Some of the companies awarded Nevada retail marijuana licenses in 2018 could have their licenses frozen under a ruling issued Friday by a Clark County judge.
District Judge Elizabeth Gonzalez’s injunction stops the state from performing a final inspection for any licensees who did not provide the “identification of each prospective owner, officer and board member” as required by language included in a 2016 voter-approved referendum allowing the sale and use of recreational marijuana in the state.
In her ruling, Gonzalez wrote that the Nevada Department of Taxation acted outside of the law when it decided to perform background checks only on partners with an ownership stake greater than 5% on some license applications involving groups of owners.
Four applicants approved for licenses — Helping Hands Wellness Center, Lone Mountain Partners, Nevada Organic Remedies and Greenmart of Nevada — may have not completed background checks required by the original ballot question legalizing recreational marijuana.
Jared Khan, the lawyer representing Helping Hands Wellness Center, said the company was not concerned going forward, as the issue seemed to be a mix-up in regard to who is technically an officer of the company.
He noted that some companies on the plaintiffs’ side of the lawsuit may have problems under the injunction.
“I think the publicly traded companies will have a concern,” he said.
The state issued 61 of the coveted licenses in December out of 462 applicants. The losing bidders sued for an injunction, saying the Department of Taxation’s process in scoring applicants showed favoritism and included many mistakes.
All sides expect the ruling will be appealed to the state Supreme Court, with millions of dollars of sales, taxes and profits at stake in a booming retail pot market.
Gonzalez’s decision came after she heard 18 days of evidence and testimony over several