Last month we brought you news about an early start to adult use marijuana retail sales slated to begin on July 1st in Nevada. Under the plan, established medical marijuana dispensaries were to apply for licenses to sell cannabis to anyone over the age of 21.
Now it looks like those plans will be put on hold after a judge issued a temporary restraining order that prohibits the state’s Department of Taxation from enforcing an application deadline for dispensaries wishing to participate in the program. This comes after the Independent Alcohol Distributors of Nevada argued that the Nevada marijuana legalization measure gave liquor wholesalers exclusive rights to adult use marijuana distribution licenses for the first 18 months of sales.
“The statute clearly gives a priority and exclusive license to alcohol distributors, in order to promote the goal of regulating marijuana similar to alcohol,” the judge said in the ruling.
According to the Nevada tax department, they put out the word to liquor distributors to see if anyone was interested in the marijuana distribution licenses; they say not a single distributor even submitted a business plan until very recently. That’s why they opened up the application process, lest they not have anyone able to actually deliver the marijuana from growers when the time came.
To be fair, you can’t blame the liquor distributors for wanting exclusive rights for the 18 month span – that’s a pretty sweet gig with no competition. But why wait so long to express interest? It’s been 8 months since Question 2 passed in Nevada, that’s plenty of time to let authorities know you want to participate in the activity you claim that measure passing gave you the rights to.
For their part, dispensary owners say the exclusive distribution rights scheme will end up making the entire supply chain longer and more difficult than it needs to be. Companies that have growing and retail centers on the same property would have to use a liquor middleman to deliver cannabis from one room to another in the same building.
Treating cannabis like alcohol means to treat them similar in a legal sense. It doesn’t mean that the alcohol industry has to be literally involved in the legal marijuana industry. If that were the case, why not sell cannabis at liquor stores? Or staple dime bags to 6-packs of Bud Light?
The legal cannabis industry is already fighting an uphill battle in many ways; making things even more difficult for no reason makes no sense.
Legislators in favor of propelling Nevada’s marijuana industry will have most of their wishes fulfilled if Gov. Brian Sandoval keeps a commitment to sign at least one of four remaining pot bills sitting on his desk.
The bills approved by the Legislature before Monday night’s deadline:
• Senate Bill 487 would mandate a 10 percent excise tax on recreational marijuana sales for the state’s rainy day fund.
• Senate Bill 344 would require childproof, opaque-colored packaging for edibles and restrict THC content per package.
• Assembly Bill 422 would reduce the costs of medical marijuana cards from $75-$100 to $50.
• Assembly Bill 259 would allow those convicted of past marijuana-related crimes involving an equal or lesser amount of what’s now legal to have that crime vacated from their criminal records.
They await the governor’s approval before a June 15 deadline. Sandoval said Monday he would “absolutely be signing” SB487, but he’s still deciding on SB344. “That’s a bill I’m still reading,” Sandoval said of SB344. “I want to look closely through it.” He did not comment on AB422 or AB259.
The proposed bills would join four other bills signed into law from this session to provide a framework for Nevada’s new recreational marijuana industry, while preserving the state’s medical marijuana program.
Ballot Question 2, passed last November, legalized possession and use of up to one ounce of recreational marijuana flower for adults age 21 and older, or up to one ounce of marijuana concentrates, like wax, shatter and carbon dioxide oil. But the ballot question called on the Legislature and the Nevada Department of Taxation to further define the industry.
The Nevada Department of Taxation, which will regulate the industry, approved provisions for an “early start” program to begin on July 1 to allow current medical marijuana facilities in good standing to obtain temporary recreational licenses before the recreational program’s scheduled start date of Jan. 1.
The four bills already signed by Sandoval represent an achievement for state Sen. Tick Segerblom, D-Las Vegas. The longtime marijuana advocate said Tuesday it was his “best session as a legislator.”
“We’re very proud of what we accomplished,” Segerblom said. “We ended up where we wanted it to be.”
The list of signed bills includes:
• Marijuana rights for tribes. Senate Bill 375 allows the governor’s office to negotiate with tribal governments within Nevada on the use and sale of medical marijuana. It cites the 2013 Cole Memorandum and 2014 Wilkinson Memorandum, which suggest the U.S. Department of Justice should not devote law enforcement resources to crack down on those complying with marijuana laws within their state.
• Disclosure on parolees involved in medical weed. Senate Bill 277, unanimously passed through the Senate and Assembly, requires the Division of Public and Behavioral Health to disclose information on medical marijuana patients to the Division of Parole and Probation if a cardholder or applicant is on parole or probation. Previous laws require the Division of Public and Behavioral Health to keep that information confidential. But, unlike other marijuana laws at this year’s Legislature, SB277 won’t go into effect until Oct. 1.
