State of Emergency Declared Over Pot Supply In Nevada

By Kelly Burch 07/12/17

The demand for Nevada's recently legalized weed is pushing the state to either change their policy or lose a ton of money.

Indoors marijuana growing, planting cannabis, holding it in a hand

Nevada declared a state of emergency last week for the most unexpected reason: weed dispensaries had run out of product.

“Without the retail sale of marijuana, the State will not realize the revenue on which the State budget relies,” Nevada Governor Brian Sandoval said in a statement. 

The declaration aims to address the issue over who can legally transport marijuana. 

Legalized recreational marijuana took effect in Nevada on July 1st, after voters in the state approved the measure last November. However, officials and consumers knew ahead of time that there may be a shortage because of a legal battle over who has the right to transport weed from growers to the dispensaries. 

“We’ve had to acquire a tremendous amount of product and store it at our facility before July 1 because we don’t know when this issue will be resolved,” Armen Yemenidjian, owner and CEO of Vegas-based Essence Cannabis Dispensary, told Vice

The initial measure to legalize weed said that for the first 18 months of legalized recreational marijuana, only licensed state liquor distributors could transport pot to dispensaries.

However, the state says that there was not enough interest from liquor distributors to meet demand. Because of that, the state is considering allowing other types of businesses to transport marijuana. That led the Independent Alcohol Distributors of Nevada, an industry group for liquor distributors, to sue, arguing that opening up applications violated the state’s original policy. In May, a judge blocked the state from opening up the application process.

Sandoval’s state of emergency would open up who can apply for the distribution licenses. 

“Unless the issue with distributor licensing is resolved quickly, the inability to deliver product to the retail stores will result in many of these employees losing their jobs and will cause this nascent industry to grind to a halt,” Sandoval said in the statement.

Sandoval also noted that the marijuana industry had invested “hundreds of millions of dollars,” and was not seeing a return on that investment while the stalemate over distribution continued. 

In addition, he pointed out that many people would return to buying weed illegally if they weren’t able to get it from dispensaries, undercutting the state’s revenue from the taxation of marijuana. 

“Without the ability to license marijuana distributors to continue the flow of product to the retail store, a high likelihood exists that consumers will revert to the black market,” he said. 

Despite Sandoval’s very public display in favor of opening up the weed supply in Nevada, the measure will not take effect until it is considered by the Nevada Tax Commission, which controls the licensing of marijuana distributors. That organization is expected to vote on the measure on Thursday, July 13, according to USA Today.

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Kelly Burch writes about addiction and mental health issues, particularly as they affect families. Follow her on TwitterFacebook, and LinkedIn.