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The Truth Behind the Nevada ‘Weed Shortage’ Revealed

July 20, 2017

Just under a month into recreational sales of cannabis in Nevada and dispensaries are reportedly running low. However, they will soon be able to restock thanks to a creative political move. 

 

Although Nevada is off to a great start financially, raking in more than $3 million in sales and $500,000 in tax revenue in just the first four days of adult use sales,  the 47 dispensaries currently open to the adult-use market were afraid of running out of cannabis products during those first two weeks. While many believed the “weed shortage” had to do with supply and demand it actually had to do with a very specific regulation that prevents recreational cannabis from being transported.

With big bucks from recreational sales tax revenue on the line, the state tax commission went forward with emergency regulations previously discussed by the state’s Governor Brian Sandoval.  The first cannabis distribution license was awarded to Crooked Wine, a liquor distributor based in Reno.

However, Stephanie Klapstein, spokeswoman for the Department of Taxation made it clear that Crooked Wine would not be distributing pot to stores.

A Temporary Solution

Blackbird Logistics, at the forefront of Nevada medical marijuana companies, has partnered with Crooked Wine to bring stores their product.  Crooked Wine will be holding the license as Blackbird Logistics distributes.  Which, in essence is illegal on a federal level.

Crooked Wine could lose their marijuana distribution license should federal regulators have an issue with their current arrangement.

Rebel One, another Las Vegas based marijuana distribution company, will be joining Blackbird (through Crooked Wine’s license) in distribution immediately, explains Klapstein.

By having distributors, 50 dispensaries will be able to restock for the first time since initial legalization on July 1st.  

Long-Term Distribution

Even though emergency regulations have eased the issue, more licensed distributors are needed for long-term solutions.

“We’re just happy that now we get to concentrate on the experience and the customer as opposed to everything else”, said Armen Yemenidijan, CEO of Essence Cannabis Dispensaries.

Even though the state of Nevada and Gov. Brian Sandoval signed emergency regulations into place on July 7th, some believe that there was never a need.

“There’s no emergency here,” said  Kevin Benson, the Independent Alcohol Distributors of Nevada’s attorney.  Benson goes on to say that the problem only became apparent because the Tax Department was quick to rush sales by July 1st.  

The core issue in this week’s debate remains the distribution licenses, and the debate is far from being over.  After the vote, Commissioner Thom Sheets was told that liquor distributors may be plotting to file a restraining order against the state due to the current regulations.

Stop Gap

“Unlike the myth of utter chaos and shortages, I have seen some favorites sold out, but my experiences have been filled with well-trained and prepared dispensary teams who have exemplified the future of retail marijuana sales,” said Vegas-based medical marijuana patient, advocate, and entrepreneur Krista Whitley said of the “weed shortage” situation in Nevada in an interview with High Times. 

vegas-weekend-boxWhitley, who is known for always being one step ahead of the game curated some of those sold-out favorites products into a Sin City worthy party pack dubbed the Vegas Weekend Box.

These super high quality products from Nevada market leaders including The Cannavative Group and Tahoe Hydro allows new users to experiment with different types of cannabis products to see what works best for them.

Cannabis vs Alcohol?

The initial Ballot, “Question 2”, which led into the legal distribution of recreational marijuana sales gives the Department of Taxation the discretion to license the distributors as it sees fit. Supposedly, there were not enough “qualified” applications from alcohol distributors.  Hence, there are only two distributors currently holding licenses.  However, the same ballot gives alcohol distributors the exclusive rights to disperse marijuana.  

Alcohol Distributors then sued to prevent the state from opening licensing to other companies.  A Carson City judge then blocked Nevada from widening the circle of potential distributors away from solely the alcohol industry.

Only time will tell how the fight between alcohol distributors, the state Tax Commission, marijuana dispensaries and other companies looking to gain distribution licenses will unfold.