Sisolak bemoans weed regulatory system he helped create

By: - October 11, 2019 3:55 pm
this'll fix it

Gov. Steve Sisolak signing legislation to create the Cannabis Compliance Board in July 2019, as Taxation Department Director Melanie Young (standing, second from left) looks on. (Governor’s office photo)

Nevada Gov. Steve Sisolak set the bar high for the state’s marijuana industry, aspiring to be “the gold standard of the nation.”  Now, with a federal indictment alleging friends of Rudy Giuliani attempted to buy their way into Nevada’s weed industry via laundered campaign contributions to then-Republican candidates for governor and attorney general, Adam Laxalt and Wes Duncan, Sisolak appears to fear the image is tarnishing. 

“The Governor is outraged by yesterday’s news that a foreign national attempted to influence Nevada’s elections through a million-dollar laundering scheme in order to gain a marijuana license and enter our legalized market,” a statement from Sisolak’s office said.  The governor did not explain how the attempt by Giuliani’s associates is a reflection on the state’s cannabis industry.

“Yesterday’s indictments and their connections to Nevada, in combination with ongoing issues in Nevada’s legalized marijuana industry – such as illegal sales to minors, serious allegations of manipulated lab results, and a licensing process mired in litigation – have led the Governor to expedite regulatory and enforcement measures,” the statement continued.

A recent lawsuit filed by unsuccessful applicants for cannabis establishments alleged irregularities with the selection process, including the state’s hiring of Manpower, a temporary employment agency, to screen applicants.

A statement released Friday morning by Sisolak’s office says he “is disappointed in the lack of oversight and the inaction from the state over many years that led us to this critical juncture – including the apparent absence of a single criminal referral by the Marijuana Enforcement Division since the inception of licensed marijuana sales, medical or recreational, in Nevada.” 

Sisolak did not say whether he knows of acts that warrant criminal prosecution.  A spokesman did not respond to the Current’s request for comment.

Sisolak, as chairman of the Clark County Commission, took the lead in local licensing matters and was as instrumental as any public official in shepherding the budding cannabis industry through its first round of approvals, in which applicants received special-use permits from Clark County before being vetted by the state. 

Sisolak defended the process as a means of ensuring transparency in selecting licensees for marijuana establishments. 

Sisolak’s gubernatorial campaign gleaned a total of $723,000 in campaign contributions from individuals and companies related to the cannabis industry, according to the Nevada Independent, which reported 53 companies or individuals gave the $10,000 maximum to Sisolak’s gubernatorial effort.  

But sometimes contributions designed to benefit one candidate over an opponent do not appear in contribution reports.

On October 1, 2018, a month before Sisolak defeated Laxalt in the race for governor, Sisolak supporter and cannabis industry executive Dave Kallas formed a political action committee called “The Committee for the Betterment of Clark County.”  

On the same day, the PAC paid its only expense — $20,000 in consulting fees to Lou Colagiovanni, a political researcher who played a role in outing former Congressman Anthony Wiener’s sexual proclivities. 

In the weeks before the 2018 election, Colagiovanni pitched local and national media on a story alleging damaging information about Sisolak’s opponent, Laxalt.  

The Committee for the Betterment of Clark County has just one contribution, dated October 7, 2018 of $20,000 from MM Development Company, LLC, owner of Planet 13, advertised on its website as a “Cannabis Superstore and Entertainment Complex.”

MM Development, led by former Henderson City Council member Larry Scheffler and former Henderson Mayor Bob Groesbeck, has made significant contributions to a number of public officials since its inception in 2014, but has contributed the maximum of $10,000 only four times: twice to Sisolak, once in 2015 and again in 2018, once to Sisolak’s 2018 inaugural committee, and once to then-Commissioner Tom Collins in 2015.  

Kallas declined to say whether the Committee for the Betterment of Clark County was formed to pay Colagiovanni to spread the allegations about Laxalt in an effort to help Sisolak.

Sisolak’s office Friday announced the formation of a multi-agency task force “to root out potential corruption or criminal influences in Nevada’s marijuana marketplace.” The task force will immediately take up matters that were destined for the Governor’s yet-to-be formed Cannabis Compliance Board, a marijuana-focused version of Nevada’s Gaming Control Board.

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Dana Gentry
Dana Gentry

Dana Gentry is a native Las Vegan and award-winning investigative journalist. She is a graduate of Bishop Gorman High School and holds a Bachelor's degree in Communications from the University of Nevada, Las Vegas.