LAS VEGAS (FOX5) — More than a dozen Nevada marijuana dispensaries are suing the Nevada Department of Taxation to make licensing standards more transparent.
In one of five lawsuits brought by 11 dispensaries combined, cannabis business owners claimed Nevada unconstitutionally selected 61 ‘winners’ from a pool of 462 applicants to receive licenses.
“Licenses that admit a select few to such a lucrative enterprise must be made in a way that is open and transparent,” said attorney Vincent Savarese who wrote the constitutional challenge.
Last fall, the state opened up its applications for existing dispensaries to get more licenses. The dispensaries are judged on a point system and licenses are awarded to the highest scoring businesses. Dispensaries can score in nine categories including organizational structure, evidence of the amount of taxes paid to the state of Nevada or its political subdivisions, financial plan, and varying documentation. Dispensaries can score a maximum of 250 points but no one knows the criteria of why a dispensary would receive a low score in any category.
“We’ve got some amazing successful operators that applied for these licenses,” said Robert Casillas with Cannabis Commerce Group Consulting. “Now that the results are out, no one is happy…”
Casillas said he’s been consulting for years in Las Vegas and is familiar with more than half the dispensaries around the Valley. He claimed particular dispensaries were granted up to 9, 10 and 11 licenses while other qualified dispensaries received zero licenses.
“It wasn’t done correctly and something has to be done,” said Casillas. “When you throw that many great groups [together], there’s going to be a maximum of points that everyone’s going to earn based on common sense criteria within the industry. So who’s making the decision when you max out of those points? Who is going to get the licenses? What was the criteria. That’s what we want to know.”
The firm representing the 11 dispensaries in the lawsuit went before a judge on Monday, asking that the state put a freeze on licensing and also take back the licenses it recently issued until litigation is resolved. The judge is expected to make a ruling May 24. On Monday, April 22, a judge will decide whether or not to combine five pending lawsuits against the Nevada Department of Taxation.
Gov. Steve Sisolak commented on the pending litigation:
I understand the frustrations of many marijuana license applicants with the current licensing process, and my administration is committed to enacting meaningful reforms to increase transparency in the marijuana licensing process, starting with an amendment offered by the Department of Taxation to SB32 that would shed light on the methodology used by the Department in granting licenses. My office continues to work with the Department of Taxation to take aggressive steps to improve transparency on multiple levels.
Casillas said he and number of other dispensaries are calling for a re-score once the department reveals its criteria.
“Re-score [dispensaries] and issue [licenses] accordingly,” said Casillas. “Give Nevadans, the operators, the transparency this industry needs right now.”