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  • Temporary Restraining Order - Marijuana Regulations

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    Michelle Rindels
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    A temporary restraining order preventing the Nevada Department of Taxation from enforcing a May 31 deadline for submitting recreational marijuana license applications. The order was issued after a challenge from the Independent Alcohol Distributors of Nevada.

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    Temporary Restraining Order - Marijuana Regulations

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    A temporary restraining order preventing the Nevada Department of Taxation from enforcing a May 31 deadline for submitting recreational marijuana license applications. The order was issued after a challenge from the Independent Alcohol Distributors of Nevada.

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    5K views9 pages

    Temporary Restraining Order - Marijuana Regulations

    Uploaded by

    Michelle Rindels
    A temporary restraining order preventing the Nevada Department of Taxation from enforcing a May 31 deadline for submitting recreational marijuana license applications. The order was issued after a challenge from the Independent Alcohol Distributors of Nevada.

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
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    [ALLISON MacKENZIE, LTD. 42 Nn Division Sus P.O, Box 646, Cron Ci, NV 29702 "Telephone: 775) 47-4202, Fx: 75) 882-7 ‘Ea Alte laommrterte com REC'D & riLEL KEVIN BENSON, ESQ. ZITARY 30 PH 3: 58 ‘Nevada State Bar No. 9970, : ALLISON MacKENZIE, LTD. 402 North Division Street P.O. Box 646 Carson City, NV 89702 ‘Telephone: (775) 687-0202 Email: kbenson@allisonmeckenzie.com ‘Attorneys for Pain, Independent Alcohol Distibutors of Nevada IN THE FIRST JUDICIAL DISTRICT COURT OF THE STATE OF NEVADA IN AND FOR CARSON CITY INDEPENDENT ALCOHOL CaseNo: /7 0c oeo78 1G DISTRIBUTORS OF NEVADA, Plain, ‘TEMPORARY RESTRAINING ORDER NEVADA DEPARTMENT OF TAXATION, Defendans ‘This matter comes before the Cou onthe lan’ ex parte Motion for Temporary Restaining Order and fo Preliminary ljustion, Complaint for Declaratory and Injunive Rliet, an ‘the supporting affdavts and exhibits, Having reviewed these materials, the Court heeby GRANTS ‘he Appicton for Temporary Restaining Order. The following findings of fit, conclusion of lew, snd order are made based upon an expert motion and te therefore, made solely forthe purpose of snaking this order and may change based upon pleadings papers, evidence, and ergument yet to come 1 HINDINGS OF Fac 1. OaNovember 8, 2016, the votes of Need approved the “Inative to Regulate and Tex Marijuana” (he “Initiative”, TEMPORARY RESTRAINING ORDER ALLISON McKENZIE, LTD. «Nant Divison Ses PO, Box 646, Caen Cty, NV 89702 “Telephone: (779) 657-0202 Fas: (73) 8827018 ve ‘sites neater com 2] 2) 14 15] 16} 1] 18] 19] a n 24] a 2, The Department of Taxation is pursuing a “Yast track” program to attempt io get temporary ‘regulations in place so that legal sees of recreational marijuana can occur by July 1, 2017. 3. The Initive declared: "The People ofthe State of Nevada proclaim thet marijuana should be regulated in a manner similar to alcohol... inorder to achieve the goals of generating ‘x revenue while controlling and regulating the sale and use of marijuana. NRS 453D.020(3) (conphasis added), 4. Alcohol is regulated pursuant toa “thee-siered” system thet requires separation of roductin, distribution, and retail sales. See NRS 369,470 - 369.488; ste also “Liquor Taxes & FAQ” on the Tax Department's website (htos/tax.v.covEAQe/Liauor Taxes FAQ i, accessed My 12,2017), 5, This three-tiered system promotes he collection of excise taxes on aleohol and prevents Aversion or theft ofthe product. 6. Inorder to promote the regulstion of marijuana similar to sleakol, including to prevent 4iversion or thet ofthe product and to promote compliance with payment ofthe ax, the Initiative requires that, forthe first 18 months afer the Department of Taxation begins accepting applications for licenses for marijuana establishments, it may issue licenses for marijuana distributors only to persons ‘who hold an alcoho distribution license pursuant io NRS Chapter 368, “unless the Department Aetermines that an insufficient numberof marijuana distributors will esult from this limitation." NRS 453.2102). 