Nevada's Legal Weed: Why Dispensaries Are Already Running Low

The thing about L’Orange is it doesn’t smell like orange at all.

Other strains are truer to their names – Lemon Cookie is reminiscent of Pine-Sol, Sour Diesel resembles tarry exhaust – but L’Orange conjures a high school locker room, if the lockers harbored fermented gym clothes and a very divisive kind of cheese. It’s potent, in both scent and THC, and it’s among the many strains people in Nevada are clamoring to try, so much so that shops are worried they’ll soon be running out of product.

Less than two weeks after recreational marijuana sales began in Nevada, some dispensaries are running low on supplies due to a hangup in distribution. Per November’s ballot measure, alcohol distributors have exclusive rights to transport weed for the first 18 months of legal sales – an effort to protect them from losing business – but none are ready to do so. 

Pot is plentiful in Nevada, but so far no one has been licensed to move product between production facilities and shops. Dispensaries with attached grow operations are in limbo even though their supplies are often housed in adjacent buildings. As Riana Durrett of the Nevada Dispensary Association puts it, they can’t carry goods from “one side of a room to the other.”

Durrett says about a quarter of Nevada’s 47 recreational dispensaries are running low on products, though no one has run out.

As supplies dwindle, Gov. Brian Sandoval has declared a “statement of emergency” that would allow the Department of Taxation to consider other applicants. The department opened applications to marijuana businesses earlier this year, but a judge shut it down, siding with alcohol distributors.

Tick Segerblom, the state senator who championed both medical and recreational in Nevada, is confident the regulation will pass, and says the governor’s order should supersede the judge’s.

“Normally, an emergency order takes precedence over everything,” he says. “I suspect the judge won’t be willing to get involved.”

Not surprisingly, some stoners are skeptical.

“There’s an infinite supply,” one dispensary-goer speculated, “but you know how the government is – they always want their cut.”

He’s not entirely wrong. While the supply may not be infinite, the state government would like to see the distribution issue resolved quickly, in part, because it’s counting on the revenue. Gov. Sandoval has already budgeted $70 million dollars in estimated revenue for education, so a halt in sales could hurt schools.

Jobs are also a concern. Department of Taxation spokesperson Stephanie Klapstein told the Reno Gazette-Journal that millions of dollars and thousands of jobs are at stake.

“Unless the issue with distributor licensing is resolved quickly, the inability to deliver product to retail stores will result in many of these people losing their jobs and will bring this nascent market to a grinding halt,” Klapstein told the Gazette-Journal. “A halt in this market will lead to a hole in the state’s school budget.”

Weed and weed products in Nevada are taxed at about 33 percent, with 15 percent for schools, 10 percent for a rainy-day fund and an 8 percent sales tax that’s divided between state and local government. The Department of Taxation has yet to release revenue reports, but the Nevada Dispensary Association estimates that revenue surpassed $1 million in the first few days of sales alone.

Durrett says demand was higher than expected, but she didn’t expect supplies to run low this soon.

She estimates at least eight distributors are needed to serve both Northern and Southern Nevada with same-day deliveries, though only seven alcohol distributors have applied since November. In June, the Department of Taxation had received 93 applications, but only five of those were from alcohol distributors.

“It’s disappointing that a lawsuit interrupted what is otherwise a successful program, but we look forward to regulations that will address the current lack of licensed distributors,” a Nevada Dispensary Association statement reads. “No matter what happens in the lawsuit or with adoption of emergency regulations, alcohol distributors will be able to apply for and obtain distribution licenses.”

The Independent Alcohol Distributors of Nevada were not immediately available for comment.

The Department of Taxation is expected to vote on emergency regulations Thursday. If it passes, Durrett hopes to see distribution begin in two or three weeks, and Segerblom says he expects the Department’s order to be revisited 30 days after it takes effect.

“One thing we’ve learned about Nevada is that the governor, the Department of Taxation and, to some extent, the Legislature are committed to making this work,” Segerblom says. “We’re going to make sure no one runs out of weed.” Not even L’Orange.

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