

If Braverman does his homework, he’ll see that legalization tends to accomplish those priorities. But if he views legal cannabis as part of the problem, watch out.

Prosecution Risk: MEDIUM

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 Colorado

(Courtesy of DOJ)

US Attorney Robert C. Troyer became an acting US attorney in 2016 and was appointed interim US attorney by Jeff Sessions in November. Asked by the Denver Post about the Sessions memo, Troyer’s office provided this response:

Here is the question we ask every time we consider allocating our finite resources to prosecute any of the vast number of federal crimes we can prosecute, from violent crime to immigration crime to opioid crime: Will this prosecution make Colorado safer? … Under the attorney general’s new memo, we have more freedom and flexibility to make decisions that make Colorado safer by prosecuting individuals and organizations for marijuana crimes that significantly threaten our community safety.

US attorneys often point to their own district’s unique needs when explaining their enforcement priorities, so this doesn’t tell us much—although it does suggest Troyer could take action in response to local officials who believe legal cannabis is a threat to public safety, as has happened in past crackdowns.

For now, Troyer said he would “continue to take” the approach his office has been using—suggesting not much will change in the short term. Colorado Attorney General Cynthia Coffman told the Post that she had asked Troyer to “please notify me … if there is going to be any change in those priorities or in those actions so that we have a heads-up. And I have his agreement that he will do that.”​ In the meantime, she said, “I would encourage people not to freak out.”

Prosecution Risk: LOW/MEDIUM

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Maine

(Courtesy of DOJ)

US Attorney Halsey B. Frank, a Trump nominee, was confirmed by the Senate in October. To his credit, he’s issued a lengthy statement on the Sessions move. Unfortunately, like most other US attorney statements so far, it doesn’t offer much in the way of clarity. “My job is to enforce federal law, not countermand it,” Frank said. “I do not have the authority to categorically declare that my office will not prosecute a class of crime or persons.”

Unlike some other US attorneys, Frank has spoken out publicly against legalized cannabis in the past. In a 2013 column in The Forecaster newspaper (published after the Cole memo), he wrote that when “there is a conflict between state and federal law, federal law prevails.” Maine’s state law, which at the time allowed medical use of cannabis, “is not a defense to federal prosecution for manufacturing or distributing marijuana,” he wrote.

Lest you think he was just opining on legal procedure, he also included this veiled jab at legalization: “Society can only tolerate a certain number of intoxicated people on its streets and highways, at school, at work and at play.” (You can read his full column here.)

One bright spot, especially for individuals: Frank’s recent statement notes that his office “has prioritized the prosecution of cases involving the trafficking of opiates, cocaine, crack and similar hard drugs.” Prosecuting individuals for possession, he said, “has not been a priority.”

Prosecution Risk: MEDIUM

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Massachusetts

US Attorney Andrew E. Lelling, a Trump nominee, was confirmed by the Senate in December. In response to the Sessions memo, he issued a statement saying he could not “provide assurances that certain categories of participants in the state-level marijuana trade will be immune from federal prosecution.”

This is a straightforward rule of law issue.  Congress has unambiguously made it a federal crime to cultivate, distribute and/or possess marijuana.  As a law enforcement officer in the Executive Branch, it is my sworn responsibility to enforce that law, guided by the Principles of Federal Prosecution.  To do that, however, I must proceed on a case-by-case basis, assessing each matter according to those principles and deciding whether to use limited federal resources to pursue it.

This has the noncommittal air of some other US attorneys’ statements, but the tone is comparatively harsh. While it doesn’t signal a categorical crackdown on cannabis businesses, it certainly suggests the office could bring targeted actions against certain state-legal actors.

More worrisome is the relative lack of local pushback to Sessions rescinding the Cole memo. While officials in many other legal states have decried the move, Massachusetts elected officials, many of whom opposed the 2016 ballot question that legalized cannabis, have been relatively quiet.

Prosecution Risk: MEDIUM/HIGH

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Nevada

Interim US Attorney Dayle Elieson was one of 17 interim US attorneys appointed by Sessions last week. Before the appointment, she was an assistant US attorney in Texas, where she focused on fraud, money laundering, and terrorism. As a new arrival to Nevada, she’s a relatively unknown quantity, and Nevada officials are eagerly awaiting further guidance from the office.

“I know that the US attorney in Colorado has already said that he is not going to enforce federal laws against the legalized marijuana industry in that state,” Gov. Brian Sandoval told the Las Vegas Review-Journal. “I would like to see something similar here in Nevada, but that’s a discussion that needs to be had.” (It’s worth noting that Sandoval may be overstating assurances by Colorado US Attorney Robert C. Troyer; see the Massachusetts section of this story, above.)

