Nevada recreational marijuana industry clears state hurdles

An early start to recreational marijuana sales in Nevada cleared the final state hurdle Monday, paving the way for the program to roll out in under two months.

The Nevada Tax Commission adopted temporary regulations proposed by the Department of Taxation that will allow the state to issue recreational marijuana licenses by July 1. Most of the regulations were copied from the state’s medical marijuana program.

Tax department director Deonne Contine stressed the urgency in getting the regulations adopted so the state can meet Gov. Brian Sandoval’s proposed budget request, which includes $70 million from recreational marijuana taxes over two years.

“If we don’t adopt the regulations, we will not have a temporary program. If we don’t have a temporary program, we will not have the revenue that’s included in the governor’s budget,” Contine said.

For the marijuana industry, Monday’s decision means lifeblood.

“Its great for the state. It’s great for the industry. I think its great for everybody,” said Armen Yemenidjian, owner of Essence Cannabis dispensaries. “This is a display in how Nevada gets things done.”

The state’s stamp of approval shifts the focus to local governments.

Marijuana companies need both a state and local license to operate.

Clark County is scheduled to begin licensing by July 1, and officials for the cities of Las Vegas and North Las Vegas said Monday both municipalities plan to do the same.

Henderson could be the outlier, however. The city council implemented a 6-month moratorium on any marijuana licenses in February, meaning recreational sales by the five dispensaries in the city cannot happen until at least August.

Potential snag

Not everyone was happy with the regulations adopted Monday, and a group that wants exclusive rights on transporting recreational pot from growing facility to retail shops could cause a snag in rolling out the early start.

Sam McMullen, representing the Independent Alcohol Distributors of Nevada, said the ballot measure voters approved in November gave currently licensed liquor distributors an 18-month monopoly on marijuana distribution licenses.

Contine said “we fundamentally disagree with what Mr. McMullen has said.”

The department will accept applications from liquor distributors, medical marijuana companies and medical marijuana distributors. Contine said they decided to open the applications beyond liquor distributors because of the potential conflict with federal licenses.

Liquor distributors are licensed federally. And like banks or casinos, choosing to participate in a market that is federally illegal could jeopardize that license, Contine said.

McMullen said his clients are aware of the risk, and added that “they’re totally willing to apply.”

When the issue first arose in March, McMullen told the tax department his clients were considering taking legal action to protect their exclusivity on the distribution licenses.

When reached by phone Monday, McMullen said his clients were considering their options and that he would meet with them within the next day or two.

Jamie Munks contributed to this report.

Contact Colton Lochhead at clochhead@reviewjournal.com or 702-383-4638. Follow @ColtonLochhead on Twitter.