• No urine test for marijuana DUI suspects. Passed with 34 of 42 votes in the Assembly and unanimously in the Senate, Assembly Bill 135 erases a limit set on the amount of marijuana that can legally be found in the urine of a driver suspected to be impaired. Instead, the amount of marijuana in a driver suspected to be impaired can now only be measured through a blood test.
• More leniency for hemp research. The heavily amended Senate Bill 396, first introduced in March as a bill to regulate massage parlors that use medical marijuana topical products, was instead passed to allow growth and research of low THC-level marijuana and industrial hemp. While existing law allows universities to grow and research industrial hemp, Sen. Pat Spearman’s bill allows plants with a THC percentage of less than 0.3 to be more widely grown and researched.
Marijuana advocates had some setbacks this session. Among bills to not make the final cut:
• Apprenticeship programs. Senate Bill 416 would have allowed medical marijuana facilities — dispensaries, cultivation facilities and testing labs — to apply for and carry out state apprenticeship programs. Sandoval vetoed the bill on May 30, citing the risk of losing federal funds for the state internship program because the plant is still federally illegal. The Senate chose not to take further action after Sandoval’s veto.
• More qualifying medical conditions, protection for licensing board members and green light for weed massages. Segerblom’s wide-ranging Senate Bill 374 would have added opioid addiction to the list of qualifying medical conditions for Nevadans to obtain a medical marijuana card. It also prevented professional licensing boards from firing or disciplining a board-licensed employee who uses medical marijuana, and allowed health care and massage therapists to legally use products containing weed on their clients’ skin. Sandoval vetoed the bill on May 31, and the Senate did not take further action.
• Marijuana lounges. Senate Bill 236 would have allowed businesses to obtain permits for marijuana use and open the door for pot consumption in some public places where it is outlawed. The bill passed through Senate and Assembly committees but missed a May 26 deadline to move forward.
• Weed funds for child welfare, alcohol abuse and health programs. Senate Bill 379 would have designated revenue from Nevada’s medical marijuana program for agencies that provide child welfare services for alcohol and drug abuse and behavioral health programs. That bill also passed through the Senate last month but never made it out of Assembly committee before a May 19 deadline.
Members of the Las Vegas marijuana industry called the legislative session “astonishing” and marveled at the Nevada government’s collective movement to jump-start its recreational marijuana program.
Nevada would be the first of four states that legalized recreational marijuana last November to start sales of the plant if licensed dispensaries are allowed to begin early-start recreational sales as planned on July 1.
“What they’ve done collectively is unprecedented,” said Frank Hawkins, owner of Nevada Wellness Center Marijuana Dispensary. “Usually you can’t get the government to do anything quickly.”
Hawkins, who voted against Ballot Question 2 because he believed a recreational industry would negatively impact Nevada’s current medical program, said he came on board with the new industry after seeing state officials’ “strong desire” to also preserve the medical program.
“You have to get huge kudos to them, for stepping out into waters they thought were uncharted,” he said.
David Goldwater, owner of Inyo Fine Cannabis Dispensary, agreed. He said the 10 percent excise tax outlined in SB487 on recreational sales was something the industry is reluctantly “choking down,” considering the otherwise industry-friendly legislation this session.
For Segerblom, who helped bring Nevada’s medical pot industry to life in the 2013 and 2015 legislative sessions, the end of this year’s session allows a rare moment of relaxation. Before getting back to work on the industry’s next steps, Segerblom said he’s taking at least Tuesday to celebrate and rest.
“A lot of times we have great ideas but we can’t get them through the process,” he said. “People really worked together this time to make it happen.”
The Mynt Cannabis Dispensary hosted its inaugural 420 Reno Fest celebrating the annual “4-20” day on Thursday, April 20, 2017. Jason Bean/RGJ
As Nevada nears the expected July 1 start date for its emergent recreational marijuana program, Republicans and Democrats put the finishing touches on the laws that will shape the state’s marijuana future for the next two years.
Tourists still have nowhere to smoke since the public consumption bill died, medical users still can’t buy guns and opioid addiction cannot be treated with cannabis despite Democrats’ best efforts.
All in all, though, marijuana advocates walked away from this year’s session with a lot of wins. Here is how marijuana will be taxed, labeled, regulated and how it’s going to affect you.
Despite Republicans’ efforts last week to kill the 10 percent retail tax on recreational marijuana, the Legislature ended up approving it last minute.
