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Nevada’s Cannabis Dispensary Licensing Process Is Fair, According to State Audit

Despite lawsuits and allegations of corruption, a state audit has determined that the licensing process is “adequate.”

November 11, 2019

A state audit has determined that Nevada’s most recent cannabis dispensary licensing process is fair, despite the flurry of lawsuits and allegations of corruption that ensued following the state’s issuance of new licenses late last year.

“We concluded that this process, while not perfect, was adequate, and conditional licenses were granted to more qualified applicants,” Saranjeet Bains, executive branch auditor, told state officials during a Nov. 7 audit committee meeting, as reported by the Las Vegas Review-Journal.

The audit did, however, identify several areas that could be improved to increase transparency and trust as the state continues licensing dispensaries, according to the news outlet. In particular, Bains made the following three suggestions to improve the licensing process:

  • The state should hold public forums and designate a period of time for license applicants to ask the tax department questions about their applications before final submission;
  • The state should automate the scoring process instead of allowing state employees to manually enter scoring data in order to improve efficiency and reduce the risk of data entry errors;
  • And the tax department should collaborate with the state legislature to re-allocate licenses from jurisdictions that have banned cannabis sales within their borders, instead granting those licenses to cannabis-friendly jurisdictions.

Nevada awarded 61 additional adult-use cannabis dispensary licenses in December 2018. Several lawsuits were filed against the state by dozens of unsuccessful applicants, and many have criticized the process as flawed.

In August, after hearing evidence and testimony over the course of several weeks, a judge issued an injunction that barred the state from performing final inspections for certain licensees, which threatened to freeze the licensing process for those businesses.

In September, a group of cannabis companies that were denied licenses filed an amended lawsuit that alleged corruption in the Nevada Department of Taxation. Jorge Pupo, a Department of Taxation official who oversaw the state’s cannabis business application and licensing process, was placed on leave amid allegations of misconduct.