Houston sets zoning rules for marijuana

HOUSTON — Even as some parts of the Mat-Su Borough consider bans on commercial marijuana, the area’s lone local government to fully endorse legalized pot passed its first rules regulating the emerging industry on Thursday.

On-site consumption is already one of the permitted uses in Houston, though council members on Thursday tweaked that section of the zoning regulations after a question-and-answer session with Alcohol and Marijuana Control Office (AMCO) director Cynthia Franklin. The amended law now says on-site commercial consumption is permitted only at retail marijuana establishments, and then only if Alaska allows on-site consumption when statewide rules are finalized.

The council voted 4-2 to pass the legislation. Council members Gina Jorgensen and Chris Johnson voted against, while Jim Johansen, Paul Stout, Kathleen Barney and Virgie Thompson voted in favor.

Among the regulations adopted Thursday night:

• Marijuana stores, product manufacturing facilities, testing facilities and cultivation facilities would be allowed on the city’s roughly 20 commercial properties, most clustered near the intersection of the Parks Highway and the Big Lake Road.

• Stores, testing, and cultivation facilities would also be allowed in the city’s Parks Highway-zoned districts, a corridor of properties stretching roughly from the intersection of Delroy Road and the Parks to the intersection of about Heath Drive and the Parks Highway, with sections extending west and east along the banks of the Little Susitna River and a small section extending along the Armstrong Road corridor near city hall.

•The city’s six heavy industrial properties could host product manufacturing, marijuana testing and marijuana cultivation under the adopted rules.

• Residential areas, marijuana cultivation — defined by state law to be cultivation facilities less than 500 square feet — could exist as an accessory use in both residential districts, which would include numerous subdivisions in the King Arthur Drive neighborhood, and residential-agriculture lots, which include less than 10 lots, one off Hawk Lane and the other along Armstrong Road.

A vote to delay until April for another public hearing and for the attendance of absent deputy mayor Lance Wilson ended in a tie. Johnson proposed the delay and cast the lone dissenting vote against the zoning regulations.

“We’ve counted our eggs before the chickens have even had a chance to be hatched,” he said. “And I really hope this doesn’t come back and bite us.”

Johnson argued there was no rush to get the rules in place so quickly.

“There’s nothing that says we have to be first,” he said.

Officials also offered a picture of the economics driving Houston officials’ pot push.

The state budget crisis is pushing state legislators to weigh axing the state’s revenue sharing provisions, a funding boon to smaller municipalities like Houston, where city officials furloughed employees last year in order to keep revenues and expenditures in line. Further reductions in state money could force more furloughs, mayor Virgie Thompson said.

Councilman Jim Johansen said the need for new revenues is clear.

“One lady had mentioned about instead of doing this we should focus on parks and trails and all this other stuff and we could get money for that,” said councilman Jim Johansen. “No we can’t. I would be shocked as hell if we got any money for our road requests for our capital projects.”

Without state money, the picture becomes increasingly bleak, Johansen said, and could eventually lead to de-incorporation. With Wasilla and Palmer already having outlawed commercial marijuana — and other parts of the borough considering a ban — Houston is in position to reap the benefits.

“Until we have the revenue and the funding, yeah, we’re going to be behind the power curve with that,” he said. “But based on what Colorado is doing, I think we’re going to do pretty well, particularly because Houston is the only one jumping on this bandwagon with both feet.”

Franklin focused her presentation on possible areas of conflict between the Houston ordinances and potential state law, as well as concerns about banking and finance. During her remarks, Franklin also discussed what the state envisions a retail operation looking like.

“When you go in that store, you’re not going to be able to walk around and pick up marijuana,” she said.

Instead, products would be displayed in a restricted area, and customers would order strains or products, and receive them over the counter.

“You need to think of it more as an old-fashioned general store, where way back in the day you would go up to the guy and say ‘Yeah, I’ll take some of that, I’ll take some of that, I’ll take some of that,’ and he would get it from behind the counter for you,” she said.

Board members continue to work on regulations for on-site consumption.

Officials also introduced a pair of ordinances Thursday evening that would set a licensing requirement for marijuana businesses and lay out how the city would protest marijuana licenses issued by the state. The Public Works Department would be responsible for determining possible violations. Thompson proposed that ordinance.

Another ordinance by Wilson sets the excise tax for the flowering and bud portion of the plant at $10 per ounce and taxes the rest of the plant at $2 per ounce. It also sets up penalties for business operators who fail to pay their tax on time.

Both ordinances are slated for a public hearing April 14.

Contact reporter Brian O’Connor at 352-2270, brian.oconnor@frontiersman.com, or on Twitter @reporterbriano.

CORRECTION: This story has been altered from a previous version, which misstated the council's vote on the zoning ordinance.