The proposed location for Happy Cannabis is just behind the Diamond C Cafe, largely out of view from Front Street. Formerly the six-room Thunderbird Hotel, the building is being renovated to accommodate a retail storefront, growing bays, processing and drying rooms.
At its Sept. 8 meeting, the Planning and Zoning Commission approved a new draft of the local code pertaining to zoning categories.
Specifically, changes were made which would update Title 20 to include reference to the legalization of cannabis, as well as when and where state permitted activities would and would not be allowed in the borough. An ordinance containing the updates will be headed to the Wrangell Borough Assembly for first reading at its next meeting.
The commission's proposal would be a major first step forward in allowing the cultivation and legal retail of marijuana on the island. Already the state Marijuana Control Board has begun issuing licenses for cultivating and testing the plant, and the first retail license was issued earlier this month to an Anchorage-area business.
Only one Wrangell resident has so far approached the city with a plan to apply for licenses. Kelsey Martinsen wants to open a grow and retail business near Front Street, located in the hotel just behind his Diamond C Restaurant. Shortly after the MCB began accepting applications for licensing, Martinsen and his wife Sarinee Nuamnui initiated submissions for retail, standard cultivation and concentrate manufacturing. In all the state MCB issues six different license types, which also includes product manufacturing, limited cultivation and testing.
Approval and final issuance of any license ultimately depends on a business plan's conforming to local ordinance and acceptance by the municipal government. In April Planning and Zoning concluded two of the three licensed activities Martinsen wanted would not be permissible under current ordinance, and over the next several months the commission has gone through the steps of reassessing its zoning definitions in light of the new law.
Under current zoning definitions, the commission concluded Martinsen's proposal for a retail store specializing in marijuana-related products would be allowable within commercial zones. Within the scope of state laws, the entrance to his proposed location falls beyond the 500-foot limit placed on such businesses from schools, parks, churches and other public places.
However, activities pertaining to the cultivation and processing permits he hoped to acquire for other aspects of the business would not be allowable under current zoning regulations. In discussing possible changes to the city's zones and how marijuana might fit into them, commissioners were unanimous in keeping any licensed activity out of single- and multi-family residential areas. Limited cultivation – up to 2,000 square feet, indoors and away from view – some processing, and testing would be permissible within commercial zones. More extensive cultivation would be allowable on larger rural and industrial zoned properties.
"It will work perfect for us," Martinsen commented on the proposed ordinance changes. His applications to the state have been kept on hold throughout the process, and will continue to do so until the Borough Assembly makes a decision in its coming meetings. A first reading of the draft ordinance is scheduled for its evening meeting on Sept. 27, at 7 p.m. If the proposal passes without any significant revisions, it will come up again for public hearing and second consideration at the Assembly's next meeting.
Martinsen said after that, should the changes be approved, he can move forward with his licensing applications, which itself will be an involved process. In addition to submitting a comprehensive operating plan, applications must meet a number of financial and registry requirements.
"We're excited for the day when we'll be open," said Martinsen.
Calling his proposed business "Happy Cannabis," he explained the storefront would be located in the former Thunderbird Hotel area, with its entrance back at the Kadin Building parking lot. In keeping with state regulations, he explained outside signage would be minimal and the store out of view from Front Street.
Visitors would have to show identification to an employee at the door before being able to browse inside. Under the state's legalization of marijuana, a person has to be 21 or older to purchase from or even enter a licensed business.
"They'll get greeted at the door and we'll check their I.D.," Martinsen said.
The renovated shop space is roughly 25 by 25 feet, and Martinsen said the counter space would include three points of sale. He hoped to employ three customer service and one security staff member for the store during the summertime peak, and Happy Cannabis would remain open throughout the year.
Items for sale would depend on availability through distributors.
A memo issued by the U.S. Deputy Attorney General in 2013 has made allowances for states such as Alaska to move forward with marijuana legalization. In a presentation to Wrangell last year, Alcohol and Marijuana Control Office director Cynthia Franklin explained the memorandum outlined eight problem areas where federal legal intervention may occur. Otherwise, the government has given its tacit consent for retailers and distributors to operate within state guidelines, including the transport of tracked and registered products.
Because of the uncertainty which persists around the industry and questions of legality for making shipments within the state, Martinsen has found it difficult finding licensed distributors willing to send products to Wrangell. However, he expected that would become less of a problem as distribution unrolls elsewhere in the state.
"As soon as everything is less new, things can iron out," he said.
An integral part of Happy Cannabis' business model is the cultivation of its own supply of pot.
"We'd always planned on doing the cultivation," Martinesen said. "We thought it would be a good business decision."
If the city allows, he would grow about 1,600 square feet of cannabis in enclosed bays, located at a separate part of the building. Different varieties of plant would be cultivated to produce steadily throughout the year. The regular harvest would undergo processing either in drying rooms to be sold as bud, or else an ice water extraction method to isolate the plants' oils in a concentrated form.
One of the zoning commission's concerns was the possibility of explosions caused by concentrate processing, a risk associated with certain extraction methods using industrial solvents. In its proposed ordinance, those methods would not be allowed within any of the revised zoning.
In all, Martinsen felt Planning and Zoning had been receptive during the ordinance revision process. Early on in the process, several members of the public had addressed the commission at meetings with concerns about allowing the sale of cannabis in Wrangell. For the most part, Martinsen said he has found people supportive of the idea, and though there are residents who disagree there hasn't been any bad blood about it.
"We were a little afraid of that," he said. "We understand. But they still come to the restaurant," he added.
A complete copy of the proposed ordinance change can be found on the city website, http://www.wrangell.com, under the Planning and Zoning Commission's board packet for September 8.
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