Las Vegas Sun

December 13, 2017

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Ban on home delivery for recreational pot surprises Nevada industry officials

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Christopher DeVargas

A customer receives a delivery of medical marijuana at her home July 12. Marijuana delivery drivers in Nevada may transport up to 10 ounces at a time. Essence is the only dispensary currently handling its own deliveries, though owners of others hope to offer the service.

When the Nevada Department of Taxation last month released a draft of permanent regulations to govern recreational marijuana starting Jan. 1, one item was noticeably missing for industry officials: Home delivery service.

Home delivery is currently allowed under temporary regulations through the state’s “early start” program, which launched July 1 when recreational sales started and runs until the end of the year. But when department officials met in late July they eliminated that service in the first and only draft of new regulations because of security concerns.

“We tried to come up with a structure that was fair to the businesses but also that protected public health and safety,” said Stephanie Klapstein, the Department of Taxation spokeswoman. “We considered the safety of anyone who would be involved, either directly or peripherally, in the delivery process.”

The regulation would stop about 20 of 60 dispensaries across Nevada — mostly in Las Vegas — currently offering home delivery of the plant for recreational use. Deliveries of medical marijuana would still be allowed under the drafted regulations.

Klapstein said the main reason for banning recreational home deliveries is no laws are in place requiring recreational customers to register their identity. That means possibility of fraud, robberies of drivers and other safety threats are higher, she said.

While the drafted regulations are not final, the department would need to see a more regulated delivery system for recreational buyers where customers would register their name and address with dispensaries — similar to how medical marijuana cardholders are registered with the state. Having personal information lowers the threat of pot delivery staff of being robbed, Klapstein said.

“For medical deliveries the patients have their medical cards, they’ve been through a check and they’re kind of safeguarded,” she said. “We’re trying to get to a place with recreational home deliveries where we can ensure the same safety.”

Tim Conder, founder and CEO of marijuana delivery company Blackbird, said the regulations caught the company by surprise and threatens to do away with “a very important part” of its business. The Reno company handles home delivery for 15 marijuana dispensaries across the state as well as wholesale distribution as an alcohol distributor license holder from cultivation and production facilities to dispensaries.

Removing legal home delivery for the vast majority of Nevada’s pot-buying customers could steer those wanting faster, more convenient service to revert back to black market sellers, Conder said. Those illegal delivery services operate through website and apps such as Craigslist, Facebook and Backpage.

Illegal marijuana dealers will always have the added convenience factor of mobility over the legal industry unless legalized home delivery is allowed, Conder said.

“It’s a matter of access for the customer, some will purchase from the business offering that service whether it’s legal or illegal” he said. “Hopefully we’ll be allowed to provide that legal access.”

Las Vegas law enforcement would seem to agree.

Lt. Sean Toman of Metro Police’s Narcotic Crimes Division, in an interview before regulations were announced, called legalized marijuana home delivery service “a big factor” in the department’s initiative to push black market delivery services out of the industry. Metro busted 28 illegal home delivery operations, run mostly by those with gang affiliations and lengthy criminal histories and serving about 1,000 to 1,200 total customers this year as of July 23, Toman said.

Allowing such legal services to operate destroys black market profit, essentially eliminating business in the illegal marijuana sector, he said.

“The more they’re allowed to go forward with legal delivery, the better chance we have at decreasing the illegal delivery services,” Toman said.

Dispensary owner Bob Groesbeck of Las Vegas-based Medizin also was caught off guard when the new regulations were released. Medizin planned to launch its recreational pot home delivery service before Jan. 1, he said.

Groesbeck remained confident the industry and its regulating body would reach an agreement for a recreational pot home delivery service that “satisfies the Department of Taxation’s concerns.”

“From our perspective there’s potential for revenue and hopefully we’ll get some regulations in place,” Groesbeck said. “This is all new for everyone, it’s a process and at the end of the day it takes time to get it right.”

The Department of Taxation will release an updated version of its regulations by the end of August before sending them to the Legislative Council Bureau, Klapstein said. Public input plays a role in determining regulations for the new industry, and Klapstein encouraged those interested in contributing to email [email protected] with comments.

Editor’s note: Brian Greenspun, the CEO, publisher and editor of the Las Vegas Sun, has an ownership interest in Essence Cannabis Dispensary.

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