Nevada sold out of legal marijuana so quickly, the government used a ‘statement of emergency’ to bring in more weed


marijuana dispensary las vegas nevada
A
man shops for marijuana at The Source dispensary, on Saturday,
July 1, in Las Vegas.

John
Locher/AP


On July 1, Nevada locals and tourists visiting from out of state
waited hours in line in triple-digit temperatures to become the
first in the state to purchase legal recreational marijuana.

Less than two weeks later, the 47 retailers licensed to sell the
drug are running out of supply.

The Nevada Tax Commission, a subsidiary of the state Department
of Taxation, has passed a new regulation to address the shortage
in a unanimous vote.

The commission found that the current pool of stores licensed to
distribute marijuana is insufficient to support the market. It
will reopen applications and allow dispensaries previously
operating in the medical marijuana program to vie for a spot in
the recreational market.

The regulation come as a response to a
"statement of emergency" issued by the department
and
endorsed by Governor Brian Sandoval late last week.

The governor did not declare a "state of emergency," which is
typically used in times of natural disaster when local government
requires the help of state agencies. Rather, a statement of
emergency allows for swift changes in regulations during
temporary scenarios, said Mari St. Martin, communications
director of the Office of Governor Brian Sandoval, in a
statement.

Nearly 50 dispensaries in the Las Vegas area have licenses to
sell marijuana for recreational use. When sales got underway on
July 1, those retailers could sell their inventory to anyone over
the age of 21 with a valid ID. But those same stores cannot
legally restock their supply.

Alcohol wholesalers have the exclusive rights to move marijuana
from growers to retailers in Nevada, as part of a temporary court
order that
was extended in June
. The rule aims to "promote
the goal of regulating marijuana similar to alcohol
" — and
protect liquor stores from losing business as the demand for
recreational marijuana rises.

Nevada is the only state with legal marijuana that has such an
arrangement. The state intends to appeal the order, so that its
medical pot shops can obtain distribution licenses.


marijuana dispensary las vegas nevada
Recreational
marijuana became legal in Nevada on Saturday, July 1, as 12:01
a.m.

John
Locher/AP


On Thursday, purveyors of both alcohol and marijuana packed a
government building in Carson City, Nevada, where the Nevada Tax
Commission met to discuss the situation.

Deonne Contine, executive director of the state Department of
Taxation, warned regulators that a marijuana shortage could
create a budget shortfall
in Nevada. A 15% tax on the plant's
cultivation
generates revenue
that the state spends on public education.

The industry could bring the state more than $1.1 billion in tax
revenue over the next eight years,
according to a study by Las Vegas-based RCG Economics
.

Neal Gidvani, senior counsel with Greenspoon Marder's Cannabis
Law practice in Las Vegas, called the commission's decision "a
step in the right direction for the cannabis marketplace."

"It is imperative that all those involved with the industry work
together to ensure consumers have adequate access to the product
and can purchase marijuana in a safe environment," Gidvani said.

Regulators pried open a channel for distribution in the hours
before the commission meeting. The state
awarded its first distribution license
to Crooked Wine
Company, which has partnered with a medical marijuana logistics
company to transport recreational weed from farm to store.

There are approximately 70 licensed alcohol wholesalers in the
state, but only seven applied for marijuana distribution licenses
as of Thursday. Contine said the department has
issued two total licenses
to alcohol wholesalers, but the
other five submitted incomplete applications.

Several dispensaries
told state officials
they expected to run out of product
within the week.

The first four days of legal sales resulted in over 40,000 retail
transactions and
generated $3 million in sales
, according to the Taxation
Department and the Nevada Dispensary Association.

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