UPDATE: 5:10 p.m.

The director of the Nevada Department of Taxation has determined there aren’t enough liquor distributors to serve the state’s recreational marijuana market, so they shouldn’t have exclusive rights to distribution.

Agency Director Deonne Contine’s determination, which came after a three-hour-long hearing that featured economic projections of marijuana demand and stories from dispensaries and liquor distributors, means her department can start processing some of the dozens of distribution applications filed by non-liquor licensees. She said some applications could be through the process in a week.

The decision could be appealed to the Nevada Tax Commission, although it wasn’t immediately clear if the liquor distributors would appeal and whether they would seek a stay on Contine’s decision.

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Nevada officials could decide Thursday whether to allow marijuana companies to deliver their own product — now the sole province of liquor distributors — under a newly adopted set of emergency regulations.

The Nevada Department of Taxation scheduled a hearing for 1 p.m. in Carson City and Henderson to determine whether issuing distribution licenses only to liquor distributors has led to insufficient distributors serving the nascent recreational market. So far, six liquor licensees have been approved to deliver product from cultivation and manufacturing sites to the 50 recreational dispensaries currently open in Nevada. Nine have applied.

A new framework for making that determination was approved through emergency regulations last month amid legal concerns that the prior process was vague and paved the way for arbitrary decisions from the state.

At the Thursday meeting, the department will present an analysis of data it has gathered from the liquor and marijuana industries over the past month and have experts — including the agency’s economist — testify about the distribution issue, according to agency spokeswoman Stephanie Klapstein. Proponents and opponents of widening the pool of potential distributors will also be allowed to testify.

The determination will be the latest development in a five-month-long dispute between the taxation agency and smaller-scale liquor distributors, who argue the ballot measure approved by voters in November gives them an exclusive right to transport the product from cultivation and production facilities to retail stores for the first 18 months of recreational sales.

A judge sided with them in a court battle, ordering an injunction that prohibits non-liquor licensees from getting a distribution license for the time being. He cited vagueness in regulations on how the state would make a determination that the pool of liquor distributors is insufficient. The matter is being appealed at the Nevada Supreme Court.

Liquor distributors say they want to be involved to provide a layer of independence in the supply chain, similar to the liquor industry’s Prohibition-era three-tier system where ownership in multiple tiers is banned. If they are determined to be insufficient, marijuana companies could be fully vertically integrated — meaning entities with the same owners could be involved in cultivation, production, delivery and retail sales.

The emergency regulations were developed amid reports that dispensaries were seeing high demand for newly legal weed and running into supply issues.

The regulation created a structure for the taxation department to determine whether there are an insufficient number of liquor distributors to serve the market based on factors such as historical demand for marijuana distribution in the past three months, projections of future demand and the operational needs of dispensaries, including frequent deliveries and quick turnaround time.

Attorney Kevin Benson of the Independent Alcohol Distributors of Nevada, which has fought the department on the matter, criticized the process leading up to the Thursday determination meeting as “pretty opaque.”