Hearing Resumes Before Judge in Pot License Lawsuits

Millions in Sales, Taxes, Profits at Stake

June 10, 2019 - 3:29 pm

LAS VEGAS (AP) — A court hearing resumed Monday before a state judge hearing complaints by dozens of businesses that Nevada's marijuana dispensary licensing process is unfair and unconstitutional.

After hearing a week of testimony last month, Clark County District Court Judge Elizabeth Gonzalez said she's scheduling another two days this week and at least two days next week to consider a bid by companies that weren't approved for new dispensaries to block the state from nearly doubling the number of sales outlets statewide.

Attorneys for the state and some companies that won licenses are defending the process and personnel used last year to evaluate and numerically rank 462 applications before the state Department of Taxation awarded 61 new dispensary licenses, nearly doubling the number statewide.

All sides acknowledge that millions of dollars in sales, taxes and profits are at stake. Most expect Gonzalez's ruling, at the conclusion of her fact-finding hearings, will be appealed to the state Supreme Court.

The latest state tax data, obtained Monday, show the 65 medical and recreational marijuana dispensaries currently open statewide reported more than $608 million in sales in the year ending March 30. A fiscal year total, ending this month, could top that figure.

Plaintiffs in at least seven lawsuits complain that the licensing process wasn't transparent, that temporary workers were improperly used to screen applicants and the state picked favored winners.

Some maintain the process was unconstitutional. Some seek a do-over. Some want financial damages.

Most complain that applicants' names were kept secret — until last month, when the Legislature passed and Democratic Gov. Steve Sisolak signed a law making that information public.

That showed that 16 companies won all 61 new pot dispensary licenses.

Taxation chief Melanie Young said that was because state law doesn't allow permits to go to low-scoring bidders.