Nevada high court dismisses liquor firms’ adult-use marijuana distribution suit

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The Nevada Supreme Court dismissed a lawsuit that would have required the state to license only alcohol wholesalers as distributors of recreational marijuana.

The decision doesn’t have an immediate effect, but “when we decide to open up more (distributor) applications, it will allow us to select from a broader range of applicants,” said Stephanie Klapstein, spokeswoman for the Nevada Department of Taxation.

Nevada currently has 33 marijuana distributor licensees, Klapstein said. That includes, she said, 24 nonalcohol distributors that were licensed before the state Supreme Court filed a temporary injunction in September 2017 prohibiting regulators from issuing more rec MJ distributor licenses.

Here’s what led to the litigation:

  • Nevada’s voter-approved rec cannabis law required the state to give alcohol wholesalers exclusive rights as distributors for the first 18 months of the program, unless the distributors couldn’t meet demand.
  • A state panel concluded that alcohol distributors wouldn’t be able to keep up with the new adult-use market’s surging demand in 2017, then invoked a provision allowing additional distributor licenses to be issued.
  • The Independent Alcohol Distributors of Nevada filed suit, seeking to prevent the state from issuing nonalcohol distributor licenses. But a lower court allowed the state to continue issuing nonalcohol distributor licenses until the state Supreme Court stepped in and halted the practice.
  • The state high court, according to the Nevada Appeal newspaper, now has ruled unanimously that the issue is moot because the legal requirement to license only alcohol distributors expired Nov. 15.

Associated Press and Marijuana Business Daily