Judge halts state application process for recreational marijuana in Nevada

The Nevada Tax Commission approved the temporary regulations allowing the sale of retail pot, clearing the way for legal marijuana sales to begin as early as July 1. (Nathan O'Neal | KSNV)

A legal snag could delay the July 1 launch of recreational marijuana sales in Nevada.

A district judge granted a temporary restraining order Tuesday, effectively halting Nevada’s recreational marijuana application process.

It’s a fight that boils down to distribution rights. Question 2 – which was approved by voters in November – gave alcohol distributors the first dibs at becoming marijuana distributors. However, earlier this month, the state taxation department opened those applications to any medical marijuana business in good standing.

The Independent Alcohol Distributors of Nevada filed for the temporary restraining order, claiming that “they are likely to be entirely shut out of the marijuana distribution business.”

“What we have said – you’re doing it incorrectly, you’re not doing what the voters directed,” said Sam McMullen, who represents IADON.

A district judge agreed with the IADON, effectively putting the state’s application process on hold.

The owners at Shango Las Vegas submitted their state application last Friday.

“We're waiting with bated breath, waiting to see exactly what the regulations will be obviously, it's very important to us. We want to make sure we're doing everything to the T,” said Matthew Gardiner of Shango Las Vegas.

Gov. Brian Sandoval is banking on roughly $100 million in anticipated pot taxation for his budget – but this legal setback could put the launch of recreational marijuana sales at risk.

A spokesperson for the state’s taxation department said they are reviewing the judge’s order with their legal counsel but intend to “defend our regulations to the fullest extent of the law.”

Meanwhile, McMullen says it’s unclear how this legal maneuver could impact the July 1 target start date for recreational marijuana sales.

“They need to decide whether they’re going to change or fight and if they change or work with us, we think we can hit the start date – if they don’t, it’ll be a long process,” said McMullen.

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