US (NV): Nevada to be dragged to court over MMJ licenses issuance

The growing discontent among companies that weren’t selected to receive one of the marijuana business licenses issued by the State of Nevada has grown to an extent of lawsuits being filed against the tax department.

A dozen companies have gone to court and want the state to be stopped from issuing more licenses until court decides whether the selection process was “capricious and violated the state constitution.”

A total of six lawsuits have been filed, all alleging that no one knows what criteria was used by the state when selecting the cannabis companies to grant a license and which applications to reject.

The hearings against the tax department largely stem from the second round of marijuana business licenses issued in December 2018.

The plaintiffs claim that the tax department arbitrarily selected 61 out of 462 applications for the expansion of the available businesses in the cannabis industry which is now approximately two years old in the state.

The 61 licenses were given for new laboratory, cultivation, manufacturing and dispensing facilities. The complainants also add that the process to award licenses worth millions of dollars in the cannabis industry ought to be transparent enough so that those who won know why they did and those who lost can believe that they lost fair and square.

The cases filed are set to start being heard in the course of this week. These cases come at a time when the state senate has passed a proposal to compel the tax department to release into the public domain cannabis taxpayer information that has up to now been regarded as confidential.

This proposal is now headed to Nevada’s Assembly for consideration. Once the proposal is enacted into law, the names of all the companies that applied for licenses, and all those that were selected would be released.

Gov. Steve Sisolak also agrees that something should be done about the grumbling against the licensing process, so he supports the measure making its way through the legislative process. The Governor came into office last year in November.

He has been calling for the creation of a regulatory body like the Nevada Casino and Gaming Board for the cannabis industry. To this end, he has set up an advisory panel to study and advise him about the best way to form a Cannabis Compliance Board.

The cannabis industry has been booming from 2017 when the first recreational sales were made. For example, recreational sales totaled $425 million in 2017, and this figure shot up to $884 million in the final six months of 2018.


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