Why is the tax so important?
For one, Gov. Brian Sandoval most recently projected that recreational marijuana sales will bring in more than $60 million in state revenue over the next two years.
The way the bill is written, the money can be picked up out of the fund for education at any time.
Ratti’s bill also puts a cap on the license fee that cities may charge marijuana establishments. That fee can be no more than 3 percent of the establishment’s gross revenue.
As a whole, local governments statewide also will receive $5 million for their expenditure of resources.
One of the greatest challenges ahead is ensuring that prices remain competitive with those available on the black market.
Currently, an ounce of marijuana at a medical dispensary goes for about $300, while an ounce on the streets might go for a $100 less.
The Legislature may need to review its tax rates in two years, Ratti admitted, depending on how successfully the regulated market stomps out the black market.
“It’s everyone’s opinion here that is not going to exacerbate the black market?” asked Assemblyman Keith Pickard, R-Carson City.
Ratti could not give a definitive answer. Most of the information that state and federal officials have on the black market is speculative, Ratti said, so the tax rates are based on other state models.
Dispensaries — which will have control over retail prices— will have to be careful not to hike prices too high since Nevada soon will be competing with the black market, and California by January next year.
For fear that the medical marijuana program could be smothered by the new recreational program, lawmakers have made it easier to be a part of the medical program.
“The medical marijuana program already is at risk. We needed to update the program,” said Will Adler, executive director of the Nevada Medical Marijuana Association.
While medical cards used to cost about $100 for a year’s value, the cards now will cost half the price because background checks no longer are required. The cards will be good for two years.
“You were treated like a criminal if you wanted a card, and if you had a criminal background then you couldn’t get a card,” Adler said.
Because recreational marijuana is now legal and anyone can get product, there is no point in doing the background checks.
Assemblyman Nelson Araujo, D-Las Vegas, sponsored the bill that will make the medical program more accessible. It also will streamline the program, folding the administrative duties into the Department of Taxation.
The Department of Public Health will continue to issue the medical cards.
A main priority for legislators was to keep pot out of children’s hands.
Sen. Patricia Farley, Non-partisan-Las Vegas, sponsored a bill that restricts marijuana packaging from including images of cartoon characters, mascots, action figures, balloons or toys.
The product also cannot be based on another product that is marketed to children, such as gummy bears or lollipops.
“I’ve been working on this bill since last session,” said Farley, who is a mother of two.
Throughout the session, Farley amended the bill so that labels also will have to include warnings for pregnant women and notices that consumers should wait four hours before consuming any more since edibles are particularly potent and take time to be effective.
Dosage limitations that vary based on the product also are included in the bill. Most packages cannot contain any more than 800 milligrams total.
Farley also amended her bill to include a production date since concern arose about food poisoning.
“These are food products that are totally unregulated,” Farley said. “We want people to know exactly what they’re getting.”
Labels will also have to include bold print reading, “THIS IS A MARIJUANA PRODUCT.”
Starting on July 1, the same day that recreational marijuana is supposed to be on shelves in-state, law enforcement will only use blood tests from now on to determine whether drivers are are under the influence of marijuana.
Results can come back negative for someone who is high positive for someone who is not. The threshold for marijuana compounds in the blood is 5 nanograms.
Anyone who previously was convicted of possessing up to an ounce of marijuana in the past can file for their judgment to be erased and all related records to be sealed.
If the conviction was tied to any child abuse, sexual crimes or violent crimes, the conviction is ineligible.
Assemblyman William McCurdy II, D-Las Vegas, who sponsored the bill hopes that it helps people whose employment, living situation and eligibility for other opportunities because of a past marijuana possession convictions.
Nevada could see dispensaries on its tribal lands in the future.
It is unclear which tribal or state agencies would regularly monitor the medical and recreational marijuana industry on tribal lands since state-licensed businesses are constantly monitored by state agencies.
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Just one day ahead of the state legislature’s final deadline, Nevada lawmakers reached a deal late Sunday night that would set the state’s cannabis tax rate and send much of the revenue to public education.
The Senate measure passed around 11 p.m. Sunday night, includes a 10% tax on retail cannabis sales, and a 15% tax on growers. The Assembly is scheduled to concur Monday, with Republican Gov. Brian Sandoval expected to approve the budget package.
The cannabis tax is essentially the same as what Gov. Sandoval requested. Over the next two years, cannabis revenue will largely fund a $20 million boost for the state’s Opportunity Scholarships and provide $25 million to the University of Nevada, Las Vegas (UNLV), contingent on matching funds from private donors.
