Alaska Opens Its First Recreational Dispensary

"High noon" is what the operators of Herbal Outfitters called their grand opening at midday October 29 in Valdez, Alaska. The historic event made Herbal Outfitters the first retail marijuana store to open in Alaska since residents voted to legalize recreational use two years ago.

When you hear the name Valdez, you might picture Juan Valdez and his horse showing up uninvited first thing in the morning with a steaming cup of Colombian coffee. Or you might remember the name from the 1989 Exxon Valdez oil spill, caused by an alcohol-saturated captain sleeping one off as his third mate ran the Exxon Valdez oil tanker into a reef. But if you’ve ever been to Valdez, Alaska, you know that it’s a small port town located in south central Alaska, surrounded by snowcapped mountains, with a population of a little over 4,000 people and now the state's first marijuana store.

Herbal Outfitters sits in a gray cement building with white trim, the same building that housed Valdez's first bank. On the window is Herbal Outfitters' logo: a set of moose antlers above a marijuana leaf. Moose are everywhere in Alaska. Anyone who's lived here long enough has probably been chased by one or two, so it makes sense that one would be on the logo.

Derek Morris, manager of Herbal Outfitters, says that in the first few days of operating, they served over 1,000 people and that customers drove from all over the state to see them. "Some people drove eight hours," he adds.

Morris used to be the regional manager for a group of dispensaries in the Denver area. Although a lot of Alaska’s regulations were benchmarked to what Colorado has been doing for years, he says the State of Alaska has been easier to work with overall. And in Valdez, there’s "zero percent sales tax to the consumer," he notes, compared to the 26 percent tax he worked with in Denver.

The journey to legalization and the first marijuana retail store in the state was a long one. Alaskans voted to legalize medical marijuana in 1998. However, no provisions for medical dispensaries were included, and the state never established a dispensary system.

In November 2014, Alaska joined a small group of states that finally legalized marijuana for recreational use. Unlike the others, however, Alaska didn't have any of the pre-established infrastructure or regulations that medical marijuana dispensaries provide; states with already established dispensary systems experienced an easier transition when they added the recreational market. Without that framework, Alaska and its entrepreneurs have spent the last two years trying to figure out how to regulate and operate a brand-new industry.

According to Morris, the licensing process for Herbal Outfitters was smooth but time-consuming; the past several months have been spent attending board meetings and waiting for decisions to be made by Alaska’s Marijuana Control Board. Store zoning has been an issue for other efforts, since state law bans the sale of marijuana within ten miles of any city or borough where it is illegal and prohibits marijuana businesses from being located near schools or areas designated for minors.

Before its grand opening, Herbal Outfitters was inspected by Alaska’s Marijuana Control Board. Among other things, the inspector confirmed that the building had one entrance and exit, that its security-camera footage would be kept for forty days, and that its full-time staff of four had undergone background checks and had been trained and permitted to handle marijuana.

One of the last hurdles in the way of retail stores was the licensing of testing facilities. The State of Alaska requires that marijuana flower, concentrate and edibles are tested for their percentages of THC and CBD, and for microbials including salmonella, aspergillus and E. coli. Concentrates are also tested for any residual solvents, and edibles are tested to make sure they do not exceed the 6 mg per serving limit. Alaska's first marijuana testing laboratory, CannTest, began operating on October 24. Herbal Outfitters wasted no time, opening its doors just five days later.

Morris and his team had to fight to set up their business, and the fight isn't over. Two Valdez residents have circulated a petition to ban all retail sales, testing, manufacturing and cultivation of marijuana in the city and surrounding areas. The petition received enough signatures and will be on the May 2017 municipal ballot. If it passes, Herbal Outfitters will have ninety days to shut its doors.

That wouldn't make marijuana suddenly illegal in Valdez, though; it would just mean that the city's residents have taken advantage of the “local option" and decided not to participate in the marijuana industry that the greater state of Alaska allows. If that were to happen, businesses like Herbal Outfitters would no longer be allowed to operate, but residents would still be free to smoke and grow their own marijuana.

Morris says he isn't too worried about the proposition: Valdez residents voted in favor of legalization by a ratio of two to one. "We're optimistic we will have the same result," he says.