The big names have been moving into Nevada at lightning speed. Curaleaf, Green Growth Brands, Green Thumb Industries and Acreage Holdings have all landed mega-deals with dispensary chains in the Silver State during the past year, and were on their way to overtaking its booming recreational industry.
But last month, the few locally-owned cannabis stores left were offered a glimmer of hope after a Las Vegas judge ruled to pump the breaks on issuing over 60 new dispensary licenses primarily to the major four North American companies. Clark County District Judge Elizabeth Gonzalez on Aug. 23 determined that the state’s cannabis regulating body — the Department of Taxation — acted beyond its legal authority while scoring over 460 applications for 61 new dispensary licenses last fall. In a 24-page injunction to temporarily stop the licenses from being issued, Gonzalez said the department’s illegal actions were “fatal to the application process.”
“The Department of Taxation acted beyond its scope of authority with it arbitrarily and capriciously replaced mandatory requirements for (legal marijuana),” the judge wrote.
Among violations, Gonzalez found the taxation department removed a necessary background check for some applicants, changed requirements for location and building codes, improperly trained temporary workers hired to score the applications and let personal relationships between department staff and business executives from the cannabis industry affect scoring.
The Silver State is one of just five recreational marijuana states to limit dispensary licenses, and recent sales of the licenses suggest each is worth at least $10 million, making such a purchase possible mostly for mega-corporations with millions in capital. Ballot Question 2, approved by Nevada voters in 2016, allows for about 130 total dispensaries to be open by the end of 2020, based on the state’s current population. That means only 64 new stores could be added to the 66 dispensaries already open statewide.