Nevada’s legal cannabis program has strong support from state and local officials, which could help dissuade Elieson from taking a hardline stance legal against legal cannabis while still new to the office. Federal prosecutors tend to work closely with local law enforcement and other partners, and targeting cannabis could risk hurting those relationships.

As an interim US attorney, Elieson’s post is only temporary. She’ll be able to serve for 120 days before Trump must nominate someone for the position and seek Senate confirmation.

Prosecution Risk: UNKNOWN

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Oregon

(Courtesy of DOJ)

US Attorney Billy J. Williams, who became an acting US attorney in 2015 and was nominated by Trump in November to remain in the post, has already expressed concerns with the state’s cannabis regulatory system. In an interview with the Associated Press last year, he complained about what he said was insufficient enforcement by the state to prevent cannabis from being illegally exported to states where it’s not legal. Stopping diversion to other states was a key piece of the now-rescinded Cole memo.

Following Sessions’ move last week, Williams put out the following statement:

As noted by Attorney General Sessions, today’s memo on marijuana enforcement directs all U.S. Attorneys to use the reasoned exercise of discretion when pursuing prosecutions related to marijuana crimes. We will continue working with our federal, state, local and tribal law enforcement partners to pursue shared public safety objectives, with an emphasis on stemming the overproduction of marijuana and the diversion of marijuana out of state, dismantling criminal organizations and thwarting violent crime in our communities.

It sounds like Williams might be OK with Oregon’s cannabis program when it works, but failures—including things like diversion, violence, or illegal sales to minors—could prompt him to take action. So he’s presumably not too pleased with reports like one issued this week by Oregon cannabis regulators that found a number of stores around the state that reportedly sold cannabis to minors.

Prosecution Risk: LOW/MEDIUM

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Washington, DC

US Attorney Jessie K. Liu, a Trump nominee whom the Senate confirmed in September, has said through a spokesperson that the office is “committed to reducing violent crime and dismantling criminal gangs and large-scale drug distribution networks that pose a threat to public safety.”

Washington, DC, is unusual in that it allows individuals to grow, possess, consume, and even give away cannabis but, due to pressure from federal lawmakers, forbids purchases or sales. The laws have led to the emergence of a thriving gray market in which consumers make “donations” or purchase other items and are “gifted” cannabis as part of the transaction. Liu may take a closer look at these businesses—they are, after all, operating in Jeff Sessions’ backyard—but it seems unlikely at this point that she’ll bring cases against individuals who follow the law.

Prosecution Risk: LOW/MEDIUM

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Washington State

Eastern District (Spokane)

Interim US Attorney Joseph Harrington was another of the 17 interim US attorneys appointed by Sessions last week. He’s a longtime federal prosecutor, with nearly three decades of experience handling the office’s criminal division, health care cases, and terrorism matters.

Harrington has said hardly anything about how Sessions’ move would affect his office’s cannabis enforcement. Immediately following the undoing of the Cole memo, he directed questions directly to the main Justice Department press office in Washington, DC. The Eastern District, nevertheless, has come to be seen as an aggressive enforcer by many in the state’s legal cannabis industry. The office sought criminal charges, for example, against a family of medical cannabis patients who became known as the Kettle Falls Five.

Harrington filed a motion in October to put that case on pause, noting that a federal spending provision—which had been adopted three years earlier and halted a blockbuster California case in May 2016—prevented the case from going forward. But that provision, the Rohrabacher–Blumenauer amendment, is set to expire later this month, and it only blocks prosecutions against medical operations. Currently nothing stands in the way of Harrington bringing cases against the state’s many adult-use businesses.

Prosecution Risk: MEDIUM

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Western District (Seattle)

US Attorney Annette L. Hayes, who became acting US attorney in 2014 after her predecessor resigned, remained in the position after President Barack Obama declined to make an appointment. On the day Sessions rescinded the Cole memo, she issued this statement:

Today the Attorney General reiterated his confidence in the basic principles that guide the discretion of all U.S. Attorneys around the country, and directed that those principles shepherd enforcement of federal law regarding marijuana.  He also emphasized his belief that U.S. Attorneys are in the best position to address public safety in their districts, and address the crime control problems that are pressing in their communities.  Those principles have always been at the core of what the United States Attorney’s Office for Western Washington has done – across all threats to public safety, including those relating to marijuana.  As a result, we have investigated and prosecuted over many years cases involving organized crime, violent and gun threats, and financial crimes related to marijuana.  We will continue to do so to ensure – consistent with the most recent guidance from the Department – that our enforcement efforts with our federal, state, local and tribal partners focus on those who pose the greatest safety risk to the people and communities we serve.

