Las Vegas Sun

September 16, 2019

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Hearing over disputed marijuana licenses in Nevada set to resume

A judge will continue a hearing this week to decide whether Nevada should be blocked from granting dozens of retail marijuana licenses, after losing applicants complained that the scoring system used to determine the winners was biased and unconstitutional.

Clark County District Court Judge Elizabeth Gonzalez will hear testimony Monday and Tuesday over an injunction sought by a group of rejected applicants. The state received 462 applications for 61 conditional licenses, awarding those to 17 companies.

Plaintiffs in at least seven lawsuits complain that the selection process wasn’t transparent, that the state improperly used temporary workers to screen applicants and that bias led to the selection of winners and losers. Some say the process was unconstitutional.

The plaintiffs want the state to stop processing marijuana licenses issued in December, including 31 in Clark County, which is already home to 49 recreational marijuana businesses.

“I think the evidence is coming really good for us,” said Will Kemp, lead attorney for MM Development, the parent company of Planet 13, which was denied additional licenses. “I think it’s pretty clear that equal treatment was not given to all applicants.”

The state, however, says otherwise.

Steve Shevorski, Nevada’s attorney, said testimony from Department of Taxation officials in charge of licensing and the temporary workers hired to do the job will show that applications were fairly and honestly assessed and scored.

A spokesman for the Department of Taxation declined comment.

“In any competition, there will be disappointed participants,” a May 20 court filing by the state said. “A poor outcome for some is not a sound reason for replaying the game. This court should not re-examine the discretion the Legislature granted to the Department (of Taxation) to formulate an impartial scoring system.”

The 250-point system is based on six criteria — financial resources, impact on the community, building plans, care and safe-keeping of marijuana, taxes and financial contributions, and organizational structure, including the diversity of the company’s leadership.

Lawyers for a number of businesses awarded licenses in December, including Essence Cannabis and Thrive Cannabis Marketplace, have joined the state in opposing the injunction.

“Everybody’s got their own theory of what went wrong,” said David Koch, representing the corporate owner of The Source dispensary, which was approved for five coveted licenses.

Some plaintiffs want “to just blow the whole process up” and start again, said Koch, who called the challenges “completely inappropriate.”

Following an initial round of licensing before recreational sales launched in July 2017, the state last year announced it would accept applications for more than 60 additional licenses statewide.

From July through March, recreational and medical marijuana sales in Nevada totaled $464 million. For March alone, $59.7 million in marijuana sales were recorded, according to the state.

The Associated Press contributed to this report.


Sun publisher Brian Greenspun was part of owner of Essence, one of the defendants in this case.

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