Alaskan Cannabis Dispensaries Face Licensing Delays

It’s been four years since recreational marijuana was approved by voters in Alaska, and two years since the first marijuana businesses received their licenses. While the industry is still developing, many Alaskan cannabis dispensaries are frustrated that they are still facing long licensing delays.

Waiting on Licenses

There have been a lot of road bumps for Alaska’s regulated marketplace, and it’s becoming extremely costly for cultivators and retailers.  Many are waiting in limbo paying rent, insurance, and utility costs for a business that isn’t licensed to operate.

In August, there were upwards of 80 applicants waiting for their licenses to be approved by the state’s Alcohol and Marijuana Control Office. Initially applicants were promised that licenses would be issued after 90 days but this deadline has long passed for many Alaskan cannabis dispensaries.

One Alaskan marijuana cultivator, Dollynda Phelps, submitted her application back in March and has still not been granted a license six months later. She recently said, “I put in my application in March and I’m still waiting, and the whole time I’m paying rent and insurance on a building I’m not using. There are hundreds of us now, waiting.”

Understaffed Licensing Board

One of the biggest issues is that the Alcohol and Marijuana Control Office is understaffed and existing employees only have previous experience regulating alcohol, not cannabis. The amount of applications received led to severe backlog of paperwork that tends to be overly scrutinized. Even though a separate licensing board was created to specifically handle cannabis business applications, there have been very few new hires and the staff is virtually the same.

The Director of AMCO,  Erika McConnell, admits that the licensing wait time is real issue and recently released a report that noted some of the problems of the licensing process. She noted that many of the license examiners spend “an inordinate amount of time” trying to collect missing pieces of information from the applicant.

She went on to write that, “This can mean that an examiner and an applicant go back and forth on their application documents multiple times. Sometimes an applicant is resistant to the advice from the examiner, although the examiner is only trying to help the applicant be successful, as the examiners pay attention to what the board comments on in applications.”

Acquiring more qualified employees to lighten the load is AMCO’s primary goal moving forward. Proposition 2 outlined that a portion of the tax revenue collected from the cannabis industry was to be used to fund regulatory organizations.

Appropriated Tax Revenue 

So far, sales at Alaskan cannabis dispensaries have generated approximately $12.8 million in taxes however this money goes directly into a general fund. The Alaska State Legislature then appropriates the tax revenue to the individual departments, so not all of it makes it the main regulator, AMCO who is in charge of licensing and enforcement.

To compound the problem, enforcement agents have been issuing violations to Alaskan cannabis dispensaries and cultivators for regulations that they were never made aware of. Not only does this penalties for the infraction but it could jeopardize their business license when seeking a renewal.

The Marijuana Control Board convene on Oct. 16-17 in Kenai, Alaska to address some of the major problems facing regulators and business owners alike. Cannabis retailers seeking help to manage state compliance, should consider investing in IndicaOnline’s compliant point-of-sale system to simplify the reporting process. Speak to one of our expert consultants to learn more about our innovative cannabis software and how to integrate with Metrc.