This may be the most supportive statement of state-legal cannabis to come out of a US attorney’s office in the wake of Sessions’ announcement. Read between the lines. Hayes’ almost cheeky use of “reiterated” suggests little or nothing has changed in her eyes. Rather than read Sessions’ move as a sign the attorney general wants to see more cannabis cases—which, given Sessions’ views on cannabis, it almost certainly was—Hayes’ comments interpret the memo as an endorsement of local discretion. “Thanks for trusting us to do a good job,” the statement seems to say. It’s likely that wasn’t by accident.

Prosecution Risk: LOW

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The Associated Press contributed to this report.


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Alaska Authorities Vow to Fight Feds on Legal Cannabis

Alaska Gov. Bill Walker said he wants to prevent federal overreach after U.S. Attorney General Jeff Sessions ended an Obama-era policy Thursday that paved the way for legalized marijuana to flourish in states like Alaska.

Walker said in a statement that he’s committed to upholding the will of Alaska voters, who legalized recreational cannabis use in 2014. He said he would work with the Justice Department and the state’s Republican congressional delegation—which has cast cannabis as a states’ rights issue—to prevent federal overreach.

Alaska’s senior U.S. senator, Republican Lisa Murkowski, called Sessions’ announcement ‘disruptive’ and ‘regrettable.’

Spokesman Jonathon Taylor said Walker and state Attorney General Jahna Lindemuth were evaluating possible options for doing that. Lindemuth said her office has a duty to uphold and implement state law.

Alaska’s senior U.S. senator, Lisa Murkowski, said she had asked Sessions to work with states and Congress if he thought changes were needed. The Republican called his announcement “disruptive” and “regrettable.”

The state, in setting up its marijuana industry, drew guidance from a memo from President Barack Obama’s administration that limited federal enforcement of the drug, as long as states prevented it from getting to places it was still outlawed and kept it from gangs and children. Marijuana remains illegal at the federal level.

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Sessions said the previous guidance “undermines the rule of law” and said U.S. prosecutors in the states where cannabis is legal could decide which marijuana activities to prosecute.

Alaska’s Attorney General Jahna Lindemuth said her office has a duty to uphold and implement state law.

It was not immediately clear how Alaska U.S. Attorney Bryan Schroder would respond. His office referred questions to the Department of Justice press office.

Marijuana industry advocates said Sessions’ decision creates confusion and flies in the face of a growing legalization movement.

Chris Lindsey, senior legislative counsel with the Marijuana Policy Project, said prosecutors previously had discretion. But there is a new attorney general, “who I guess wants to reverse the course of history or something,” he said.

Jane Stinson, a part owner of the retail marijuana shop Enlighten Alaska in Anchorage, worries about the potential effect on her business, which had been looking to grow and is negotiating a lease for another building.

Sessions’ decision feels vindictive and unreasonable, she said.


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Data Dive: Alaska’s Cannabis Industry Grows for 7th Consecutive Month

September was another record-setting month for Alaska’s adult-use cannabis industry, with the state Department of Revenue’s latest report last week showing that the state collected $723,757 in cannabis taxes from cultivators during that month.

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The record-setting month is the seventh consecutive month to break state sales records. That’s good newsfor the Last Frontier’s cannabis market, which got off to a slow start during its first few months of operation. September also saw Alaska set records in amount of trim sold as well as the number of cannabis taxpayers.

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Despite summer tourism beginning to die down, cannabis sales have continued to show steady growth since the beginning of summer in May. Although the growth of average tax payments has slowed down a bit, there continues to be more operators paying cannabis taxes each month, showing continued growth in the industry.

With some of the tourist numbers beginning to go down since summer, flower sales have slowed in pace—a relationship visible in the graphs above. Sales of trim or other parts of the cannabis plant, however, are up.

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Data Dive: Alaska Cannabis Sales Continue to Rise

The Alaska Department of Revenue is reporting record highs sales figures for August. The state collected $694,364 in cannabis taxes during that month, which is the most collected to date.

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August’s numbers also mean that it is the sixth consecutive month in Alaska that the state has set a new record for wholesale cannabis sales.

Cannabis sales continue to progress nicely, as summer tourism really helped ratchet up sales in the state. Also, it should be noted that the average amount of taxes paid by each cultivator has declined in recent months, as the total number of taxpayers in the cannabis industry grows.

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In August, the state recorded 734 pounds of cannabis bud sold by growers to retail stores. 444 pounds of other cannabis plant parts were also sold during the month.

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Marijuana Shop Creates Chasm in Alaska Tourist Town

TALKEETNA, Alaska (AP) — The presence of a marijuana retail store has caused a deep divide in this quirky tourist town, where hundreds of visitors roam the streets daily browsing in art galleries and souvenir shops housed in historic cabins.

