After Thursday's ruling the Nevada Department of Taxation can begin issuing distribution licensing to qualified applicants beyond just those with alcohol distribution licenses. They hope this will prevent any shortage of product.
This back and forth between the Department of Taxation and the alcohol distributors has been going on since the early start program began earlier this summer. On August 10th the court had determined that liquor wholesalers weren't sufficient to serve the marijuana industry so licenses could be distributed to other applicants. The following day those alcohol distributors filed a temporary restraining order, which has prevented any new licenses from being issued.
Alcohol distributors argue they deserve sole distribution the first 18 months of recreational sales, since that was part of Question 2 that was passed by popular vote last November. Both sides appeared in court again Thursday, August 17th.
The Associated Press reports that the court ruled that the demand was too high not to allow more distributors and specifically referenced Governor Brian Sandoval's statement of emergency, citing lost tax revenue due to lack of supply. The alcohol distributors simply don't have the capabilities needed to serve all of Nevada.
District Judge Russell also stated he does not have the authority to overturn the Nevada Tax Department, which decided to open permits to all businesses. Ultimately, Carson City District Judge James Todd Russell heard the case and sided again with the Nevada Department of Taxation.
Since recreational sales began in the Reno area, several dispensaries have told Channel 2 News that they would like to get supply up to better serve the needs of their customers, who often leave and go elsewhere when they can't find the products they're looking for. That increased supply could help stabilize the market and lower prices, and the hope is that that will lead to a smaller black market.
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The fight is anticipated to continue. The lawyer representing the alcohol distributors involved in the case told the Las Vegas Review Journal that they plan to appeal the decision to the Nevada Tax Commission, which will make the final decision on which businesses can be distribute marijuana.
