Lawsuit Exposes Nevada's Sketchy Cannabis Licensing Practices – Leafly

Nevada stepped into the adult-use cannabis era with the best of intentions. The state set up its regulatory system and licensing process with a promise of level playing fields, honest application scoring, and full transparency.

Strange scoring, chummy meals, and goalpost movement. What’s going on in Nevada?

Things haven’t worked out exactly as planned. Evidence presented in an ongoing lawsuit has raised a number of questions about scoring procedures, equity fairness, and the possible role of undue influence in the awarding of the state’s extremely lucrative retail cannabis licenses.

Recent rulings in that lawsuit have left the state’s cannabis industry in a mild state of confusion, as nobody’s sure who exactly has legal permission to open new stores this autumn, and who does not.

$10 Million Licenses at Stake

The Silver State is one of just five adult-use cannabis states to limit dispensary licenses. Ballot Question 2, the adult-use legalization measure approved by Nevada voters in 2016, allows for about 130 retail cannabis stores to open by the end of 2020, based on the state’s current population.

There are already 66 stores open statewide. That means the state could legally issue up to 64 more store licenses through the end of next year. Local officials in 12 of Nevada’s 16 counties, though, have prohibited cannabis retail stores. (All 12 counties are sparsely populated rural areas.) So realistically, there are about 42 new retail licenses up for grabs between now and the end of 2020.

The recent sale of existing licenses suggest each is worth at least $10 million. That’s due in part to an imbalance in the market.

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