Most of Talkeetna’s stores line the two long blocks that make up its Main Street, where tourists — many who arrive in Alaska on cruise ships and are bused about two hours north from Anchorage — wander into storefronts like Nagley’s General Store for ice cream or slip through its back door for a cold one at the West Rib Bar and Grill.

At Main Street’s opposite end, near a river park where visitors snap photos of the continent’s largest mountain, is Talkeetna’s newest venture into the tourism trade. The High Expedition Co. is a nod to the rich mountain climbing history of the eclectic community purported to be the inspiration for the 1990s television series “Northern Exposure.”

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Talkeetna’s first marijuana retail store is causing a rift not seen in other tourist-dependent towns in this Libertarian-leaning state, where marijuana had a casual acceptance long before it became legal. But even here, like in many cannabis-legal states, some towns have opted out of sales, fearful it might invite crime and other evils.

In Talkeetna, some shop owners — the ones who built a multimillion-dollar business from the steady stream of mountain climbers who use Talkeetna as a staging point for treks up Denali — say this one shop could ruin the tiny town’s historic atmosphere and harm business like the eight or so stores that serve alcohol along Main Street could never do.

“I don’t think he belongs in downtown Talkeetna,” Meandering Moose B&B owner Mike Stoltz said.

Joe McAneney co-owns the High Expedition Co., which opened in mid-May. “The sky hasn’t fallen on Talkeetna, the sun is shining, and this is now the most photographed shop in town,” he said.

Grabbing the attention of amateur shutterbugs is a small “Cannabis Purveyors” wooden sign on the store’s deck.

McAneney has been working to open the shop nearly since the day in 2014 that Alaska residents voted to legalize recreational marijuana. He and a partner bought the cabin that was originally built for Ray Genet, an early Talkeetna climber and guide who died in 1979 on Mount Everest. McAneney worked with Genet’s family and has incorporated a small museum dedicated to Genet and Talkeetna’s climbing history. But even that association led to some disdain.

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“Small towns in Alaska are harder than anywhere to break into and sort of become accepted,” McAneney said.

His store got its approval from the borough on a technicality when the assembly was writing regulations for marijuana businesses in unincorporated areas, like Talkeetna, and inadvertently omitted special land use districts — like the town’s Main Street. Talkeetna has no local governing body, only a nonvoting community council whose sole power is sending recommendations to borough officials roughly 75 miles (120 kilometers) away.

State regulators approved the store’s permit on a 3-2 vote last spring.

“There’s people that are upset about it, but it’s legal,” said Sue Deyoe, the Talkeetna Historical Society and Museum’s executive director.

“Are we going to take the law into our own hands? Duct-tape him?”

Mike Stoltz, Meandering Moose B&B owner

Opposition mounted as the issue went before state regulators, where a stream of residents unsuccessfully called in to the Anchorage meeting to oppose the store’s license.

Among the biggest issue for critics is the lack of places for tourists to puff the marijuana they buy. Smoking cannabis in public is illegal, and that led to fears the nearby river park would become the place to partake.

Alaska State Troopers say there were no citations issued for anyone consuming marijuana in public in Talkeetna from April 1 to July 1, the same as last year.

But opponents argue Talkeetna is lawless, with the closest trooper an hour away. “What are we supposed to do?” asked Stoltz, the bed and breakfast owner. “Are we going to take the law into our own hands? Duct-tape him?”

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Stoltz said the very presence of a cannabis store will harm business in the historic town, where residents make a year’s living between Memorial Day and Labor Day.

“If we lose our tourism, we lose what Talkeetna is,” he said. “We’re not catering to stoner tourists. To me, that’s the conflict with Joe.”

Seeing a cannabis shop on Talkeetna’s main drag didn’t bother 65-year-old Jeff White, visiting from the Louisville, Kentucky, area.

Talkeetna has the artsy feel of a tourist town in Colorado, which also has legal marijuana, he said. “This goes with that vibe, and I think that’s fine.”

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One resident dismisses the idea that the store is giving Talkeetna a black eye. But it is dividing the town, Christie Stoltz said, noting the chasm has reached her home. She’s the daughter of Mike Stoltz, the B&B owner.

“I feel like it’s generations — the older generation versus the younger generation,” she said.

For some, marijuana was never an issue, Deyoe said, and it pales in comparison to a controversy last spring when the borough proposed leveling trees over an area about the size of eight football fields for an expanded parking lot for summer use.

“I think the community council got way more letters on that than they did in reaction to the marijuana shop,” she said.


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Alaska Proposal Would Open Door to On-Site Consumption

After flirting for months with permitting on-site consumption at retail cannabis stores, the Alaska Marijuana Control Board has officially proposed regulations to allow the idea to move forward.

