Proposed City Ordinance Would Squelch ‘Free Market’, Marijuana-business Owners Say

Mar 21, 2018

Owners of local marijuana businesses told the Fairbanks City Council Monday that the free market should decide how many retail pot shops the city should allow. The owners and other advocates told council members a proposed ordinance that would limit the number of shops and impose other regulations on the industry could stifle the economic benefits it’s generating.

The marijuana-business owners and their allies did everything but quote Adam Smith in explaining why they oppose the restrictions in the proposed ordinance.

“It’s a free market. It’s capitalism. It’s the American Dream,” says Mason Evans, one of several cannabis capitalists who turned out for Monday’s two-hour work session.

Evans says they all invested heavily in their businesses because they saw opportunity. He says the limit of 12 retail shops in the city that the ordinance would impose would be unfair to a handful of those whose applications are still pending – and to others who want to get into the business.

“You guys don’t need to pick winners or losers,” Evans said. “Limiting licenses will limit the growth of Fairbanks. You’re saying, ‘Alright, this number of people is all that’s going to be here.’ Y’know, what happens if Fairbanks booms?”

Councilman Jonathan Bagwill, who opposes the marijuana industry and supports the ordinance, says he doesn’t understand why the business owners don’t like the idea.

“From a business standpoint, I don’t even know if that makes sense to me,” Bagwill said. “If I had a business, I wouldn’t want there to be 140 businesses like mine in the same business. If I’m in a business, it’s to make money.”

But Dan Peters says that’s not how he and his fellow retailers see it.

“My business will benefit, either way,” Peters said. “I am good enough at my business to hold my own against any other business that comes along. So I’m not worried about other licenses and license caps.”

Vivian Stivers, a former councilmember who also opposes the industry, reminded the business owners that the ordinance would set the number of retail shops according to population. That would be about one shop per 3,000 people, just as alcohol licenses are allocated, she said, encouraging the council to hold to that.

“It’s been said since day one – the number that you have on your retail and other stores, like you saw, are set in the alcohol regulations,” Stivers said, “and I believe you’re on the right track. Those should be followed.”

Councilman Jerry Cleworth followed up on that point a few minutes later, when pressing Evans on why he and the others now don’t want to adhere to that.

“So, what’s happened here?” Cleworth said.

“What’s happened here is everybody, like I said, is sailing in uncharted waters,” Evans replied.

Evans and others say regulating marijuana like alcohol was just a starting point. They said they’re obviously different substances, so city officials should resist calls to place additional  restrictions on the marijuana industry that may turn out to be unnecessary.

The point was underlined in an exchange between Councilman David Pruhs and Ray Brazier, a local real estate agent who’s worked with the businesses and who says a shortage of qualifying commercial real estate in Fairbanks may settle the issue of how many retail shops the city can support.

“It’s certainly getting more and more difficult to find areas that meet all the restrictions, both the state and well as the borough ordinance setbacks,” Brazier said. “Whether we’ve reached full saturation – y’know I do think we’re approaching that.”

Mayor Jim Matherly has said he intends to set up additional meetings, including one with marijuana-industry opponents, before the council revisits the measure for final amendments and possible approval in its May 7 meeting.