This Saturday, the State of Nevada will begin allowing sales of recreational marijuana. After voters passed Question 2 to legalize it, the state moved quickly to put the regulatory and tax infrastructure in place. But in the eleventh hour, a district court ruling threatened to leave it all up in smoke.
How did the state overcome this final legal hurdle, and what lies ahead in this brave new world of legal pot?

Alcohol distributors go to court.

Earlier this year, the Nevada Legislature approved a series of new laws to complement Question 2, including a new excise tax to fill the state’s rainy day fund. But on June 20, Carson City District Court Judge James Wilson threw a wrench in this plan when he ruled in favor of alcohol distributors in their suit demanding 18 months of exclusive rights to sell marijuana.
Former Yes on 2 Campaign Manager Scot Rutledge feels it’s best for the state to simply apply what works well with the existing medical marijuana program to recreational marijuana. “We believe that in the spirit of the initiative, marijuana distribution was always intended to mean only delivery between independent wholesalers and retail stores, nothing more.”

But then, Nevada found a work-around.

On Monday, the Department of Taxation announced a new set of rules for recreational marijuana sales in compliance with the court order that put the state back on track to sell marijuana starting this Saturday. Under the state’s new rules, dispensaries can sell to recreational customers just the marijuana they currently have in stock. Rutledge has concerns that the limitations could lead to “rationing and higher prices”, which would mean less tax revenue for the state. “That obviously puts pressure on the Department of Taxation and the alcohol wholesalers to get a solution in place so that recreational marijuana can continue to be sold.”

Photo by Andrew Davey

Assembly Member Nelson Araujo (D-Las Vegas) voiced more optimism when he spoke with us yesterday. Araujo sees the new rules as a temporary fix that puts Nevada back on track for a timely launch of legal recreational marijuana sales.

Watch our conversation with Nelson Araujo on marijuana in Nevada.

Araujo played a very active role in crafting the state’s new marijuana laws when the Nevada Legislature was in session. Araujo sponsored AB 422 to update the medical marijuana program, and AB 463 to establish the new marijuana excise tax. Though AB 463 was not the final legislative vehicle for the excise tax, many of his ideas in that bill were integrated into SB 487, Senator Julia Ratti’s (D-Sparks) comprehensive marijuana taxation bill that was ultimately selected as the legislative vehicle for the excise tax.
Araujo had nothing but praise for Ratti and her efforts to craft the perfect compromise. He appreciated Ratti including him in her working group that included Governor Brian Sandoval (R), Senator Tick Segerblom (D-Las Vegas), Assembly Member Teresa Benitez-Thompson (D-Reno), law enforcement, local governments, and marijuana businesses. “Senator Ratti was phenomenal in bringing everyone together and reaching a consensus that works. We were all working towards one common ground, and that common ground was amended into Senator Ratti’s bill.”

What’s next?

Despite his concerns over the lawsuit and the temporary new rules, Scot Rutledge ultimately sees a positive outcome for marijuana legalization. “We are talking about a highly regulated industry that is being built by community leaders, like lawyers, doctors, former gaming executives, and others who have been doing business in Nevada for a very long time. […] They are proceeding with the highest regard for public safety and compliance with state and local laws.”
Araujo spoke proudly of the work he and his colleagues did this year. “I’ve always been proud of Nevada for being a trendsetter. I’m confident this can and will be done well.” Recreational marijuana sales begin in Nevada this Saturday.
{Cover photo provided by Ritesh Ranjan, via Pexels. Licensed under Creative Commons.}