Nevada liquor wholesale distributors challenged marijuana licenses.
Nevada’s Department of Taxation expected the first recreational sales to begin July 1st, but alcohol distributors wanted to put a stop to that. A group of liquor wholesale distributors filed a temporary restraining order that prohibits Nevada’s Department of Taxation from distributing marijuana licenses.
Carson City District Judge James Wilson ruled in favor of the liquor wholesalers and granted the temporary restraining order. “The statute clearly gives a priority and exclusive license to alcohol distributors. In order to promote the goal of regulating marijuana similar to alcohol.” Wilson wrote in an opinion paper.
All hope is not completely lost.
The Nevada Department of Taxation still expects the July 1st sales of recreational marijuana to proceed. But they are not clear as to how the process will play out due to the judge’s ruling.
Why did the liquor wholesale distributors go through all the trouble?
The liquor wholesalers argued that they have first rights to distribute recreational marijuana. They also claim that medical dispensaries could not apply for recreational licensing because there wasn’t enough interest among liquor wholesalers. The wholesalers also claimed that the November ballot gave liquor wholesalers exclusive rights to marijuana distribution licenses for the first 18 months of sales. The ballot measure states that marijuana should be regulated in a manner that is similar to alcohol.
Are liquor wholesalers worried they can’t compete with the M.J. market?
Sam McMullen stated, “We just want our rightful place. We don’t want to slow this down inordinately.” McMullen is the attorney for the liquor wholesalers. He fought hard so that the Nevada Tax Department can only distribute marijuana licenses to liquor wholesalers. According to Judge Wilson, the liquor wholesalers demonstrated irreparable harm if the department proceeds to issue cannabis distribution licenses to existing marijuana establishments.
Stephanie Klapstein is a spokeswoman for the Nevada Tax Department. She said that, “We are still looking toward a July 1st launch of the program.” Klapstein also stated, “We expect a hearing on the matter to be scheduled for some time in the next couple of weeks.”
Why the big rush?
On January 1, 2017 recreational sale of marijuana became legal in Nevada. And on Jan. 1, 2018, the Nevada law requires permanent regulations for the sale of recreational weed to be in place. But the Nevada Legislator is expected to give final approval for the “quick start” program to allow existing dispensaries to sell recreation weed before that. The reason for the big early push is because the expected tax revenue from pot sales is expected to total $70 million over two years. That is a lot of money and alcohol wholesalers want exclusive rights to it.