Nevada’s Recreational Inventory ‘Emergency’ Is Ending

It took less than a week after recreational cannabis dispensaries in Nevada opened for business for an emergency to arise — but it wasn’t anything like the social perdition that anti-legalization doomsayers predicted. Instead, it was a crisis of supply: The state was running out of weed.

Thanks to restrictive regulations — the result of a power play by liquor distributors eager to get a cut of the multibillion-dollar action — Nevada’s 47 dispensaries began the recreational marijuana legalization era on July 1 with limited supply, and no way to re-up without receiving shipments from big booze shippers, none of whom have yet qualified for a recreational distribution license.

Nevada is the fifth state in the U.S. to allow adults 21 and over to buy cannabis for recreational purposes. Most of its dispensaries are in the Las Vegas area — a worldwide party destination and one of the most visited places in America. That its legal weed stores would be popular was a known known; the surprise was the speed with which dispensaries sold through their stock.

This lead Gov. Brian Sandoval (originally an opponent of legalization) to issue a “statement of emergency” just a few days after dispensaries opened for business on July 1.

The problem: All cannabis sold at recreational dispensaries in Nevada must be shipped there by a licensed distributor, and according to the language in Nevada’s successful legalization ballot measure, the only qualified companies happened to be liquor wholesalers.

Even with this monopoly on offer, too few interested parties stepped forward, so the state tried to give distribution licenses to marijuana companies. That led liquor interests to file a lawsuit, and that’s where things stood as Nevada’s adult-use marijuana industry began.

But as the Reno Gazette-Journal recently reported, the brief crisis is coming to an end: The state recently issued a pair of licenses to distribute recreational marijuana. Meanwhile, the state’s Tax Commission, which is in charge of the state’s cannabis industry, passed an emergency law that would allow for more distribution licenses.

Seven alcohol distributors and 87 marijuana companies have applied for a distribution license. The first two have been issued to a Las Vegas-area booze distributor called Rebel One and to an outfit called Crooked Wine Company, which is pairing with a Reno-based marijuana distributor called Blackbird.

Other states have toyed with the idea of mandated third-party distribution. In California, third-party distribution was mandatory under a medical-marijuana regulation bill signed by Gov. Jerry Brown in 2015, leading to allegations of a “Big Alcohol” takeover. This spring, subsequent amendments — pending final approval later this summer — have lifted that requirement.

TELL US, do you think liquor distributors should be involved in the legal cannabis industry?