weather icon Clear

Sandoval signs order that could end marijuana distribution fight

Updated July 7, 2017 - 7:34 pm

With recreational marijuana quickly leaving the shelves of Nevada dispensaries, Gov. Brian Sandoval on Friday signed emergency regulations that could keep sales going strong beyond the first week.

Some dispensaries have told the state that a legal fight over distribution rights could put them out of product “within the next several days,” according to a statement from the tax department. Such a loss of product could hurt an industry that did millions of dollars of business over the first 100 hours of retail sales.

“Based on reports of adult-use marijuana sales already far exceeding the industry’s expectations at the state’s 47 licensed retail marijuana stores, and the reality that many stores are running out of inventory, the Department must address the lack of distributors immediately,” the statement said.

The department stressed the need to make the determination soon to prevent Nevada’s entire retail marijuana market from coming to a stop.

“Unless the issue with distributor licensing is resolved quickly, the inability to deliver product to retail stores will result in many of these people losing their jobs and will bring this nascent market to a grinding halt,” the statement said.

Riana Durrett, executive director for the Nevada Dispensary Association, said roughly $3 million worth of recreational pot was sold during the first four days of sales, which began July 1. That will net the state about $1 million in taxes.

Andrew Jolley, CEO of the Source dispensary, said his store is averaging 700 to 900 customers a day. That’s three to four times as many customers his shop saw when it only sold medical marijuana, he said.

“We’ve been very happy with the sales,” Jolley said. “This is a very turbulent industry, and it’s very difficult to predict anything. It was hard to know exactly what to expect.”

Legal fight

The regulations must be approved by the Nevada Tax Commission, which will vote on the proposal Thursday.

If approved, the state could consider giving distribution licenses to entities other than licensed liquor wholesalers, such as operating marijuana companies or specialized marijuana distribution businesses.

Only alcohol wholesalers are qualified under the current regulations to transport marijuana from growing facilities to dispensaries. The state has been trying to license as many as seven liquor wholesalers, but the Nevada Department of Taxation said Friday none were ready to go.

Alcohol distributors have contended that the voter-approved ballot initiative that legalized marijuana gives them exclusive rights to distribute the drug. They sued when the state tried to give licenses to entities beyond liquor wholesalers.

A Carson City judge ruled last month in favor of the liquor wholesalers and forced the state to stop accepting applications from other businesses for distribution licenses. The tax department’s proposal could license other entities, such as operating marijuana companies or specialized marijuana distribution businesses.

Strong start

Las Vegas police reported no problems at dispensaries, despite crowds that sometimes stretched to several hundreds. The tax department, which regulates the new industry, sent out teams of inspectors to pot shops across the state on the first day of sales to make sure dispensaries were following the law, like checking every ID to make sure customers were at least 21 years old and not selling anyone more than the legal carry limit of one ounce of smokable flower.

“There were no issues,” tax department spokeswoman Klapstein said Friday.

The official tax dollars raked in by Nevada’s newest market won’t be known until September, when the Department of Taxation releases the first month of revenue data, Klapstein said. Dispensary owners in Las Vegas are leery to talk specific sales numbers.

In the first two days of sales, customers often waited for two or more hours to get their legal weed, in lines that stretched outside the dispensaries and into the 100-plus degree heat.

But as the holiday weekend passed, things tapered off. And dispensaries say its mellowed to a steady hum of customers.

“It was a lot of novelty purchasers, a lot of people who wanted to be part of history,” said Armen Yemenidjian, CEO of Essence dispensaries.

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

Don't miss the big stories. Like us on Facebook.
Politics Videos
Tomi Lahren Speaks at UNLV - VIDEO
Fox News contributor and UNLV alumna Tomi Lahren returned to campus Wednesday night for a speech, titled “Stay Triggered,” that drew an auditorium of supporters as well as a group of protesters outside. (James Schaeffer/Las Vegas Review-Journal)
Bernie Sanders released from Las Vegas hospital - VIDEO
Sen. Bernie Sanders, I-Vt., issues a statement after he was released from Desert Springs Hospital Medical Center on Friday, Oct. 4, 2019, after suffering a heart attack earlier in the week. (Bernie Sanders via Twitter)
Democratic presidential candidates speak on impeachment - VIDEO
Democratic presidential candidates attending the March for Our Lives/Giffords Gun Safety Forum in Las Vegas comment on possible impeachment proceedings. (Las Vegas Review-Journal)
Joe Biden Las Vegas Rally Highlights - Video
2020 presidential candidate, Joe Biden, came to Las Vegas to talk guns, climate change and the Ukranian-Trump scandal. Biden was interrupted by a protestor who sat amongst supporters at the rally and continued with his speech. (Angus Kelly & James Schaeffer / Las Vegas Review-Journal)
Joe Biden comments on Trump and his campaign efforts in Nevada - Video
After an impeachment inquiry was opened on Donald Trump, Joe Biden talks with Review-Journal politics reporter Rory Appleton about Trump and his campaign in Nevada. (Angus Kelly & James Schaeffer / Las Vegas Review-Journal)
Bernie Sanders Unveils Affordable Housing Plan - Video
Bernie Sanders sits down with the Las Vegas Review-Journal to talk about his new affordable housing plan he unveiled at Plumbers & Pipefitters.
Jim Marchant talks gun control and Dreamers - Video
Republican Candidate for District 4 Jim Marchant talks about gun control and immigration policies. (Las Vegas Review-Journal)
Hurricanes, Gender, and Science in the Press
Imagine if the mainstream media’s current hurricane-sized obsession with scientific accuracy applied to gender.
Cory Booker on college tuition and minimum wage
Cory Booker talks on the RJ Politics podcast about college debt, informing workers about their rights and livable wages.
Nevada Politics Today: Teacher raises - VIDEO
Jason Goudie, the chief financial officer for the Clark County School District, talks about teacher pay and raises. (Las Vegas Review-Journal)
Media's Double Standard On Incitement And Trump - Video
Over the weekend, an Elizabeth Warren-supporting socialist who opposed gun violence used a rifle to commit a mass murder in Dayton, Ohio. The media has downplayed that aspect of the tragedy.
Project Our Care Tour Kicks Off In Las Vegas
U.S. Rep. Dina Titus joined health care advocates and local residents as part of Protect Our Care’s nationwide bus tour kick off in Las Vegas on Monday, August 5, 2019. (Mat Luschek / Review-Journal)
Bernie Sanders talks about guns, response to El Paso shooting
Sen. Bernie Sanders spoke about his response and continued policy ideas about guns and gun control to the Review-Journal after a panel of other topics. (Rachel Aston/Las Vegas Review-Journal)
Pete Buttigieg On Gun Control And Climate Change - Video
Pete Buttigieg talks about his campaign for the 2020 election and how Nevada is a vision of what the future can be.
Beto O'Rourke speaks in Las Vegas
Presidential candidate Beto O'Rourke spoke to supporters at the East Las Vegas Community Center in Las Vegas, Thursday, Aug. 2, 2019. (Las Vegas Review-Journal)
More tainted marijuana found in Las Vegas

The Nevada Department of Taxation on Monday issued a health notice after batches of marijuana sold from four Las Vegas dispensaries were found to have fungus, bacteria and high levels of mold and yeast.

Nevada marijuana official placed on leave

A top Nevada marijuana official who has faced criticism over his conduct during the state’s cannabis licensing process was placed on administrative leave last week.