The logistics dispute between the state’s alcohol distributors and the Department of Taxation has threatened Nevada’s “early start” program, but legislators are confident the issue will be overcome and recreational sales will still begin next month.
According to the Reno Gazette-Journal, when Nevada voters legalized recreational marijuana in November, the ballot question stipulated that for the first 18 months, only licensed wholesale alcohol distributors could receive licenses to transport the product. In March, the Department of Taxation opened the application process up to medical marijuana businesses after reaching out to alcohol distributors in November and citing “insufficient interest” on their part to get involved in the industry.
The Reno Gazette-Journal goes on to say that a group of alcohol distributors have come forward, demanding to have exclusive rights to transport recreational marijuana for the first year and a half, as promised. Carson City District Judge James Wilson validated these concerns, and issued an order that prevents Nevada from issuing any recreational distribution licenses until the conflict is resolved, which created concerns that the state would not get recreational marijuana sales in July, as originally promised under their early start program.
The Las Vegas Review-Journal reports that in an emergency regulation signed by Governor Brian Sandoval on Thursday, marijuana dispensaries that have received temporary licenses will still be able to sell their existing inventory starting on July 1 so long as they meet certain packaging and label requirements. These regulations are expected to be adopted on Monday.
In an interview with Cannabis Business Times, Independent State Senator Patricia Farley said while the early start date is July 1, the mandatory start date is Jan. 1, 2018, and quite a bit of work has been done so that the early start program will roll right into the Jan. 1 start.
“We got all application processes and rules worked out so it will be bumps in the road, but not huge potholes,” she said.
Farley indicated that the program is coming along “extremely well,” despite the setbacks brought on by the dispute over who will get the first distribution licenses. She said now that Wilson has upheld the alcohol distributors’ side, officials are meeting with the tax department to see how to move ahead with licensing. According to Farley, 25 licenses were granted on Wednesday, and every current medical establishment will be applying and hopefully receiving licenses.
She said that some recent and notable updates to the legislation include not only the early start program that has created so much stir in the state, but also an added 10% excise tax on recreational marijuana and the tightened laws on packaging and marketing materials, including warnings for children.
Farley is also optimistic about the program because Nevada has other states to partner with to see what has worked and what has not in terms of regulating the industry, and she believes that having a gaming board to model the industry after is helpful in terms of public safety and expunging criminal records.
“The industry here has really worked to be professional,” she said. “I think it will be great for Nevada.”
Farley says cultivators are stocking up and trying to prepare for the market to explode on July 1 so they can keep up their production to meet demand.
Democratic State Senator Tick Segerblom shares Farley’s positive outlook on Nevada’s early start program. In an interview with CBT, he said, “The program is incredible. When you look at all the other states that have gone recreational, they have always taken longer than mandated by law, but we’re going into effect early, and medical was already in place—we are just combining the two.”
He said merging the existing medical program with a recreational program will allow for one coherent structure and taxation system, and calls the dispute between the alcohol distributors and the Department of Taxation a “slight problem.” He says until the alcohol distributors are given licenses, nothing can move forward ... and hopefully the two sides will end up working together.
“We have the best laws and best industry in the country,” he said. “We started from the beginning with a great medical program, and just need to transition into recreational.”
Morgan Fox, Senior Communications Manager for Marijuana Policy Project, also believes that the rollout of Nevada’s recreational program is progressing well.
“Despite Nevada’s medical program being delayed for many years, it was able to get off the ground very quickly and is now aiding in the establishment and implementation of [accepting applications and granting licenses],” she said. “The rollout seems to be going well, and is progressing faster than the other states that made marijuana legal this past November.”
Fox says that under the early start program, as applications are only being accepted from existing medical marijuana licensees, there have been more than 80 applications received from those various businesses.
“While it’s not practical to issue new licenses to distributors quickly enough to make [the July 1] date, the department has not announced any later date. Some MMJ businesses are planning to stock up before the early-start so they don’t run out of stock while they wait for distributors to be licensed.”
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