Following higher demand than expected and an absence of licensed cannabis distributors for the recreational market, Nevada declared a state of emergency in response to dangerously low supplies. Now, they’ve put emergency rules in an attempt to keep the recreational cannabis industry in the state afloat.
How Nevada arrived at the brink of a marijuana industry disaster is complicated. Part of the agreement made when the state legalized cannabis was that liquor distributors would have sole rights to transport cannabis products to dispensaries for the first 18 months of legalization. No liquor distributors had successfully navigated the licensing process until just after emergency rules were put in place on Thursday, which allows retailers to transport their own product from the source. There are still concerns whether or not businesses will be able to address the shortage fast enough and steadily enough to keep up with demand and stay open.
Under the expanded regulations, distributors who had been licensed to transport weed in the state’s medical marijuana market will be eligible to transport during the current emergency, though who will be approved and for how long remains unclear. Despite a judge’s ruling against allowing anyone but alcohol wholesalers to transport before the 18-month mark, the emergency rules will also allow dispensaries to act as their own middlemen, which a lawyer for alcohol wholesaler groups argues is still illegal, though they have not yet announced plans to appeal.
The state has also filed an appeal asking the Nevada Supreme Court to overturn Carson City Judge James Wilson’s ruling, which prohibits distribution licenses for anyone who isn’t an alcohol wholesaler. In summation, things are complicated: not enough alcohol wholesalers have been approved to provide cannabis to dispensaries whose shelves are clearing faster than expected, threatening the industry in its infancy.
Many are concerned that if businesses can’t get the products that they have a legal right to sell, they may be forced to close. If that were to come to pass, potentially thousands of jobs could be lost along with millions in state taxes, and there is concern that citizens could revert to the black market. This isn’t over by any means, but the state seems to be dits it’s best to support the legal industry, despite their Governor’s previous opposition to legalizing recreational cannabis in the state.
At least two liquor distributors were approved on the same day as the emergency rules, with more expected to follow, but according to Nevada Department of Taxation Executive Director Deonne Contine, who announced the approved licenses, at least one of the new licensees is “pretty stressed out about what he’s going to be asked to do.”