A measure before lawmakers would scrap Nevada’s merit-based cannabis licensing system in favor of a scheme that allows current licensees to expand and saturate the market, while effectively locking out new applicants, according to the Nevada Dispensary Association, which represents the state’s marijuana sellers.
Senate Bill 235 would allow dispensaries to convert their medical licenses to recreational permits, a move that could result in the addition of 55 new retail stores, according to NDA President Tisha Black, resulting in a 140 percent increase in new dispensaries in the state.
“Senate Bill 235 disregards market necessity, disregards established statutory restrictions, disregards the need to stabilize the industry, avoids the competitive licensing process, and significantly increases the number of recreational licenses for a distinguished few, all of whom already have dispensary licenses,” Black wrote Wednesday in an email to members that was obtained by the Current.
The bill is sponsored by Sen. Dallas Harris and has the backing of “all the members of the Dispensary Association who didn’t win a license in the last round,” says NDA board member and former state lawmaker David Goldwater, co-owner of Inyo Fine Cannabis, and one of the bill’s primary backers.
“The lawsuit was the catalyst for the bill,” Goldwater says of marathon litigation in which a judge found the Nevada Department of Taxation engaged in favoritism in issuing licenses in 2018. “The plaintiffs prevailed but no remedy was available” in the form of additional licenses.
Goldwater says SB 235 pits “the little guys against the big guys.” But he admits it closes the door on further diversification of Nevada’s cannabis industry, which is largely controlled by corporate interests, i.e., wealthy white men.
“These licenses would be available to the existing medical license holders and would not be available to the general public,” Black wrote.
“Diversity is a big issue but it’s not a simple issue,” says Goldwater. “It is very hard to define diversity when it comes to ownership. We define it as diversity in employment, management, and ownership.”
”I think there’s a way through amendment, as it relates to licensing and help on diversity, and do a lot of work to overcome the problems we’ve had,” Goldwater said.
Harris, a legislative champion for diversity, did not respond immediately to requests for comment.
Last year, at Goldwater’s suggestion, Harris was interviewed by the NDA as a replacement for outgoing executive director Riana Durrett, according to sources who spoke on the condition of anonymity. She was not selected for the position.
Goldwater declined to confirm or deny.
“Employment is confidential,” he said via email.
“There is no evidence that Nevada market demand could support the resulting supply increase or that the CCB could readily support the increase in regulatory oversight at this time,” Black wrote.
Black says when the market demands additional licenses, they “should be available to any interested party based on merit that is demonstrated through an open, fair and transparent application process.”
Goldwater says as a result of the rift in the NDA, he and other ‘small operators’ may start their own association.
“The NDA has turned into an organization that represents only the large operators. In order for smaller, independent operators to have a voice in this process, it may take a separate association,” he said.