Pubdate: Tue, 11 Jul 2017
Source: Los Angeles Times (CA)
Copyright: 2017 Los Angeles Times
Author: Kurtis Lee


Nevada officials have declared a state of emergency over marijuana:
There's not enough of it.

Since recreational pot became legal two weeks ago, retail dispensaries
have struggled to keep their shelves stocked and say they will soon
run out if nothing is done to fix a broken supply chain.

"We didn't know the demand would be this intense," Al Fasano,
cofounder of Las Vegas ReLeaf, said Tuesday. "All of a sudden you have
like a thousand people at the door.aE&We have to tell people we're
limited in our products."

In declaring a state of emergency late last week, the state Department
of Taxation warned that "this nascent industry could grind to a halt."

As bad as that would be for marijuana consumers and the pot shops, the
state has another concern: tax revenue. A 10% tax on sales of
recreational pot -- along with a 15% tax on growers -- is expected to
generate tens of millions of dollars a year for schools and the
state's general fund reserves.

With about 100 growers in operation across Nevada, there is plenty of
wholesale marijuana. The crisis has to do with distribution and state
rules over who is allowed to transport marijuana.

In the run-up to last year's state referendum over legalization --
which was overwhelmingly approved by voters, allowing people aged 21
and over to buy or possess up to an ounce of marijuana -- the state's
powerful alcohol lobby worried that legalized weed would cut into
liquor store sales.

So in a concession to the the alcohol industry, the ballot measure
stipulated that for the first 18 months of pot sales only wholesale
alcohol distributors would be allowed to transport marijuana from
cultivation facilities to the dispensaries.

Just in time for the long Independence Day weekend, recreational
marijuana has become legal July 1 in Las Vegas and all of Nevada.

For around $7 to $10, you can now walk into one of the dozens of
dispensaries and buy a joint. Just don't plan on smoking it along the
Strip or on downtown's Fremont...

Just in time for the long Independence Day weekend, recreational
marijuana has become legal July 1 in Las Vegas and all of Nevada.

For around $7 to $10, you can now walk into one of the dozens of
dispensaries and buy a joint. Just don't plan on smoking it along the
Strip or on downtown's Fremont... (Jay Jones)

When legalization took effect July 1, nearly 50 dispensaries -- all of
them already in the medical marijuana business -- had been licensed to
sell recreational pot. But no alcohol distributors had been approved
to transport it.

The state Department of Taxation, which regulates legal marijuana,
said it had received about half a dozen applications from alcohol
distributors but that none had so far met the state licensing
requirements, which include background checks and security protocols.

As a result, the dispensaries have had to rely on marijuana already in

Dispensaries and state officials had anticipated the problem, and in
late June the Department of Taxation attempted to loosen the licensing
rules to allow dispensaries to transport their own marijuana.

But a District Court judge blocked the request, arguing that the state
needed to go through the regulatory process to determine how many
distributors were needed. The state appealed the decision to the
Nevada Supreme Court.

In the meantime, the Department of Taxation proposed emergency
regulations aimed at expanding the pool of potential

Deonne E. Contine, executive director of the state agency, wrote in
the state of emergency declaration that the industry would be unable
to function "unless the issue with distributor licensing is resolved

Gov. Brian Sandoval, who did not support legalization, has authorized
state officials to hold a hearing Thursday to establish emergency
reforms, including speeding up the review process for transport
licenses and allowing cannabis companies to move pot if they meet
certain requirements.

All four of the other states where recreational pot is legal --
Colorado, Oregon, Washington and Alaska -- allow the dispensaries to
transport marijuana themselves, with no privileges given to alcohol

"It is important that the distribution issue gets resolved, because if
it is not sales will be halted completely," said Riana Durrett,
executive director of the Nevada Dispensary Assn., a nonprofit that
advocates on behalf of retail pot shops.

Many Nevada dispensaries had stockpiled marijuana before legalization
took effect.

"We bought as much as we could hold ahead of legal sales beginning,"
said Fasano, whose dispensary is less than a block from the Las Vegas
Strip and sells mainly to tourists.

The state dispensary association estimated that in the first four days
of legalization customers bought between $3 million and $5 million
worth of pot. The state is not scheduled to release its numbers until
the fall.

Tanya Lupien, vice president of sales and marketing at Medizin Las
Vegas, said on Tuesday that her dispensary was running low on "grab
and go" items such as marijuana edibles and vape pens, and that
without a resupply the business stands to lose tens of thousands of
dollars a week.

"We need expanded regulations to have business as usual," she

This month, on the first day of recreational sales at Oasis Medical
Cannabis, a block from the Strip, employees scurried around with
tablet computers, like Apple store clerks, fielding questions from
patrons about Pure Haze, Fire Angel and other pot strains.

The cofounder, Ben Sillitoe, was excited to see customers lined up
around the building. But now all that demand is presenting a challenge.

"We need to place orders to avoid running out of stock on popular
items," he said Tuesday.
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MAP posted-by: Matt