The Columbian / Associated Press

Launch of Nevada’s recreational pot sales may hinge on court

CARSON CITY, Nev. — Nevada’s marijuana regulators are working furiously to launch recreational sales on July 1, a fast-approaching deadline that could hinge on a court deciding whether the powerful liquor industry should be guaranteed a piece of the pot pie before tourists and residents can light up.

Lawyers for the liquor industry, marijuana retailers and the state are facing a judge Monday to argue whether Nevada has the authority to issue marijuana distribution licenses to anyone besides alcohol distributors.

The state says it has the power to temporarily license some existing medical marijuana cultivators and retailers to serve as their own middlemen. It wants to get a head-start on collecting millions of dollars in tax revenue devoted to education before permanent rules are required by Jan. 1, 2018.

The liquor lobby sued, saying the state didn’t give it the first shot at distribution licenses as called for in the ballot measure approved by voters in November, the only legal pot state with that arrangement.

Carson City District Judge James Wilson blocked all licensing until the matter is resolved. He refused the state’s request last week to dismiss the lawsuit.

It’s not clear if Wilson will rule immediately after Monday’s hearing. But he told lawyers last week that it’s “an important issue that needs to be resolved quickly.”

In the meantime, state tax officials are doing everything they can to have the licenses ready to go as soon as they get the green light.

“We expect to issue licenses by July 1,” Department of Taxation spokeswoman Stephanie Klapstein told The Associated Press.

“We have a ‘war room’ in Vegas where our staff are working long hours to move the applications through the review process,” she said. “We, of course, won’t be issuing any distributor licenses to applicants that aren’t liquor wholesalers while the restraining order is in place.”

The law says alcohol distributors have exclusive rights to pot distribution licenses, unless the state determines there isn’t enough interest to meet anticipated demand.

The tax department said there was “insufficient interest” among the liquor lobby when it published the proposed regulations. It later said that determination would be made after all applications were processed.

Of the 93 applications for distribution licenses, five are from liquor wholesalers and 88 are from existing medical marijuana establishments, Klapstein said.

Kevin Benson, a lawyer representing the alcohol distributors, said the tax officials may be under the false impression that they need dozens of distributors for the maximum 132 recreational retail stores allowed in Nevada.

“The five (alcohol distributors) who applied could probably serve the whole state,” he said, estimating each serves an average of 200 alcohol retailers. “We don’t want this delayed. We just want it to be fair. Our feeling is we’d like to see this get started as soon as possible.”