Rory Savatgy

Distribution Woes Cause Decline in Nevada Adult-Use Sales

Nevada dispensaries selling adult-use cannabis are struggling to meet demand, causing a 20 to 30 percent drop in sales since the program’s launch, according to Department of Taxation figures outlined by the Reno Gazette-Journal. Distribution problems continue to plague the market, which has led to product selections being reduced by more than half.

“These (retail marijuana) businesses are struggling without a robust distribution system,” wrote Deonne Contine, director of the Tax Department, in the report. “Cultivators and producers have product sitting for days waiting to be delivered to stores while the quality of the product degrades. Retailers do not have the products their customers desire, products that are legal and should be available to them.”

The dispensaries say they need at least nine to 11 deliveries per week, but they are waiting up to two weeks for new product deliveries. More than five dozen dispensaries and more than 12 alcohol distributors, who are tasked with delivering cannabis products, were surveyed for the report.

Just one distributor, Crooked Wine, is currently operating in the state with Blackbird Logistics Corporation doing all of the operations for the company. Blackbird is servicing 99 wholesalers and making 100 to 150 deliveries per day.

Chad Strand, Blackbird COO, said the company is delivering to “every dispensary in the state,” covering 10,000 miles in the few weeks it has been licensed to make cannabis deliveries.

The adult-use law approved by voters in November includes language that only permits alcohol distributors to distribute cannabis throughout the state. After dispensaries started running out of products, the Tax Department devised emergency rules that allowed cannabis companies to apply for distribution licenses, but that measure was challenged in court by the state’s liquor distributors.

The issue could be resolved today as Carson City District Court Judge James Russell will consider the case and could use the Tax Department report in his decision.

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