The development comes after months of discussion on the issue. In February, following a push to permit on-site consumption, regulators voted 3-2 to reject a proposal that would have allowed it

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Since the narrow rejection, the discussion has grown increasingly contentious. Some worry the lack of a legal place to consume could hurt cannabis sales in the state, especially given Alaska’s thriving tourism industry. Others worry visitors will simply spark up somewhere else.

The proposed regulatory changes would allow dispensaries to apply for on-site consumption endorsements that would allow customers to consume cannabis products on the premises.

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Public comment is being accepted until 4:30 p.m. on Oct. 27 and can be submitted by email at amco.regs@alaska.gov or online through the Alaska Online Public Notice System. Written comments can be sent to the Alcohol & Marijuana Control Office, at 550 West 7th Ave., Suite 1600, Anchorage, AK 99501.

Written questions can also be submitted until 10 days before the public comment section closes.

Alaskan adult-use cannabis market is starting to find its groove, but sales still lag far behind the state’s original projections. From October—the first month of legal cannabis sales—through June, Alaska collected roughly $1.75 million in cannabis tax revenue—over a quarter of a million dollars less than the state had originally projected.

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Governors of 2 Cannabis States Push Back on Trump Administration

JUNEAU, Alaska (AP) — Governors in at least two states that have legalized recreational marijuana are pushing back against the Trump administration and defending their efforts to regulate the industry.

Alaska Gov. Bill Walker, a one-time Republican no longer affiliated with a party, sent a letter to U.S. Attorney General Jeff Sessions this week asking the Department of Justice to maintain the Obama administration’s more hands-off enforcement approach to states that have legalized the drug still banned at the federal level.

“Given the diversity of public sentiment regarding marijuana throughout the country, marijuana regulation is an area where states should take the lead.”

Jahna Lindemuth, Attorney General of Alaska

It comes after Sessions sent responses recently to the governors of Alaska, Colorado, Oregon and Washington, who asked him to allow the legalization experiments to continue in the first four states to legalize recreational marijuana. Sessions detailed concerns he had with how effective state regulatory efforts have been or will be.

Washington state also responded to Sessions this week. Gov. Jay Inslee said the attorney general made claims about the situation in Washington that are “outdated, incorrect, or based on incomplete information.”

“If we can engage in a more direct dialogue, we might avoid this sort of miscommunication and make progress on the issues that are important to both of us,” Inslee and that state’s attorney general wrote to Sessions.

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Since taking office, Sessions has promised to reconsider cannabis policy, providing a level of uncertainty for states that have legalized the drug. A task force assembled by Sessions encouraged continued study of whether to change or rescind the approach taken under former President Barack Obama.

In Alaska, Walker said he shared Sessions’ concerns about the dangers of drug abuse but said state rules for marijuana businesses address federal interests, including public health and safety concerns. The governor said Sessions cited a 2015 state drug report in raising questions about Alaska’s regulations but noted that the first retail shops didn’t open until late last year.

The state is taking “meaningful” steps to curb illegal cannabis use, especially by those who are underage, Walker and state Attorney General Jahna Lindemuth wrote in the letter obtained through a public records request.

In a separate letter, Lindemuth was more pointed.

“Given the diversity of public sentiment regarding marijuana throughout the country, marijuana regulation is an area where states should take the lead,” she wrote.

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Alaska political leaders have long pushed back on issues where they think the federal government is overstepping its bounds. The state’s lone U.S. House member, Republican Rep. Don Young, said he’s never smoked pot but supports states’ rights.

The state voted on it, “and the federal government should stay out of it,” he told the AP last year.

The largest voting bloc in the state is not affiliated with a political party, though President Donald Trump won with just over 50 percent of the vote last fall. Voters in 2014 approved recreational marijuana, with about 53 percent support.


Thanks you for visiting FLMMCC.com, the premier Medical Marijuana Certification Center in Florida. Currently, there is a Medical Marijuana Initiative on the November 2016 Ballot to legalize High-THC Medical Marijuana in the State of Florida. The FLMMCC Florida State Licensed Doctors are ready to review your medical records for a “FREE Pre-Qualification”. This will be the first step in becoming a legal Florida Medical Marijuana patient when the law passes.

Cannabis States Try to Curb Smuggling, Fend off Administration

PORTLAND, Ore. (AP) — Well before Oregon legalized marijuana, its verdant, wet forests made it an ideal place for growing the drug, which often ended up being funneled out of the state for big money. Now, officials suspect cannabis grown legally in Oregon and other states is also being smuggled out, and the trafficking is putting America’s multibillion-dollar marijuana industry at risk.

