Taxation moves forward on Nevada recreational pot licenses

CARSON CITY — Nevada Taxation Department officials deny they are trying an end run on a Carson City judge’s order saying only licensed alcohol purveyors can be issued marijuana distributor licenses.

Taxation spokeswoman Stephanie Klapstein said in a statement last week that the department will move forward with plans to issue licenses to recreational marijuana retailers, cultivators, product makers and testing labs.

“The injunction has no effect on the other license types and does not prevent the department from issuing those licenses,” according to Klapstein.

The statement says taxation will comply with the court order saying only alcohol distributors can be issued recreational pot distribution licenses. Under terms of the ballot question that legalized recreational pot in Nevada, only alcohol distributors can be licensed to move the product for the first 18 months the law is in effect.

However, the statement says, medical dispensaries that are issued retail licenses for recreational pot will be able to sell to the general public any inventory they have on-hand July 1 for medical customers.

“The stores can sell their inventory to either medical or adult-use customers because of legislation this session that changed the tax structure such that they do not have to designate their inventory as medical or adult-use until the point of sale to the customer,” according to Klapstein.

Medical marijuana dispensaries have the ability to move product from their suppliers to the store. That marijuana doesn’t have to be designated as medical or recreational until it is actually sold because, under the law, the only difference between the two products is the tax charged when it is sold. The recreational pot tax is much higher than the medical tax rate.

The emergency regulation before the Tax Commission on Monday, June 26, according to Taxation Director Deonne Contine, has nothing to do with those sales. It is to implement the law requiring strict packaging, labeling and advertising of marijuana products — in particular edibles. The law was passed to reduce the chances of children mistaking the edible products as candy. It also requires strict dosing and labeling of those products.

Klapstein said in the meantime, the department is moving ahead as quickly as possible to process applications by alcohol distributors for a distributor license.

“Once the applicants have submitted the materials to the department to make their applications complete and show they meet the qualifications, the department will issue distributor licenses to them,” Klapstein said.

Carson City District Judge James Wilson ruled Tuesday, June 20, the Nevada Taxation Department can’t issue recreational marijuana distribution licenses to anyone except licensed alcohol distributors.

He issued a preliminary injunction in the case filed by a small group of alcohol distributors who charged that taxation’s plan to issue licenses to medical marijuana establishments and others in addition to alcohol distributors was a clear violation of the initiative that legalized recreational marijuana in Nevada. That initiative says for the first 18 months after legalization, “the department shall issue licenses for marijuana distributors pursuant to this chapter only to persons holding a wholesale dealer’s license (for alcohol and liquor).”