Pictured: A monitor displays different types of Nevada marijuana for sale at Blum in Las Vegas on October 27, 2016. (John Locher, The Associated Press)

Down to the wire: Nevada’s July 1 launch of recreational pot sales hangs in the balance

“We have a ‘war room’ in Vegas where our staff are working long hours to move the applications through the review process,” said Department of Taxation spokeswoman Stephanie Klapstein

CARSON CITY, Nev. — A Nevada judge says he expects to decide Tuesday whether the state can move forward with plans for medical marijuana dispensaries to begin selling pot for recreational use for the first time on July 1.

Lawyers for the liquor industry and the Nevada Department of Taxation argued at a daylong hearing Monday whether the state has the authority to issue marijuana distribution licenses necessary to launch the sales to anyone besides alcohol distributors.

Carson City District Judge James Wilson said he had hoped to issue a decision following the more than six hours of testimony but now plans to rule Tuesday.

It’s been legal for adults to possess up to an ounce of marijuana in Nevada and consume it in private residences since the beginning of this year, but currently only medical dispensaries can sell it and only to people with medical cards.

The state says it has the power to temporarily license some existing medical marijuana cultivators and retailers to serve as their own middlemen. It wants to get a head-start on collecting millions of dollars in tax revenue devoted to education before permanent rules are required by Jan. 1, 2018.

The liquor lobby sued, saying the state did not give it the first shot at distribution licenses as called for in the ballot measure approved by voters in November, the only legal pot state with that arrangement.

Carson City District Judge James Wilson blocked all licensing until the matter is resolved. He refused the state’s request last week to dismiss the lawsuit.

The law says alcohol distributors have exclusive rights to pot distribution licenses, unless the state determines there is not enough interest to meet anticipated demand.

The tax department said there was “insufficient interest” among the liquor lobby when it published the proposed regulations. It later said that determination would be made after all applications were processed.

One of the alcohol distributors who insists their industry can handle the job is Allan Nassau, a former tour and production manager for rock bans including the Allman Brothers and INXS who now owns Red Rock Wines — a boutique wine distributor.

He testified that his business currently serves more than 300 restaurants in Las Vegas, many on a daily basis. He says delivering pot to more than 100 retailers would be easy compared to that.

“I’ve been responsible for the logistics of literally tons of sound and light and stage gear going from city to city around the country,” Nassau said. “This is something I could basically do in my sleep.”

Nassau claimed the existing medical marijuana industry — which filed friend-of-the-court briefs in support of the state but was not allowed to argue in court — wants to monopolize pot business sectors
“They want to grow it, produce it, distribute it and sell it,” he said.

Nevada Department of Taxation Deputy Director Anna Thornley testified state regulators have been planning since February to get an “early start” recreational marijuana distribution program running by July to begin bringing in millions of dollars in tax revenue before a permanent system must be adopted on Jan. 1, 2018.

“It’s the department’s intention to issue licenses by July 1,” she told the judge.

Department of Taxation spokeswoman Stephanie Klapstein said no distributor licenses will be issued to applicants that are not liquor wholesalers as long as the judge’s restraining order is in place but said the department is ready to act when it receives clearance.

“We have a ‘war room’ in Vegas where our staff are working long hours to move the applications through the review process,” she said.

Thornley said she believed officials have received 90 applications for distribution licenses and only five from liquor wholesalers.

Klapstein said 93 have been received — five from liquor wholesalers and 88 from existing medical marijuana establishments.