Nan Palmero

Nevada Court Rules Against Liquor Wholesalers in Cannabis Distribution Case

A Nevada District Court judge has denied a preliminary injunction sought by liquor distributors to prevent the state Tax Department from licensing cannabis businesses to distribute recreational products from cultivators and manufacturers to retailers, the Las Vegas Review-Journal reports. Carson City District Judge James Todd Russell ruled that alcohol wholesalers were unable to satisfy the demand for deliveries; however the liquor distributors do have the right to appeal to the tax commission, he said.

Russell also determined that the Tax Department could move forward with plans for emergency regulations to license cannabis businesses to distribute products. Dispensaries selling adult-use cannabis have seen a 20 percent to 30 percent drop in sales since the launch of recreational sales due to distribution problems.

Attorney Kevin Benson, who represents the Independent Alcohol Distributors of Nevada, indicated he would appeal to the Tax Commission and has “already requested a stay” from the Tax Department, who oversees the state’s adult-use cannabis industry. He argued that if cannabis businesses are granted distribution licenses before a stay is approved, the exclusivity provided to liquor wholesalers under the voter-approved adult-use cannabis measure would be moot.

Senior Deputy Attorney Michelle Briggs said that of the 61 liquor distributors in the state, just seven applied to distribute cannabis, likely due to the risk of losing their federal alcohol licenses by working with the cannabis industry. Two medical cannabis companies have applied for alcohol distribution licenses which would allow them to distribute cannabis products under the law.

The Tax Department has not commented on how they would move forward on the licensing issue.

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