… of what, exactly? Water? Tax revenues? NFL apologists? Casino chips? Harry Reid relatives in state government? What kind of shortage qualifies for a statement of emergency in the great state of Nevada?
You’ll never guess [see second update below]:
Nevada’s governor has endorsed a state of emergency declared for recreational marijuana regulations, after the state’s tax authority declared that many stores are running out of weed.
The Nevada Tax Commission said in a statement it will consider emergency regulations on July 13 to provide a structure for marijuana distribution to retailers. It would allow for liquor wholesalers to get in on the marijuana business.
“Based on reports of adult-use marijuana sales already far exceeding the industry’s expectations at the state’s 47 licensed retail marijuana stores, and the reality that many stores are running out of inventory, the Department must address the lack of distributors immediately,” the statement said. “Some establishments report the need for delivery within the next several days.”
Funny, I don’t recall shortages of this commodity when I was growing up and no one seriously argued for its legalization. In fact, as I recall, government officials were far more inclined to declare emergencies over the ease of access than over shortages of it back in the day.
The problem in Nevada appears to be unanticipated demand combined with government restrictions on distribution. The law just went into effect on July 1 and consumers have been lining up around the clock for access to the freshly legalized intoxicant. Lawful distributors can’t get the product to the stores quickly enough The emergency action being contemplated is a relaxation of the rules that will allow new distributors to participate in the marijuana market, rather than only the currently approved liquor distributors. That has been the subject of a court fight over the last few months:
As the state law legalizing recreational marijuana was passed in November, wholesale alcohol distributors were promised exclusive rights to transport wholesale marijuana for the first 18 months of legal sales. Since November, the state has received seven applications from liquor wholesalers.
“We continue to work with the liquor wholesalers who have applied for distribution licenses, but most don’t yet meet the requirements that would allow us to license them. Even as we attempted to schedule the final facility inspection for one of the applicants this week, they told us their facility was not ready and declined the inspection,” Klapstein said.
The department tried to address the issue earlier this year by opening the application process up to the businesses that have been transporting medical marijuana and other marijuana businesses, but an 11th hour court battle ended in an order only to accept applications from wholesale alcohol distributors. The taxation department since appealed the court’s decision.
The result? A bottleneck by government that threatens to damage the markets they just launched. With millions of dollars of tax revenue at stake, the tax authority warns that the failure will “lead to a hole in the state’s school budget,” which didn’t seem to be a problem before the state legalized marijuana.
In other words, Nevada is about to declare a state of emergency over a lack of marijuana — and are doing so for the children. Man, I never thought I’d hear that argument.
The target date for emergency action is July 13th, lest Nevada’s consumers have their mellows unduly harshed for too long. By the way, that’s one day after Attorney General Jeff Sessions is due to speak in Nevada to discuss sanctuary cities and crime. Does anyone want to hear Sessions’ take on an emergency over a lack of marijuana for sale in Nevada?
Update: More irony from the dean of Nevada political media, Jon Ralston:
— Jon Ralston (@RalstonReports) July 10, 2017
Update: The governor’s office sent a friendly clarification about the difference between a state of emergency and a statement of emergency by a regulatory agency. Governor Sandoval’s director of communications authorized me to include this statement:
Governor Sandoval did not declare a state of emergency due to a marijuana shortage in Nevada. The Governor has continuously called for a well-regulated, restricted and respected recreational marijuana industry. Pursuant to the Nevada Administrative Procedure Act, the Governor endorsed the Department of Taxation’s Statement of Emergency to allow it to adopt temporary regulations regarding the licensing of marijuana distributors which are required to transport marijuana to a retail store. The next step for the Department of Taxation is to enact permanent regulations on the same topic.
The adoption of an emergency regulation is not uncommon and is used in narrow circumstances that allow for a prompt response to a temporary situation.
Accordingly, I’ve adjusted the headline and the lead paragraph to note the difference. I certainly appreciate the friendly engagement from Gov. Sandoval’s office.