Booze Wholesalers Cause Emergency in Nevada Pot Sales

Believe me when I tell you, I am very familiar with State of Emergencies. They are no fun.

I got my BA at Humboldt State University and lived through the now legendary “Blight of ’86”. No one really knows what exactly happened to cause it. But we all lived through those harrowing days. All the local dealers had the same story: “Sorry, No dope.” Even Brent, the most famous dealer on campus was out…For weeks. Growers stayed in the hills. Dealers were nowhere to be seen. Students were regularly caught scrounging their green shag for small kernels of bud (that’s an arduous process, let me tell you). And not a small number of professors were giving remarkably boring lectures. It was hell.

My understanding is that when the Blight finally ended right before Spring Break it was due to a few business students taking a caravan south all the way to San Diego and returning with just enough pot to keep a small, insular collection of scholars in weed. It was harrowing.

This is all to say that I feel for the people of Nevada who are going through a similar State of Emergency. Apparently, just days after cannabis legalization there is a severe shortage of pot and dispensaries are saying they’ll run out completely if something isn’t done.

The problem is the alcohol wholesalers.

This isn’t a joke. Honest.

It turns out that when Nevada voted to legalize recreational marijuana sales, one provision of the law as that alcohol wholesalers had first right of refusal on distributing pot from producers to retailers for the first 18 months of legalization. Sound familiar? However, when the state sent out notices asking for wholesalers to step up, something like seven did and few of those didn’t qualify, so the state opened distribution licenses up to non-alcohol wholesalers in order to assure there would be enough in the middle tier to distribute the newly legal drug.

Well, the alcohol wholesalers didn’t like that and sued. They won, but the state has appealed to the Nevada Supreme Court. None of this matters to cannabis retailers who are running out of product and won’t be able to meet their bills and will be forced to layout workers. And the state isn’t too happy. Estimates are that the state brought in more than $1 million in taxes in the first 4 days of legalized sales.

So, the governor has declared a state of emergency, which will lead to the licensing of non-alcohol wholesalers to help move product from producers to retailers.

I don’t mean to be the “Guy who told you so”, but I told you so. A year ago I warned the cannabis industry to beware the wholesaler. “They’ll screw you”.


5 Responses

  1. Steve - July 11, 2017

    Being screwed by a distributor/wholesaler is no different than being screwed by a politician; it is all about the greenbacks being shoved to the middle of the proverbial table with the politicians being the croupier. As long as there is politics there will distributors for wine/beer/spirits and now pot for NV.. Taxes are a straight forward opportunity for politicians to generate revenue for their tenures.But politicians need money from distributors to get elected/re-elected. Pot is just to big a deal to be left alone-a new golden goose has been hatched..

  2. Gabriel Froymovich - July 12, 2017

    Now, if only the Governor will declare a state of emergency and circumvent these same rent-seekers to deliver alcohol to the population via free market mechanisms…

  3. James lee - July 12, 2017

    This is a very interesting article. Do you see the cannabis industry going in the same direction as the alcohol industry with the three-tier system? If so, i suppose it is a good time to enter the distribution business to be the next Southern of cannabis 🙂

  4. Richard V Reader - July 13, 2017

    Helps to explain why I bought a home in Vegas, but never moved there.
    Nevada knows how to really screw up everything that could be good.

  5. Richard V Reader - July 13, 2017

    Can’t I just get it delivered by Amazon curbside at Whole Foods, or by InstaCart?

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