In response, pot-legal states are trying to clamp down on “diversion” even as U.S. Attorney General Jeff Sessions presses for enforcement of federal laws against marijuana.

Tracking legal cannabis from the fields and greenhouses where it’s grown to the shops where it’s sold under names like Blueberry Kush and Chernobyl is their so far main protective measure.

In Oregon, Gov. Kate Brown recently signed into law a requirement that state regulators track from seed to store all marijuana grown for sale in Oregon’s legal market. So far, only recreational marijuana has been comprehensively tracked. Tina Kotek, speaker of the Oregon House, said lawmakers wanted to ensure “we’re protecting the new industry that we’re supporting here.”

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“There was a real recognition that things could be changing in D.C.,” she said.

The Washington State Liquor and Cannabis Board says it’s replacing its current tracking Nov. 1 with a “highly secure, reliable, scalable and flexible system.”

California voters approved using a tracking system run by Lakeland, Florida-based Franwell for its recreational cannabis market. Sales become legal Jan. 1.

Franwell also tracks marijuana, using bar-code and radio frequency identification labels on packaging and plants, in Colorado, Oregon, Maryland, Alaska and Michigan.

“The tracking system is the most important tool a state has,” said Michael Crabtree, who runs Denver-based Nationwide Compliance Specialists Inc., which helps tax collectors track elusive, cash-heavy industries like the marijuana business.

But the systems aren’t fool-proof. They rely on the users’ honesty, he said.

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“We have seen numerous examples of people ‘forgetting’ to tag plants,” Crabtree said. Colorado’s tracking also doesn’t apply to home-grown plants and many noncommercial marijuana caregivers.

In California, implementing a “fully operational, legal market” could take years, said state Sen. Mike McGuire, who represents the “Emerald Triangle” region that’s estimated to produce 60 percent of America’s marijuana. But he’s confident tracking will help.

“In the first 24 months, we’re going to have a good idea who is in the regulated market and who is in black market,” McGuire said.

Oregon was the first state to decriminalize personal possession, in 1973. It legalized medical marijuana in 1998, and recreational use in 2014.

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Before that, Anthony Taylor hid his large cannabis crop from aerial surveillance under a forest canopy east of Portland, and tended it when there was barely enough light to see.

“In those days, marijuana was REALLY illegal,” said Taylor, now a licensed marijuana processor and lobbyist. “If you got caught growing the amounts we were growing, you were going to go to prison for a number of years.”

Taylor believes it’s easier to grow illegally now because authorities lack the resources to sniff out every operation. And growers who sell outside the state can earn thousands of dollars per pound, he said.

Still, it’s hard to say if cannabis smuggling has gotten worse in Oregon, or how much of the marijuana leaving the state filters out from the legal side.

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Chris Gibson, executive director of the federally funded Oregon-Idaho High Intensity Drug Trafficking Area program, said the distinction matters less than the fact that marijuana continues to leave Oregon on planes, trains and automobiles, and through the mail.

“None is supposed to leave, so it’s an issue,” Gibson told The Associated Press. “That should be a primary concern to state leadership.”

“Marijuana has left Oregon for decades. What’s different is that now we have better mechanisms to try to control it.”

US Rep. Earl Blumenauer (D-OR)

On a recent morning, Billy Williams, the U.S. attorney in Oregon, sat at his desk in his office overlooking downtown Portland, a draft Oregon State Police report in front of him. Oregon produces between 132 tons (120 metric tons) and 900 tons (816 metric tons) more marijuana than what Oregonians can conceivably consume, the report said, using statistics from the legal industry and estimates of illicit grows. It identified Oregon as an “epicenter of cannabis production” and quoted an academic as saying three to five times the amount of cannabis that’s consumed in Oregon leaves the state.

Sessions himself cited the report in a July 24 letter to Oregon’s governor. In it, Sessions asked Brown to explain how Oregon would address the report’s “serious findings.”

Pete Gendron, a licensed marijuana grower who advised state regulators on compliance and enforcement, said the reports’ numbers are guesswork, and furthermore are outdated because they don’t take into account the marijuana now being sold in Oregon’s legal recreational market.

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A U.S. Justice Department task force recently said the Cole Memorandum , which restricts federal marijuana law enforcement in states where marijuana is legal, should be reevaluated to see if it should be changed.

The governors of Oregon, Colorado, Washington and Alaska — where both medical and recreational marijuana are legal — wrote to Sessions and Treasury Secretary Steve Mnuchin in April, warning altering the memorandum “would divert existing marijuana product into the black market and increase dangerous activity in both our states and our neighboring states.”

But less than a month later, Sessions wrote to congressional leaders criticizing the federal government’s hands-off approach to medical marijuana, and citing a Colorado case in which a medical marijuana licensee shipped cannabis out of state.

