A Carson City Judge has allowed the Department of Taxation in Nevada to give distributor licenses to marijuana distributors. After reviewing the situation, Judge James Russell decided that the alcohol distributors were not able to handle all the deliveries and more help was needed. “It appears to the court that there is a need for additional distributors over and above the alcohol distributors,” Russell said in court.
The Initial Stages of Nevada Recreational Marijuana
Nevada voters chose to legalize recreational marijuana last November, becoming 1 of 8 states to have legalized recreational marijuana. Since then, the state has been anxious to begin recreational marijuana sales and contribute the potential wealth to Nevada’s economy. Unfortunately, a complication seems to be making that process a little more difficult than previously imagined. As part of the regulations outlined on the ballot, marijuana distribution to the various stores that will be selling the plant was delegated exclusively to alcohol distributors as long as they could keep up with demands.
The Emergency Ordinance
Earlier this year, Nevada’s Taxation Department decided there was not sufficient interest from the alcohol industry and opened up distribution to cannabis distributors. The state planned to begin marijuana sales on July 1 and wanted distribution in place in order to make this happen. An appeal from the alcohol industry prevented the Taxation Department from allowing cannabis distributors to deliver the plant to dispensaries and the alcohol industry was unprepared to take on the job on its own at that point in time. As a result, an emergency ordinance made it possible for dispensaries to act as their own distributors on a temporary basis. This was only able to last a short period of time as product soon ran out of stock.
Searching for a Solution to the Demand
Now dispensaries are reporting that there is a 1 to 2 week wait on deliveries which has sent sales plummeting 20 to 30 percent not to mention a 65 percent drop in product variety that could also contribute to the decrease in sales. There is currently only 1 alcohol distributor that is functional and that is Crooked Wine who have been able to operate because they teamed up with a medical marijuana distributor, Blackbird, who are actually handling the operations. This kind of decrease in sales is not just troubling for the financial ramifications. It also signifies that sales are being driven towards the black market again. Without a functional recreational marijuana industry in place, users have no choice other than to use the black market. For this reason especially, the Taxation Department sought out a way for marijuana distributors to pick up some of the work for the remaining 16 months where distribution was meant to be given exclusively to the alcohol companies.
The alcohol industry representatives were not happy at all with the decision made in court. The Judge stated that alcohol distributors are welcome to appeal his decision to lift the ban on marijuana distributors partaking in the industry. Until then, the industry is under duress and more distributors are needed to ensure that the deliveries are all being made.