Department of Taxation Looking into Recreational Marijuana Distr - KTVN Channel 2 - Reno Tahoe Sparks News, Weather, Video

Department of Taxation Looking into Recreational Marijuana Distributor Shortage

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Recreational marijuana retailers worrying about how to stock their shelves might have something to look forward to after today's Nevada Tax Commission meeting, but a solution will take time. 

Earlier this summer a Carson City judge told the Department of Taxation that they could only award marijuana distribution licenses to current alcohol distribution license holders. This was because the language of the ballot question said that they would be the first ones allowed into the marijuana distribution market. 

Since that ruling however recreational sales have begun and concerns for product have grown. While some of the Reno retailers were doing fine inventory wise, others were running low. 

To address the problem, some emergency regulations were requested to determine if the wholesale liquor distributors could adequately serve the marijuana distribution demand. The ballot question originally stated that "the Department of Taxation would only issue marijuana distributors' licenses to persons holding a Nevada wholesale liquor dealers' license, unless the Department determines an insufficient number of marijuana distributors would result from this limitation."

On Thursday in Carson City, emergency regulations were approved which means they'll begin collecting data to see if the liquor wholesalers are meeting the industry's demand. Officials tell us that this process will take time, potentially several months.

"That doesn't mean we're going to license anybody right away or we're not going to give license-to-liquor distributors," says Jim DeVold, Chairman, Nevada Tax Commission.

As of this time, there are only two licensed distributors in the state of Nevada. Five other applications are still being reviewed, all from licensed wholesale liquor dealers. 

They also decided to appeal the decision in Independent Alcohol Distributors of Nevada v. the Department of Taxation which limited the Department of Taxation from processing applications from anyone other than wholesale liquor dealers. That decision will move to the Nevada Supreme Court. 

This is a move DeVold says more administrative, than anything. 

"We're really just protecting our rights under that law with that appeal."

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