Tax Commission rules in favor of state in dispute with liquor companies over pot distribution
The Nevada Tax Commission has unanimously turned down an appeal from a group of liquor distributors that wants to claim exclusive rights to distribute recreational marijuana.
The commission on Tuesday rejected the Independent Alcohol Distributors of Nevada’s (IADON) appeal of an Aug. 10 decision by the Nevada Department of Taxation that concluded there weren’t enough liquor distributors to serve the recreational pot market and the distribution role should be open more widely.
IADON said state officials went into the hearing earlier this month with the predetermined conclusion that they’d rule against the liquor distributors, and that there wasn’t sufficient advance notice about the meeting’s process or an opportunity to cross-examine witnesses.
During a nearly five-hour hearing, officials from the attorney general’s office disputed that due process is required for such a hearing.
Liquor distributors and marijuana companies have gone head-to-head since mid-March over whether business-to-business marijuana transportation should be the purview of liquor licensees for the first 18 months of sales. Voters approved ballot measure language in 2016 specifying that only liquor licensees should have those rights, but included the caveat that it could be broadened if the agency determined there were an insufficient number of liquor licensees doing the work.
The department has now issued seven marijuana distribution licenses to liquor licensees; they are serving more than 50 retail stores. There are 29 transport vehicles that have passed a state inspection.
Liquor distributors say they’ve reached out to marijuana stores but are hitting dead ends trying to strike business deals. IADON contends that marijuana businesses are boycotting most liquor distributors and only using one provider — Blackbird, which did medical marijuana distribution in the past — to create the sense that there’s an insufficient number of liquor licensees.
Marijuana companies, many of whom testified they’re still having distribution problems, deny that they’re boycotting liquor businesses. They say they just want competent, experienced transportation companies to handle deliveries.
The entire case has also been moving through the courts and is scheduled for arguments before the Nevada Supreme Court on Sept. 6.