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October 20, 2019

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After judge’s ruling, July 1 early start date for recreational marijuana in jeopardy

Updated Tuesday, June 20, 2017 | 4:25 p.m.

A Nevada judge granted a preliminary injunction today to liquor distributors for the state’s new recreational marijuana program to put a scheduled July 1 early start date for the new industry in jeopardy.

First Judicial District Judge James Wilson ordered the Nevada Department of Taxation not to license “any person or entity other than wholesale alcohol distributors,” and negated a May 31 deadline for filing applications, ruling in favor of the 12-member Independent Alcohol Distributors of Nevada.

The department, commissioned with regulating the new marijuana industry, previously stated that demand was not sufficient for the industry, and had opened up licensing to current distributors in Nevada’s medical marijuana industry.

“IADON has demonstrated that it will suffer irreparable harm if a preliminary injection does not issue,” Wilson’s ruling stated. “Acts that unreasonable interfere with a business or destroy its credit or profits, may do an irreparable injury.”

Wilson cited testimony from longtime liquor distributors Kurt Brown of Capital Beverages in Carson City and Allan Nassau of Red Rock Wines in Las Vegas as “credible,” adding that it was possible for liquor distributors to serve the entire state. Wilson also criticized the Department of Taxation for essentially ignoring requests earlier this year from the liquor wholesalers to get involved in the new industry.

Only five of 93 applications for recreational marijuana distribution licenses through Monday had come from alcohol distributors, according to taxation department spokeswoman Stephanie Klapstein.

Nassau referred requests for comment to alcohol distributors attorney Michael Hagemeyer, who did not immediately respond to requests for comment.

Leaders in Nevada’s marijuana industry called Tuesday’s ruling “disappointing” and expressed doubt that the new industry will begin on July 1.

“It’s enormously frustrating and disappointing because the amount of work and effort that has gone into preparing the industry for early start,” said Andrew Jolley of the Nevada Dispensary Association.

Nevada State Sen. Tick Segerblom, D-Las Vegas, who sponsored and pushed through several regulations for during the 2017 Nevada Legislature, concurred. He said “several possibilities” exist for both sides to come to an agreement on-time.

“My understanding is that no one really wanted to talk until now,” he said. “But there’s room for both sides to come to an agreement that would waive the injuction and allow us to start on time.”

“This hurts, but it doesn’t make it impossible,” Segerblom added.

He said that not starting on July 1 as scheduled would be “a disaster.”

“It’s never over till it’s over,” he said. “We’ve come so far and we’re so close. We just have to put our differences beside us and make sure this gets done.”

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