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In his letter, Sessions opposed an amendment by Oregon Democratic Rep. Earl Blumenauer and California Republican Rep. Dana Rohrabacher that prevents the Justice Department from interfering with states’ medical marijuana. Congress is weighing renewing the amendment for the next fiscal year.

In a phone interview from Washington, Blumenauer said the attorney general is “out of step” with most members of Congress, who have become more supportive “of ending the failed prohibition on marijuana.”

“Marijuana has left Oregon for decades,” Blumenauer said. “What’s different is that now we have better mechanisms to try to control it.”

Taylor believes cannabis smuggling will continue because of the profit incentive, which will end only if the drug is legalized across America. U.S. Sen. Cory Booker, a New Jersey Democrat, introduced a bill in Congress on Aug. 1 to do just that.


Thanks you for visiting FLMMCC.com, the premier Medical Marijuana Certification Center in Florida. Currently, there is a Medical Marijuana Initiative on the November 2016 Ballot to legalize High-THC Medical Marijuana in the State of Florida. The FLMMCC Florida State Licensed Doctors are ready to review your medical records for a “FREE Pre-Qualification”. This will be the first step in becoming a legal Florida Medical Marijuana patient when the law passes.

Alaska Sets Sales Record, Still Lags Behind Projections

Summer tourism appears to be giving a big boost to Alaska’s newly legal cannabis market. As after starting out at a snail’s pace, adult-use sales are catching on with locals and tourists alike—and finally bringing in tax revenue for the state.

According to data from the state Department of Revenue’s tax division, June was a record-breaking month in Alaska, with sales of 547 lbs. of cannabis flower reported across the state. That generated hundreds of thousands of dollars in tax revenue, with cultivators paying $512,000 in taxes.

In Alaska, growers—not retailers—remit taxes to the state, and in addition to the $50 per ounce tax on marijuana flower, they pay $15 per ounce of other plant parts purchased by manufacturers.

“It’s nice to see a new tax bringing in state revenue. That is exciting,” Kelly Mazzei, the state’s excise tax supervisor, told the Juneau Empire.

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Since the start of the 2017, Alaska has seen steady increases in the amount of flower—as well as trim and other cannabis products—moving through the market.

But while the state has set records month after month in terms of cannabis production and sales, the industry has fallen significantly behind its initial projections, which have already been reduced twice.

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From October—the first month of legal cannabis sales—through June, Alaska collected roughly $1.75 million in cannabis tax revenue—over a quarter of a million dollars less than the state’s projected.

Alaska officials currently estimate that during fiscal year 2018, the state will collect $10.6 million in taxes. To do so, reports to the Juneau Empire, the state would need to average about $883,000 per month in tax revenue.

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The slow pace of the industry rollout is the result of several factors, but the sluggish rollout and implementation of regulations is one of the main reasons. As a consequence, sales started four months late.


Thanks you for visiting FLMMCC.com, the premier Medical Marijuana Certification Center in Florida. Currently, there is a Medical Marijuana Initiative on the November 2016 Ballot to legalize High-THC Medical Marijuana in the State of Florida. The FLMMCC Florida State Licensed Doctors are ready to review your medical records for a “FREE Pre-Qualification”. This will be the first step in becoming a legal Florida Medical Marijuana patient when the law passes.

The Leafly Marketwatch: What Percentage of Your Dispensary Visitors are Out-of-State?

We usher in 2016 with the hope that a few states will join Washington, Colorado, Oregon, Alaska, and Washington, D.C. as newly minted members of the legal cannabis club. In the meantime, we took a closer look at the states that are currently operating legal retail cannabis dispensaries to see where exactly their visitors are coming from. What percentage of out-of-state folks is curious about what Colorado, Washington, and Oregon have to offer?

Colorado

We took a look at the last six months of data and broke out visits to Colorado dispensary pages by their state of origin, excluding Colorado so we could focus on out-of-state visitors.

Out-of-state traffic to Colorado dispensary pages on Leafly
Click on the image for a larger version

 

As you can see from the bar graph, the top two states sending traffic to Colorado’s dispensary listings on Leafly are Texas at nearly 33% and Florida at close to 11%. Interestingly, neither state has a legal recreational or medical marijuana market in place, although they did recently pass low-THC, high-CBD cannabis oil laws. Florida has selected growers for its program, but no cannabis oil has been dispensed yet. Texas, meanwhile, does not expect to be operational until 2017.

