Pubdate: Fri, 03 Jul 2015
Source: Alaska Dispatch News (AK)
Copyright: 2015 Alaska Dispatch Publishing
Contact:  http://www.adn.com/
Details: http://www.mapinc.org/media/18
Note: Anchorage Daily News until July '14
Author: Laurel Andrews

STATE TAKES AIM AT MARIJUANA SOCIAL CLUBS

Judging by the scene at Pot Luck Events on Wednesday night, one would 
never guess the state has advised the club to shut down.

Members had come to the downtown Anchorage marijuana social club to 
smoke, take dab hits and watch the "Chronic Comedy Show," while 
eating free candy provided at the nonalcoholic bar. "Bud of the week" 
samples -- provided by growers, not the club, owner Theresa Collins 
explained -- were displayed on a table in the back of the room.

Yet the club, which has been open since March, is one of six 
businesses that received cease-and-desist letters from Cynthia 
Franklin, director of the Alcoholic Beverage Control Board and the 
newly created Marijuana Control Board, in late June.

"From my perspective, there are no legal marijuana businesses," 
Franklin told the board during its first meeting Thursday.

Two of the letters went to marijuana delivery services -- Discreet 
Deliveries and Absolutely Chronic Delivery Co. -- and four were sent 
to social clubs: the Alaska Cannabis Club, Green Rush Events, 
Northern Heights and Pot Luck.

These social clubs have different models, although the basic premise 
is simple: People pay a membership fee to gain access to the space. 
They bring their own marijuana and, once inside, are free to smoke 
their own and share with others. Some clubs have free marijuana 
available; others don't.

By defining themselves as members-only clubs, the businesses say, 
their patrons are no longer in a public space and thus are not 
breaking the law against consuming marijuana in public. No marijuana 
is bought or sold, the clubs say.

But the state warns that continued activity could subject them to 
criminal and civil penalties.

Meanwhile, the Marijuana Control Board on Thursday considered how to 
address these social clubs as Alaska carves out new laws for 
legalized recreational and commercial marijuana.

'At a loss for words'

In Wasilla, Northern Heights, which calls itself a cannabis-friendly 
hookah bar, maintains it is being "wrongfully persecuted" for running 
a business where marijuana use is simply an option, manager Sarah Backlin said.

Northern Heights shut down Wednesday, not because of the 
cease-and-desist letter it received, but at the request of its 
landlord, MSR Inc.

The ABC Board had warned MSR its liquor license was in jeopardy 
unless Northern Heights closed, property manager Aubrey Okayama said. 
With Northshore Ale House upstairs, no marijuana is allowed on the 
premises, she was told, despite being a different business.

Backlin announced to a small group of disappointed members sitting 
outside the business Wednesday it would not be open that day. "I'm 
kind of at a loss for words," she said later.

Northern Heights rents out hookahs -- for marijuana or tobacco 
products -- which members use as they sit in the club's large 
first-floor room. The club's income comes from memberships, hookah 
rentals, tobacco products and a few snacks, Backlin said. They don't 
make much money yet, and employees have been working for tips, she said.

There's no free weed and the employees never handle marijuana, Backlin said.

The hookah bar was meeting a need in the community, owner Dee Edward 
said  a place where people who have nowhere else to smoke can go. 
"We're here to keep people legal, to keep people safe and 
responsible," she said.

After the ABC Board meeting Thursday, Edward said the business would 
be reopening over the weekend. Edward says the company will go to 
court, if necessary, to fight to stay open.

Backlin, who said she may want to apply for a license, worried she 
might not be able to. The Marijuana Control Board's proposed 
regulations on Thursday include a section saying business owners who 
are operating before licenses are in place would be barred from 
receiving a license once they become available.

Meanwhile, at Pot Luck Events on Wednesday night, about 40 people 
lounged on brown recliners as they passed around joints and pipes. 
Tourists from Ireland hovered around the dab bar, and the VIP area by 
the stage quickly filled with people.

For now, it's business as usual, Collins said. Still, she 
"absolutely" worries she will be shut down. "That's gonna be a worry 
for any business," Collins said.

Both Northern Heights and Pot Luck Events say they want the ABC Board 
to tour their businesses to dispel misconceptions and prove they are 
legitimate.

The equivalent of bottle clubs?

The cease-and-desist letters were sent out before the Marijuana 
Control Board had been appointed, Franklin said Thursday, to give 
clarification she said businesses had asked for: Are we legal or not?

In the cease-and-desist letters, Franklin writes that without a 
license, a marijuana club is operating illegally.

Consuming marijuana in public is illegal, the letter continues, and 
that "includes a business to which the public or a substantial 
portion of the public has access."

Franklin compared the social clubs to bottle clubs, which are 
prohibited under state law. Bottle clubs are places where alcohol is 
brought or kept and where people can go to drink. With the charge to 
"regulate marijuana like alcohol," the comparison applied, she argues.

Attorney and regular Alaska Dispatch News contributor Marcelle 
McDannel said she generally agreed with Franklin's interpretation. 
"Whenever there's a new law, you can't say anything definitive 
because the courts haven't weighed in on it yet," she noted.

However, McDannel said her sense was these businesses were 
"circumventing the general intent of the regulations and statutes."

Pot Luck Events attorney Lance Wells challenged the arguments laid 
out by Franklin. Pot Luck is "not in the marijuana business. They're 
in the event promoting business," Wells said.

The bottle club argument, Wells said, doesn't apply to marijuana. 
"There's been no statutes to come out on that at this time," Wells 
said. He contends the state can't just swap the word "alcohol" for 
"marijuana" without the Legislature changing state law.

Wells argued the club was not open to the public, and local vendors, 
not the club itself, were supplying free marijuana at Pot Luck. 
"You're not paying for marijuana," Wells said. "You're paying for 
membership to a private club."

Pot Luck Events doesn't have a marijuana business license, Wells 
continued, but it does have a business license, workers' compensation 
and insurance. "She has everything she needs to lawfully run a 
business in Alaska," Wells said.

Wells called these issues "uncharted seas" as the state moves forward 
with regulations.

No license type, and no power to add one

At its first meeting, the newly appointed Marijuana Control Board 
discussed the appropriate course of action on social clubs.

Franklin told the board, "while it might be tempting to let go of 
some stuff and not regulate that ... you're creating a very strong 
point of tension between regulated and unregulated business."

Bruce Schulte, a Marijuana Control Board member, spoke Wednesday in 
his role as a representative of the Coalition for Responsible 
Cannabis Legislation.

These businesses "might be a little bit ahead of their time," Schulte 
said. But he noted there "clearly is a need for them, or a market for them."

The complication? Social clubs are not included as a license type 
under Alaska's marijuana statutes. That means the Marijuana Control 
Board can't make regulations about that type of business, the board's 
general counsel, Harriet Milks, said. The Legislature must add that 
license type before the board can do anything.

So on Thursday, the Marijuana Control Board voted unanimously on a 
"wish list" asking the Legislature to address this issue and consider 
adding a social club license.

These social clubs will be able to bide their time, at least for a 
little while. Closing the meeting, Franklin told business owners no 
enforcement action would be taken - at least by her agency -- between 
now and the next Marijuana Control Board meeting in August.
- ---
MAP posted-by: Jay Bergstrom