Instead of going to the education funding this biennium, it will instead go to the rainy day fund for emergency uses, after Senate Republicans had been withholding votes on the cannabis tax after unresolved policy issues—mainly, the Education Savings Accounts.
Republicans had originally said they would not support a budget that did not include funding for Educational Savings Accounts, a school voucher-like program that gives public money to families who pull their children from Nevada public schools.
State Sen. Julia Ratti (D-Sparks) told the Reno Gazette-Journal that putting the funds into the rainy day fund was the best option, given how late in the session it is. To put the funds into education this year, Ratti said, the legislature would need to reopen the K-12 budget, which has already been passed and sent on to the governor.
“I am actually quite pleased that it’s going to the rainy day fund,” she said. “I think it’s a really good move to make sure the state regains some of its fiscal stability.”
Ratti described the state’s cannabis tax framework as a rational system that creates a difference in pricing between adult-use and medical marijuana.
“That is really important to us,” she said, “making sure that we maintain a vibrant medical marijuana industry.”
Nevada Senate Majority Leader Aaron D. Ford, D-Las Vegas, praised the agreement in a statement issued after the Senate vote last night.
“With strong consumer protections in place, our recreational marijuana industry is poised to become a critically important source of revenue for Nevada,” Ford said.
A man died Sunday night after a rollover crash in Summerlin. Police responded to calls around 5 p.m. yesterday that a car had crashed into a landscape median at a high speed near Lake Mead and Ridgemoor Street before it began to turn over into westbound lanes. The man was not wearing a seatbelt and was ejected from the car, dying at the scene.
A man died and another was rescued at Lake Mead Sunday. Police say two men were struggling to swim near Boulder Beach at around 3:30 p.m. yesterday. A bystander was able to save one man but the other went missing. His body was found about an hour later. Neither man was wearing a lifejacket.
And after failing to come to a consensus on critical state budget matters late last week, the Nevada State Senate reached a deal overnight to approve some of the final bills of the legislative session. The deal included reintroducing a recreational marijuana tax, a capital improvement project and adding $20 million in tax credits to the Opportunity Scholarship fund. Senate Republicans opposed the pot tax and the projects bill in protest of a lack of funding for education savings accounts. The money toward the Opportunity Scholarships is seen as a compromise on that matter.
For all of your Las Vegas including all of our coverage of the final day of the legislative session, visit reviewjournal.com
CARSON CITY — Native American tribal governments in Nevada will now be able to negotiate directly with the governor’s office on marijuana, thanks to legislation passed Friday.
Senate Bill 375, which opens the door for legal negotiations on the use and sale of medical marijuana on tribal lands, also allows the governor’s office to bypass federal laws that limit commerce talks between tribes and Congress.
“The voters have spoken on marijuana and they’ve adopted this,” Nevada Gov. Brian Sandoval said just minutes before signing the bill. “It’s important that the Native American people can participate in this and for the state to work with all of you.”
Sandoval also touted the economic benefits of the bill to the tribes, calling SB375 “developing and enabling.”
Present at the bill signing, in the second floor of the Capitol Building, were nearly a dozen members of the Nevada Tribal Cannabis Alliance — which includes 14 tribes across the state, including the Las Vegas and Moapa Paiute tribes. All 27 federally recognized tribes in the state, which include an estimated 40,000 Native Americans, are eligible for negotiation under the terms of the new law.
Standing with her fingers interlocked in front of her, a smiling Yerington Paiute Chairwoman Laurie Thom thanked Sandoval and state Sen. Tick Segerblom for “supporting the tribes and listening to our needs.”
“This is key to the economic development of our tribes and also brings needed medicine to the reservation,” Thom said.
Sandoval also announced the passing of Senate Bill 396 on Friday, a bill to increase funds and permission for low-THC hemp research to extend beyond Nevada universities and select marijuana growers in the state.
According to the new law, hemp, which is made of seeds and stems of marijuana plants, could not contain more than 0.3 percent THC, the psychoactive ingredient found in marijuana. Less than 20 producers statewide currently grow hemp, according to the Nevada Department of Agriculture. A department spokesman did not say how many additional hemp growers would be added under the new law.
The passing of SB375 and SB396 were the third and fourth marijuana-related bills signed into law by Sandoval this session. Sandoval also vetoed two weed bills — one to establish state apprenticeships for marijuana and the other to include opioid addiction as a qualifying condition for a state medical marijuana card — earlier this week. As many as four weed bills, covering such issues as the price of medical marijuana cards to the size and shape of edibles for sale in the new recreational marijuana industry, are still outstanding in the Legislature.