Pot-seeking tourists look to Nevada to keep supply flowing
July 13, 2017
CARSON CITY, Nev. — Tourists looking to buy newly legal pot in Las Vegas and other Nevada cities are counting on the state to make changes as overwhelming demand has started emptying shelves.
Regulators planned to vote Thursday on emergency rules that would speed up licensing for pot distributors, a sticking point that has launched a legal battle and is threatening the flow of supplies after dozens of retailers started selling recreational marijuana on July 1.
Nevada's law is unique among legal pot states, dictating that only alcohol wholesalers can transport the drug from growers to storefronts for the next 18 months.
Fewer than 10 alcohol wholesalers have applied for distribution licenses, and as of last week, none had met the qualifications, the state Department of Taxation said.
Many retailers were previously licensed to sell and distribute medical pot, so they started stockpiling supplies months ago in an anticipation of high demand for recreational marijuana.
Despite the preparations, some of the 47 licensed retailers have reported twice as much business as they anticipated, tax department spokeswoman Stephanie Klapstein said.
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"I have heard of some dispensaries running on fumes, if you will," Nevada Dispensary Association President Andrew Jolley said.
The Nevada Tax Commission was set to consider a new regulation to license some pot retailers to serve as their own distributors if there are not enough alcohol distributors to do the job.
The proposal would at least temporarily clear the way for sales amid a legal battle over distribution. The powerful alcohol lobby won a court order that allows only them to distribute pot.
The state is appealing to the Nevada Supreme Court but is trying to rewrite the voter-passed law to facilitate issuing distribution licenses to existing retailers.
The tax department last week declared the need for the emergency rules, which Gov. Brian Sandoval has endorsed. The move came after marijuana retailers recorded more than 40,000 transactions in the first weekend.
"Without the ability to license marijuana distributors to continue the flow of product to the retail store, a high likelihood exists that consumers will revert to the black market," Deonne Contine, executive director of the state's Department of Taxation wrote.
Unless the matter is resolved quickly, the distribution bottleneck will cost both the state and investors millions of dollars, thousands of jobs and "cause this nascent industry to grind to a halt," Contine said.
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