Nevada Opens Cannabis Distribution To Non-Liquor Wholesalers

Ron Strider;3587415 said:

It's not just THAT cannabis becomes legal, just as important is HOW we regulate marijuana once it is legal.

Until this week, the only companies in Nevada that could distribute marijuana to dispensaries were liquor companies.

The proliferation of liquor distributors dates back to the last days of prohibition, when it was believed a three-tiered system would be best for taxes and for consumers where producers can only sell to distributors, whom in turn can only sell to retailers. An antiquated system from a less efficient time, much like car dealerships.

Regardless, Nevada found itself in a situation where they were allowing only liquor distributors to distribute marijuana as well. Officials had previously tried to open distribution to marijuana dispensaries, but liquor wholesalers argued that that violated state law. A Carson City judge sided with the wholesalers, saying the state needed to establish a process for determining the proper number of distributors for the market.

But then came the great marijuana shortage of 2017, where Nevada even went so far as to declare a state of emergency when the pot supply ran low. The situation, Nevada regulators argued, showed that more distributors were needed to prevent a shortage in supply that may lead people back to the black market. With the backing of Gov. Brian Sandoval, the state tax commission approved an emergency regulation last month intended to meet the judge's concerns.

Nevada marijuana regulators have decided to start issuing pot distribution licenses to businesses other than liquor wholesalers to keep up with overwhelming demand since legal recreational sales began July 1.

The Nevada Department of Taxation voted Thursday to open up the market previously limited to liquor distributors under the state ballot measure voters approved in November. They will begin reviewing about 80 applications they received in May from other businesses, department spokeswoman Stephanie Klapstein said. At three-hour public meeting this past Thursday in Henderson, several people spoke in favor of an "expanded pool" of recreational marijuana distributors.

"I think the evidence is fairly clear today that this market needs to be opened up," said Deonne Contine, executive director of the tax department. "The capacity of only liquor wholesalers to serve the market seems lacking."

The department declared the need for the emergency rules shortly after marijuana retailers recorded more than 40,000 transactions in the first weekend of legal sales. Some of the dispensaries that previously sold pot for medical use said they saw their sales increase 10-fold.

This example may set a trend for other states to follow. Thanks for dropping the ball, liquor wholesalers.

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