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Liquor Industry Lawsuit May Sideline Nevada’s Cannabis Launch Date

Planning a Sin City vacation this summer to indulge gambling, entertainment, and the opening of Nevada’s cannabis market? You might want to pump the brakes. Nevada’s planned July 1 launch date could be in peril.

On Tuesday a district court judge prohibited the Department of Taxation from issuing cannabis distribution licenses under the adopted regulations—a development that could slow the scheduled rollout. The order comes in response to a complaint filed by the Independent Alcohol Distributors of Nevada, a group of liquor wholesalers.

The distributors argue that a provision in the legalization ballot initiative passed in November prevents regulators from granting distribution licenses to any entity besides licensed liquor wholesalers, at least for the first 18 months of sales.

Temporary regulations, adopted by the Nevada Tax Commission on May 8, gave the tax department discretion to issue licenses to companies outside of licensed liquor distributors, but the wholesalers took issue with that provision.

An attorney for the wholesalers, Sam McMullen, has acknowledged that the matter will likely delay the expected July 1 start for adult-use cannabis sales. But he emphasized that lawsuit wasn’t intended as a stalling tactic.

“We just want our rightful place,” he told the Review-Journal. “We don’t want to slow this down inordinately.”

In some states, such as Massachusetts and Arizona, the alcohol industry has fought actively against cannabis legalization, donating against legalization campaigns. But in Nevada the dynamic is much different. Beer and liquor businesses in the state—including distributors—donated $50,000 to the support the campaign in November—making it one of the only legalization measures last election season to receive significant donations from the alcohol industry.

Nevada’s legalization measure, Question 2, drew $12,500 from Morrey Distributing Co., $12,500 from the Nevada Beverage Co., $12,500 from Crown Beverages, $12,500 from Bonanza Beverage Co., and $12,500 from Capitol Beverages Inc.

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Gage Peake

Gage Peake is a former staff writer for Leafly, where he specialized in data journalism, sports, and breaking news coverage. He's a graduate of the University of Nebraska-Lincoln's College of Journalism and Mass Communications.

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