Retailers fear lost profits from cannabinoid ban

Posted: Sunday, March 20, 2011

JUNEAU — In a state where possession of a small amount of marijuana is decriminalized, Steve Stuber conducts a brisk business selling synthetic pot, mostly to oil workers who prefer the substance since it does not show up on drug tests.

Those sales appear to be on borrowed time, as reports of synthetic cannabinoids causing an array of ill health effects, including panic attacks and hallucinations, have led Alaska lawmakers to seek bans against the substances.

But retailers and drug policy reformers say the law will only cause the smokeable herb mixtures, which are marketed under names like K2 and Spice and purported to give a high like marijuana, to take a brief hiatus from store shelves. The ban would cost storeowners money, they say, but there are “work-arounds” available to those intent on legally selling the substances.

“It’s kind of like if you own a liquor store and you ban rum,” said Stuber, who owns Tobacco Express and Accessories near Soldotna. Stuber estimated that selling the 13 different varieties of the substances makes him about $15,000 a month, and he’s planning to open a second store next Wednesday in Wasilla.

If the ban is passed, as is likely considering its unanimously passage in the House and its progress in Senate committees, Stuber said he would be forced to sell the $24,000 worth of cannabinoid products in his store as fast as possible, and destroy the rest upon implementation of the ban. He also said he would have to lay off three employees.

This would not be the first ban Stuber has faced. Last November, the federal Drug Enforcement Administration gave notice of a national ban of some combinations of the drug, resulting in Stuber selling his supply off at cost.

Sarah Graves, co-owner of Mystik Treasures, an adult store a few blocks from the state Capitol in Juneau, said she disposed of about $3,000 of products when the DEA ban was announced. She has since replaced that with a similar product that is in compliance with the ban.

Many Alaska small businesses operate precariously, booming from sales to tourists during the summer and struggling during the winters when tourists are scarce.

Stuber, who also runs a fishing lodge, said he started selling cannabinoids to make ends meet when business slowed down at the lodge. Graves reported a similar drop in sales in Juneau during the winter, though cannabinoids generate only a small percentage of her shop’s profits.

Both of the bills prohibiting the products —one proposed in the House and another in the Senate— add 10 different chemicals used to make the substance to the state’s schedule of prohibited drugs. Neither bill offers any redress for the loss of revenue.

If passed, Alaska would join 18 other state in banning the drugs, which are currently unregulated under state law but banned by an ordinance in Anchorage.

“I’m concerned that people are ending up in the hospital or driving while on it,” said bill sponsor Rep. Cathy Mużoz, R-Juneau. “This is a serious material and needs to be classified.”

But the nebulous nature of the chemicals used to make the fake pot means that manufacturers have gotten around bans in almost every state, said Dan Francis, executive director of the Retail Compliance Association, a group representing smoke shops and adult stores.

“In all states that it has passed, manufacturers work around the law,” Francis said, usually by finding a similar but unclassified chemical to spray on the herbs.

In theory, the federal ban that came into effect earlier this month should have outlawed five of the chemicals and any chemicals that emulate the banned substance’s effects. But Francis said laws that ban similar chemicals are often challenged by defense attorneys as being too broad.

It remains to be seen whether Alaska’s ban will permanently remove all varieties of cannabinoids from store shelves, said Jerry Luckhaupt, assistant reviser of statutes, and if the bill’s passage fails to end sales of the substances, the legislature would have to pass another bill to address the substances left unregulated.

In the meantime, Sen. Kevin Meyer, R-Anchorage, sponsor of the Senate bill to ban the chemicals, said he hopes retailers would have adequate notice upon the bill’s passage to pull the substances off store shelves.

“We don’t want them to put on a half-price sale,” Meyer said. “The word (will be) out that retailers shouldn’t be buying more inventory and that it’s better to stop ordering.”

Both Stuber and Graves said they would probably hold a sale should the ban pass. Stuber added that, given the cannabinoid’s strong sales in his store, he would likely re-order the products should legal alternative be introduced.

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