Recreational Sales of Marijuana in Nevada in Limbo Following Tuesday Ruling

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Recreational sales of marijuana in Nevada may not begin next month after all.

A judge added to the uncertainty Tuesday when he extended a temporary order preventing the state from issuing pot distribution licenses to existing medical marijuana dispensaries so they can begin recreational sales July 1.

Carson City District Judge James Wilson said in a 11-page ruling Tuesday that the ballot measure voters approved in November dictates that licensed alcohol wholesalers have the exclusive rights to pot distribution licenses for 18 months.

Wilson ruled the regulation the Nevada Tax Commission adopted in May that could have opened distribution up to others was invalid, and he granted a preliminary injunction scrapping the license application deadline that passed May 31.

He said the members of the Independent Alcohol Distributors of Nevada demonstrated they will suffer irreparable harm if he doesn’t block the state from licensing existing marijuana businesses as distributors.

It’s not clear if recreational sales still might begin next month.

It has been legal for adults to possess up to an ounce of marijuana in Nevada and consume it in private residences since the beginning of this year. But currently only medical dispensaries can sell it and only to people with medical cards.

Under the direction of Gov. Brian Sandoval, state tax officials have had a goal of launching an “early start” recreational program July 1 to get a jump on millions of dollars in tax revenue before a permanent regulatory system is required to be in place Jan. 1, 2018.

Taxation Department officials did not immediately respond to requests for comment after Wilson’s ruling, which effectively voided the existing regulations.

Wilson said the Tax Commission engaged in “ad-hoc rulemaking” outside the legal process when it made a preliminary determination earlier this year that the liquor industry didn’t have enough interest in entering the pot business to ensure enough distributors would seek applications to meet the anticipated high demand. The commission cited alcohol industry concerns that their federal liquor licenses could be jeopardized given pot possession is still illegal under federal law.

“‘The department has not determined whether exclusively licensing liquor wholesalers as temporary marijuana distributors will result in an insufficient number of licenses,” Wilson wrote. “The department is enjoined from issuing a retail marijuana distributor license to any person or entity other than wholesale alcohol distributors.”

Nevada Department of Taxation spokeswoman Stephanie Klapstein told The Associated Press earlier Tuesday the agency intended to issue at least some distribution licenses July 1 to any qualified liquor wholesaler. But she said they hadn’t confirmed yet that any of the five applicants from the industry were legally qualified. More than 80 existing marijuana businesses have applied for distribution licenses.

Klapstein said the department has asked for more details from three of the alcohol industry applicants who filed incomplete applications. “Under any scenario, if we have qualified liquor wholesalers who complete the application process, they will get licenses,” she said.

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Source: 420 Intel – United States

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