Many factors led to pot club closure

WASILLA — The co-owner of the Northern Heights hookah lounge now says state enforcement action and an untimely theft caused her to close her business for good late last summer.

Dottie Edward operated Northern Heights for about three months during summer 2015. The last two months were marred by frequent closings and re-openings as the business found itself on the wrong side of an enforcement order by the state Alcoholic Beverage Control board. In the fall it was also hit by a burglary. And, Edward said, state officials based the renewal of the liquor license for the bar upstairs on the closure of the downstairs marijuana business.

Some might view the closing of such a business — even one that does not sell marijuana — as inevitable in a state where licenses for marijuana businesses haven’t yet been issued. Edward disagrees.

“It wasn’t inevitable, because Potluck (Events) is open and running,” she said. “We weren’t shut down by the borough. We were shut down by (ABC board director) Cynthia Franklin and the fact that she sits on both boards.”

Franklin is a common target for criticism and hostility in cannabis business circles.

She did not return phone calls seeking comment, and via email directed questions about the issue to the minutes of the July 1, 2015 board meeting.

After the marijuana board met in August, cease-and-desist orders issued in June — before the marijuana board was seated — were suspended, allowing some businesses, like Potluck Events in Anchorage, to continue operations. Other businesses faced raids by Anchorage police in August.

According to Franklin’s letter, Northern Heights violated state law provisions prohibiting bottle clubs.

Northern Heights owners were waiting for a clear signal from their attorney or state officials when they discovered the club had been broken into on Oct. 27. About $6,500 worth of property and equipment disappeared.

“We were robbed,” she said. “We were wiped out. They took everything.”

Ultimately, it was the liquor license conditions that sealed the business’s fate, Edward said.

“They threatened his liquor license and we got shut down,” she said.

Harriet Dinegar, the legal counsel for the ABC board, said the board has broad legal authority to examine public safety conditions surrounding a renewal, including the presence of nearby businesses or operations that could pose a public safety issue. From the board’s perspective, whether or not Northern Heights actually sold marijuana was immaterial, Dinegar said.

“It’s not possible to make the distinction that one is legal and one is illegal,” she said. “In a crack house, no one is selling crack. People go there to use crack.”

The issue with the bar’s proximity to Northern Heights was a problem for the board, she said.

“I think the concern is, wherever you have places that sell alcohol and you have places that encourage marijuana use, you always have a danger that people are going to wander from one to the other,” she said.

Asked whether a gun store located in an identical situation would pose a similar problem, Dinegar demurred.

“I don’t know,” she said. “I don’t do gun laws.”

Dan Coffey, an attorney representing John Emmi, co-owner of MSR LLC and the Northshore Ale House, said the liquor license condition ultimately triggered the closure of the ale house and the expected sale of the property. Coffey argued that the “premises” portion of the law applied only to the upstairs Ale House, and not to the downstairs hookah lounge.

Northern Heights “was not on the licensed premises, so what happened was, we reached an agreement with the executive director that we would close the whole thing,” he said. “The business closed and the pot store downstairs closed.”

Coffey questioned why the state would target the landlord of a business, rather than the actions of the business owners.

“It’s the belief of the Attorney General’s Office and Ms. Franklin that these clubs are illegal, but rather than go after the club, the practice of the ABC board has been to go after the landlords,” he said.

For now, the closure has forced Edward to re-evaluate her future. She’s consulted an attorney and is evaluating legal action over the closure. The business’s Facebook page has received 117 likes since the official closure in August, and they’re hopeful that Houston, where voters rejected a proposed ban on retail marijuana businesses, could provide an outlet for future operations.

“We were trying to do something good,” she said. “I had hoped that it will be able really build it up and make that our career for all of us. We’re all kind of in limbo at this point.”

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