The public comment period closed for the first two sets of commercial marijuana regulations today.
Kenai’s Alaska Green Resources Founder Dolly Phelps said a huge concern is that regulations will require high startup costs, ultimately making legal marijuana sales unsustainable.
Phelps: “So when you start adding up all these fees, and all these expenses, you’re going to lose the ability to have a good conversion rate. Meaning, if the expenses are so great, the business owner to stay afloat and make any kind of a living will have to raise the price of the product at final sale which black market is going to be considerably less. In order for us to get the black market[sales] into the legal market, the expenses are going to have to be in such a way that they don’t prohibit that conversion.”
Just a few of the costs proposed for full retail and cultivation by the draft regulations thus far are a $5,000 license fee, a $1,000 non-refundable application fee, video surveillance which costs between $5,000 to $25,000, and $2,000 for a system to store 40 days worth of video surveillance data.
Phelps said the proposed tax codes have also limited what can be marijuana business tax write-offs.
She said this is the biggest factor in whether the State’s commercial marijuana industry succeeds or fails.
The third set of regulations will be introduced to the Marijuana Control Board in Anchorage on Monday, August 10.
At that meeting the board will also summarize the public comments received on the first sets of regulations.