7, Pursuant to NRS 4530120, the transport of marijuene between marijuana establishments (ich includes cultivators, procesors/ manuftctuers, test flies and retail stores) is permitted by the esiblshments themselves, except forthe transport of marijuana toa retail store, Only a licensed marijuana distributor may transport marijuana to «retail store, See NRS 453D.120(1)(4). mt mt un ant ut ‘TEMPORARY RESTRAINING ORDER ALLISON MacKENZIE, LTD, 402 Nat Division Sue P.O, Box 646, Carson Ci, NV B5702 “Tkphone: (775) 867-0202 Pax (75) 7918 ews tliconmacenc com 2 8, The law current limits the numberof retail marijuana stores as follows: xin nomiber oF tal Population of eouniy stores co 5700000 20, 100,000 ~ 700,007 4 5,000 ~ 100,000 2 $55,000) [NRS 453D.210(4)¢). 9. Consequently, curently, there can be a maximum of 106 retail marijuana stores inthe centre Sate, 10, There are thousands of reli Jocations slling wine, beer, end liquor in Neveds. U1, There are approximately 69 alcohol distributor licensed pursuant to NRS Chapter 369 who serve those thousands of customers, 12, Onaverags, JADON members serve 207 customers eech. 13, Onorabout November 18,2016, the Department of Taxation sent letters tothe alcohol Aistibuior licensees requesting that they call the Department to indicate their interestn applying for 8 license tobe a marijuane distributor. 14, Approximately 33 alcohol distributors responded indicating that they were interested in sxplying. 15. Several aleohol distributors called or emailed to follow up with the Deparment to find out het more needed to be done. The Department didnot request any further information, nor dd it ‘provide any direction o follow up, or how. 16, The Department never provided any notice that it had or would determine hat the number ‘ofalcoboldisuibutrs licensed pursuant to NRS Chepter 369 was insufficient 17, The Department never held any kindof public hesring on the issue of how meny istibutors are needed, the capacity of the alcohol distributors, and whether the numberof alcohol Aisibutors was sufilent 18 On March 14,2017, the Departinent posed Proposed Temporary Regulation TO02-17, ‘long with a notice that t would hold a workshop on the regulation on March 29, 2017 TEMPORARY RESTRAINING ORDER i : é aS. FH iy 4 5 g “Telephone: (75) 87002 Fx ‘EMail attese lwGlbemnactenie com a 2a 19, This inital version of Temporary Regulation 7002-17, Section 14, contained the statement; “Pursuant to NRS 453D.210(3), the Department has determined that there isan insufficient number of isuibutor licenses from persons holding a wholesale liquor dealer's license and will accept Aistibutor applications from individuals..." holding medical marijuana establishment cenifieates. Regulation T002-17P, available at tipd/wwn Jeg state vs Registe/201 TTemnpRepiterT002- UPadt 20, _IADON objected to this determination due to the lack of notice lack of evidence, and lack of opportunity o be heard. 21, On May 5,2017, the Department revised is regulation to remove the language siting that ‘he Department had already made a determination tha the number of liquor wholesalers i insuffi However, nel version sill contains language tat permits medical marijuana establishments and ersons inthe business of transporting medical marjuane to apply for masjuana distributor licenses, in| ‘dition to liquor wholesalers, 22. On May 8, 2017, the Tax Commission adopted the May 5,2017 version ofthe regulation (the "Regulation", 23, The Regulation sates that plications must be submitted by the Department no later than Mey 31,2017 24, ‘The application for marijuane dstibutos was made public on May 15,2017 25, The Regulation states that, afer May 31,2017, the Department may make a determination “that an insufficient number of distributor licenses would result from limiting licenses to persons holding a wholesale desler license pursunt to caper 369 of NRS.” 26. Applications for alcohol distribution licenses under NRS Chapter 369 are generally ‘pproved by counties and cites, not by the Sate. NRS 369.200. 27, ‘To avoid any issues with their TTB license a nuraber of ADON members formed new busines enites for entering nto the marijuana distibution busines, and eppli for disibutor licenses fom their respective counties and cites. 28, Several suc license applications were submited to Clark County, which was aware ofthe situation and this process. ‘TEMPORARY RESTRAINING ORDER. ALLISON MesKENZIE, LTD. 42 Non Divion Steet PO. Box 646, Canon Cy, NV BS "eleghane: (775) 647-4202 Fax: (75) 82-791 29, ‘Because the owners ofthese entitles met all of he applicable requirements to obiain

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