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Nevada Opens Up Recreational Cannabis Distribution Rights

“The capacity of only liquor wholesalers to serve the market seems lacking.”

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The Nevada Department of Taxation announced this week that they will allow businesses outside of the alcohol industry to apply for cannabis distribution licenses. Distribution rights have been a major issue with the state's rollout of legal weed, as alcohol distributors have been fighting for the right to be the sole distributors of cannabis.

The initial ballot measure that legalized cannabis in the Silver State gave alcohol distributors exclusive cannabis distribution rights for the first eighteen months of legalization. Earlier this year, state legislators allowed medical marijuana dispensaries to begin early sales of recreational weed, which prompted a legal battle with the alcohol industry, who demanded the exclusive rights promised by the ballot measure.

This week, Deonne Contine, executive director of the state taxation department, said in a telephone conference that there is now an inadequate number of liquor distributors expressing an interest in getting involved in cannabis distribution. Contine said that only nine alcohol distributors submitted cannabis applications to the tax department, four of which have been licensed already, with two more applications pending.

However, Nevada officials do not believe that these distributors will be able to provide enough product to service all 50 of the state's licensed retail stores, especially in light of the recent cannabis shortages that occurred after the state began early sales last month.

“The capacity of only liquor wholesalers to serve the market seems lacking,” Contine said. “I think the evidence is fairly clear today that this market needs to be opened up.”

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