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Nevada OKs regulation to fix recreational marijuana shortage

15 July 2017

But representatives of several of the 47 retailers now licensed to sell recreationally testified before the tax panel Thursday their shelves are almost empty because there's no distribution mechanism that allows them to restock.

Regulators agreed to change its rules for issuing distribution licenses after a lack of applicants prevented dispensaries from restocking their shelves, rejecting a rule giving exclusive transport rights to wholesale alcohol distributors and opening up the application process to distributors already authorized to delivery medical marijuana.

The referendum passed a year ago by Nevada voters legalizing the drug for recreational use stipulated that for the first 18 months of sales only liquor wholesalers would be allowed to apply to distribute marijuana - a nod to the powerful alcohol industry, which is anxious about new competition from pot.

Kevin Benson, a lawyer for the Independent Alcohol Distributors of Nevada who won the injunction blocking enforcement of the original regulation, said the new emergency rule-making is vulnerable to similar legal challenges.

Nevada's potential marijuana drought has been resolved.

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The supply problem stems from competing interpretations of the state's pot law that dictates only existing alcohol wholesalers can be licensed as pot distributors for 18 months unless there is "insufficient interest" among them to do the job.

"There aren't enough alcohol distributors serving that market", Durrett said. The Department of Taxation said those wholesalers could start transporting marijuana immediately.

The state also awarded distribution licenses to one alcohol wholesaler in Reno and one in Las Vegas in mid-July.

As of Thursday, the same day the tax department was set to hear the emergency proposal it approved, at least two distributors were finally licensed, director Deonne Contine told The Los Angeles Times.

Tax Commission member Thom Sheets said the answer was clear to him when no distributors had been approved. — to distribute pot products in compliance with a court order.

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Nevada, which officially rolled out a recreational marijuana program on July 1, sold approximately $3 million in recreational products over the extended holiday weekend. "Crooked will have the license, but Blackbird will be in charge of the on-the-ground duties, according to Stephanie Klapstein, spokeswoman for the department".

Nevada's distribution woes are unique among states that have legalized the sale of recreational marijuana.

As of Friday, a state law said only liquor wholesalers can transport marijuana from grow houses to stores.

Republican Gov. Brian Sandoval, who didn't support the ballot measure, signed off on the emergency regulation this week.

They urged the commissioners to approve an emergency regulation backed by the governor to allow some pot retailers to serve as their own distributors if there aren't enough alcohol distributors to do the job.

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Nevada OKs regulation to fix recreational marijuana shortage