Why are two highly restrictive states so interested in Colorado? An obvious answer is tourism. Unlike Washington and Oregon, which are tucked away in the northwest corner of the United States, Colorado is ideally situated closer to the middle of the country, making it an ideal location to visit. And despite the Colorado tourism director insisting that cannabis is not a major tourism draw for the state, both a state survey and our data suggest there’s definitely growing interest in checking out Colorado’s legal cannabis market.

Colorado is also becoming a more attractive place to live for a myriad of reasons. A number of people from illegal states, dubbed “marijuana refugees,” have migrated to Colorado for legal access to cannabis that can help treat themselves or their family members suffering from diseases. Young college graduates are also flocking to Colorado, and the real estate market has increased by double-digits post-legalization thanks in some part to a population boom and the cannabis industry producing more jobs (which means more people can afford to buy homes). It’s possible that in addition to tourist interest, pro-cannabis or cannabis-curious people who are considering moving to Colorado may be checking out the state’s dispensary pages to see what the legal market has to offer.

Washington

As with Colorado’s data, we analyzed the last three months’ worth of visits to Washington dispensary pages.

Out-of-state traffic to Washington dispensary pages on Leafly
Click on the image for a larger version

 

Nearly 40% of out-of-state visits to Washington dispensary pages come from California, with Oregon taking 2nd place with just over 14%. Both states’ proximity to Washington makes the data largely unsurprising, as it’s a relatively easy road trip or flight away for a quick getaway.

Another possible explanation for California’s traffic numbers is that there’s been a recent influx of people relocating from California to Washington. Between 2004 and 2013, over 339,000 moved from the Golden State to the Evergreen State. Washington’s recent tech industry boom, comparatively cheaper cost of living, and yes, legal cannabis are certainly all perks to moving further north.

Oregon

Oregon’s traffic data looks like a reversal of Washington’s, with over 39% of out-of-state traffic coming from its northern neighbor and 30% originating from California.

Out-of-state traffic to Oregon dispensary pages on Leafly
Click on the image for a larger version

Again, tourism is a likely factor here since Oregon is sandwiched between Washington and California, making it an appealing destination for a quick cannabis-friendly weekend getaway.

Business Takeaways

Why should dispensary owners and managers care about which out-of-state visitors are coming to their dispensaries? From a business perspective, it’s always an advantage to know your customers and their background so you can cater a personalized experience and convert their interest into a sale. Consider the following tips to help your business seem especially appealing to an out-of-towner:

Educate and Inform.

Out-of-state customers may need a little more education about cannabis, so offer more dedicated customer service and guidance to make your visitors feel at ease. Remember, they’re not experts and may even feel a little intimidated surrounded by a roomful of products that are still illegal in their state, so make them feel comfortable and be available to answer any questions they have. You may even want to put together a pamphlet or binder that contains some basic Cannabis 101 information that may benefit your out-of-state clientele.

Personalize the Experience.

Make your business seem appealing to a diverse pool of tourists or visitors. For example, if you have a retail dispensary in Colorado and know that a lot of people from Texas are likely to frequent your business, consider going the extra mile and work on your Texas charm – talk barbecue, Texas sports teams, local fashion, or anything that might put a smile on your visitor’s face. Or you could offer a few vanity strains, such as Cali Kush to a California native or Blue Bayou for someone hailing from Louisiana.

Offer Out-of-State-Friendly Products.

Pre-rolls are great for visitors since they might not have traveled with a vaporizer or bong, and lower-THC strains or edibles are a good idea as well for any tourists that are new to cannabis and don’t want to feel overwhelmed. (Just make sure you explain proper edibles dosing to your customers!)

Embrace Cannabis Tourism.

Colorado seems to be having an identity crisis with its cannabis tourism and doesn’t want to be cemented as the place to go for legal green. But honestly, what’s so bad about embracing the tourism angle? Sure, Washington, Colorado, and Oregon have a lot more to offer than just legal retail cannabis, but if the appeal of it brings visitors across state lines, it’s a win-win for the local economy. There’s a saying that goes “A rising tide lifts all ships,” meaning retail cannabis attracting visitors from different states brings in not just cannabis tax income, but benefits hotels, restaurants, local attractions, etc. So why not put a smile on your face and greet your out-of-state visitors with outstretched arms and an open mind? They’re bringing you business, after all!

Check out our previous Marketwatch analyses, and learn more about how Leafly can help grow your cannabis business.

Grow your business with Leafly

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Thanks you for visiting FLMMCC.com, the premier Medical Marijuana Certification Center in Florida. Currently, there is a Medical Marijuana Initiative on the November 2016 Ballot to legalize High-THC Medical Marijuana in the State of Florida. The FLMMCC Florida State Licensed Doctors are ready to review your medical records for a “FREE Pre-Qualification”. This will be the first step in becoming a legal Florida Medical Marijuana patient when the law passes.