Nevada’s marijuana sales back on again

Recreational retailers will receive licenses amid suit

RENO, Nev. - Nevada regulators reaffirmed their intentions Friday to issue licenses necessary for retailers to begin selling pot for recreational use on July 1 while complying with a court order in a lawsuit filed by alcohol wholesalers who want a piece of the pot distribution business.

The retail licensees could include as many as 25 medical dispensaries in the Las Vegas area and four others in Reno that already have medical retail licenses, as long as they adhere to packaging requirements in an emergency regulation to be adopted Monday, state Department of Taxation spokeswoman Stephanie Klapstein said.

The fate of the recreational program has been in limbo since a Carson City judge ruled Tuesday that the ballot measure voters approved requires that alcohol wholesalers have exclusive rights to pot distribution licenses for 18 months.

Distribution licenses allow pot to be moved between locations and are different than retail licenses.

The state had wanted the option of licensing existing medical marijuana businesses to serve as distributors when recreational sales begin.

But District Judge James Wilson issued a temporary injunction barring distribution licenses for anyone except alcohol wholesalers.

Klapstein said Friday that won’t hold up licensing of marijuana establishments.

“The injunction has no effect on the other license types,” she said.

Kevin Benson, a lawyer for the Independent Alcohol Distributors of Nevada, did not immediately respond to requests for comment. The group filed the lawsuit considered by Wilson aimed at blocking any pot distribution licenses outside the liquor industry.

Klapstein emphasized Friday that no decisions have been made on granting recreational pot licenses to the dispensaries in Reno and Las Vegas.

“That said, those that applied, meet the qualifications and whose applications we get processed before July 1, will be licensed by July 1,” she said.

However, retail sales could be shortlived unless the state issues distribution licenses necessary to move additional products from growers to retailers.

“Once that inventory runs out, without distributors, they are not going to be able to restock,” Klapstein said.

The on-again, off-again plan to launch recreational sales has medical marijuana outlets scrambling to stockpile enough pot to meet what’s expected to be extremely high demand.

“It’s been a little chaotic,” said Clint Cates, director of compliance for the operators of the Mynt Cannabis Dispensary in Reno, which sells medical marijuana.

The operators also transport medical pot products between about 25 pot facilities statewide. Unlike recreational pot movement, transporting medical marijuana does not require a distribution license.

Cates said he’s confident some alcohol wholesalers will get pot distribution licenses in the coming weeks while existing stockpiles at dispensaries are sold to recreational customers.

“Our phones have been blowing up with calls from all the dispensaries that we currently serve down in Las Vegas who are trying to stock up on inventory,” Cates said. “We have been backstocking for four to six months, so we have extra inventory on hand.”

Department of Taxation Director Deonne Contine issued an emergency statement Thursday explaining the need to implement before July 1 new marijuana restrictions the Legislature approved last month.

The new provisions — which the Nevada Tax Commission is expected to approve on Monday — would mandate child-proof packaging with warning labels and prohibit the sale of products that appeal to children such as lollipops and gummies.

They also make clear that edible products sold for recreational use can’t carry as high a percentage of THC as allowed in items used for medicinal purposes.

Mike Willden, chief of staff for Gov. Brian Sandoval, said the governor doesn’t intend to propose an emergency regulation allowing anyone other than alcohol wholesalers to serve as pot distributors.

“It’s more important to him to have tight packaging and labeling and tight security and tight controls than to just have an artificial July 1 date,” Willden said.