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Nevada’s Looming Marijuana Shortage: Emergency Regulations Adopted

On July 13, the Nevada Tax Commission (the “Commission”) held a public hearing to discuss the potential marijuana product shortfall facing the state’s dispensaries following the launch of state-authorized recreational marijuana sales in Nevada on July 1. The reason for the potential product shortfall: a provision in the initiative petition that legalized recreational marijuana in Nevada that gave an 18-month monopoly on recreational marijuana distribution to licensed liquor distributors.

As of the date of the hearing, there were only two liquor distributors that had received licenses as marijuana distributors. This number appears to be far short of what will be needed to restock Nevada’s 47 licensed retail marijuana dispensaries, which report ongoing heavy traffic from recreational purchasers. According to news sources, these 47 dispensaries reported more than 40,000 retail transactions in the first weekend of recreational sales.

After taking public comment, which included input from liquor distributors and marijuana dispensaries and their representatives, as well as other members of the public, the Commission voted unanimously to adopt the emergency regulations.

The emergency regulations do not automatically open up the recreational marijuana distribution market; they merely give the Nevada Department of Taxation the discretion to consider the situation and make a determination regarding whether more distributors are needed. The regulations include a prescribed process and timeline for the Department to make the determination. In addition, that determination must be made at a publicly noticed meeting, after a request is made with five days’ notice for the state’s marijuana establishments to complete a survey that will help the Department determine if there is a need. This public meeting has not yet been set, but it is expected to be scheduled soon.

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Jennifer J. Gaynor, Dickinson Wright, Carson City, Gaming Attorney
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Jennifer Gaynor represents clients before the Nevada Legislature in Carson City, Nevada. She also practices before various professional and licensing boards and state and local tax authorities, and represents clients on matters involving First Amendment law, public records and open meeting law, gaming law and regulatory agency actions.

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Greg Gemignani's practice focuses primarily on intellectual property law, gaming law, technology law, internet law, online gaming law, and online promotions law. He has represented many clients ranging from the largest casino companies to start-up internet ventures.

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Kate C. Lowenhar-Fisher, Dickinson Wright, Las Vegas, Gaming Lawyer
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Ms. Lowenhar-Fisher is a leading Nevada gaming attorney who counsels many of the world’s premier gaming companies on regulatory issues in connection with mergers and acquisitions, corporate restructuring, reorganizations and financings.  She has extensive experience advising clients on issues related to Internet gaming, social gaming, fantasy sports, liquor licensing, sweepstakes, contests, and promotions. She regularly represents individuals and businesses before regulatory agencies, including the Nevada State Gaming Control Board, the Nevada Gaming Commission, the...

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Jeffrey A. Silver, Dickinson Wright, Gaming regulatory Attorney, Nevada
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Mr. Silver's practice focuses on every aspect of gaming, liquor licensing and regulatory law, as well as planning and zoning matters, contractor licensing and transportation law.

Mr. Silver’s representative clients include Gaming Laboratories International, Dubai World, Mohegan Tribal Gaming Authority, Tuscany Hotel & Casino, Riverside Resort (Laughlin, NV), The Stephen Siegel Group, Grand Sierra Hotel & Casino (Reno, NV), Century Gaming Technologies, Applebee’s Restaurants, Bell Transportation, United Coin, Ryan's Express, and Casino...

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