Las Vegas Sun

September 19, 2019

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Regulator: Nevada cannabis licensing process not impacted by outings with applicants


Richard Vogel / AP

A top Nevada marijuana regulator said Thursday that outings with representatives of businesses seeking coveted cannabis retail licenses didn’t taint the state’s selection process.

Nevada Department of Taxation deputy executive director Jorge Pupo said he had lunches and dinners with some dispensary owners and representatives last summer, just weeks before the department began to sift through retail cannabis license applications.

Lawyers for a group of plaintiffs filed an injunction last month with hopes of bringing the state’s licensing process to a halt. Last year, the state approved about five-dozen conditional retail cannabis licenses out of a pool of 461.

Attorneys on Thursday zeroed in on a number of restaurant outings that Pupo had with high-powered local cannabis lawyer Amanda Connor and others who had ownership stakes in some dispensaries.

Attorney Ross Miller pointed to several meetings with Connor at Las Vegas restaurants that Pupo had on his work calendar in July, less than two months before a two-week window opened for applicants to submit their proposals.

Pupo said he didn’t recall all of the meetings, but added that Connor never asked him about changing anything to do with the selection process.

Pupo said he understood that Connor represented some companies seeking additional licenses, including Essence, Nevada Organic Remedies LLC (The Source) and Cheyenne Medical LLC (Thrive).

All three of the companies received scores high enough to be granted retail licenses in 2018.

Pupo said talking to those involved in the cannabis industry wasn’t abnormal.

“We were conducting business,” Pupo said. “Aside from the application process, the rest of the business doesn’t stop. You can’t stop talking to everyone.”

His lawyers said that any attempt to gain influence with Pupo would have been moot because he didn’t score any applications, a job that was done solely by contracted temporary workers.

Pupo also testified this week that he didn’t check over any scored applications once the process was over.

Attorney Theodore Parker, representing one of the plaintiffs, pressed Pupo on the optics of taking meetings with industry representatives who have personal financial interests so close to the application window.

“It’s something I’m going to have to back and think about,” Pupo said. “I’ll do some self-analysis.”

Attorneys from the defense — a number of lawyers for successful applicants joined the state’s legal team — brushed off any minor mistakes that may have been made by the scorers, referring to the “human element” involved when thousands of pages of documents are pored over during a legally mandated 90-day window.

While a minor mistake may have been made for or against any of the 127 entities that applied for licensure in September, defense lawyers argued that state law gave the department leeway to sort through and score applications as it saw fit.

“The Department of Taxation was given the power to develop procedures for the issuance of licenses, renewals, suspension and revocation,” said defense attorney Steve Shevorsky.

Some plaintiffs, however, say the application process was confusing and possibly unconstitutional. Some seek a do-over while others want financial damages.

At one point on Thursday, Clark County District Judge Elizabeth Gonzalez, who is presiding over the hearing and will ultimately offer a ruling, spent about 10 minutes asking Pupo questions of her own.

Gonzalez said at least four witnesses have yet to be called.

With Thursday’s proceeding marking the 10th day in court over the injunction, she said it’s likely there will be an additional three or four days to go, although additional dates will not be set until next week.

The sides are battling over a lot of money as, 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.

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