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Nevada Officials to Consider Emergency Rule on Cannabis Distribution

LAS VEGAS (AP) — Nevada Gov. Brian Sandoval last week authorized state regulators to consider an emergency regulation that would allow officials to determine whether the state has enough marijuana distributors to keep its retail shops supplied.

Sandoval’s approval came this past Thursday, after dispensaries across the state reported higher than expected demand for marijuana since recreational sales of the drug became legal in Nevada on Saturday. The Nevada Tax Commission is expected to take up the regulations Thursday of this week.

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The measure voters approved in November legalizing the sales dictates that licensed alcohol wholesalers have the exclusive rights to cannabis distribution licenses for 18 months. But no alcohol wholesalers have completed the licensing process.

“We are now informed that many have only days or weeks of product to be sold.”

A judge’s order in an ongoing court fight between the state and the alcohol distributors does not allow cannabis dispensaries to transport marijuana from a cultivation facility to the store. Before recreational sales began last weekend, most dispensaries selling medical marijuana were authorized to serve as their own middleman.

About a week before sales began, Sandoval’s office had indicated he wouldn’t go for an emergency regulation for distribution. He reversed his stance after sales exceeded expectations.

“We previously were informed the dispensaries may have up to 60 day supplies of product,” Michael Willden, Sandoval’s chief of staff, said in an email. “We are now informed that many have only days or weeks of product to be sold.”

Nevada Cannabis Sales Exceed Stores’ Expectations

Those 21 and older with a valid ID can now buy up to an ounce of cannabis. The Nevada Department of Taxation has licensed 47 dispensaries to sell recreational marijuana.

The department on Thursday said the shops have recorded well over 40,000 retail transactions, and some of them sold more than double of what they had expected.

Carson City District Judge James Wilson last month ruled the regulation the commission adopted in May that could have opened distribution up to others was invalid.

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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 cannaibs business to ensure enough distributors would seek applications to meet the anticipated high demand.

“The department has not determined whether exclusively licensing liquor wholesalers as temporary marijuana distributors will result in an insufficient number of licenses,” Wilson wrote.

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