Nevada’s cannabis industry might have gotten off to a great start, but the state is now being slammed with a number of lawsuits regarding secrecy issues with awarded cannabis retail licenses.

Possessing such a license permits a business to legally sell cannabis in the state, where weed was officially legalized in 2017 under the terms of the Nevada Marijuana Legalization Initiative.

Numerous companies have filed lawsuits against the state tax department. They say that the criteria officials take into consideration when awarding licenses has not been specified. Because of this, companies are complaining that the state may be unfairly awarding licenses dependent on their personal criteria, rather than an official set of criteria outlined by state law.

The business owners who filed a lawsuit against Nevada’s cannabis industry say that the state has not divulged any information in relation to who received permission to sell weed to adults in-state; the majority of which are not residents, but tourists hoping to enjoy Nevada’s fairly nascent cannabis industry.

Awarding of cannabis retail licenses put on hold in Nevada

On Monday, a judge will be requested to temporarily halt the review process for cannabis dispensary licenses in Nevada. The delay will continue until the courts confirm whether or not the criteria for selecting cannabis retailers is “arbitrary and capricious and violates the constitution.”

Lawmakers are currently contemplating whether or not cannabis lounges should be allowed on or close to the Las Vegas strip. This issue will also be focused on during the hearing.

Gov. Steve Sisolak on Friday spoke about how he recognized “the frustrations of many [cannabis] license applicants with the current licensing process” and backed legislation that he believes will “shed light on the methodology used … in granting licenses.”

Nevada’s Democratic governor was elected in November 2018, when he urged for a state [cannabis] regulatory program like Nevada’s Gaming Control Board, which is in charge of regulating casino licensing. Sisolak has an advisory panel that is in the process of putting together a Cannabis Compliance Board.

Hundreds of thousands of dollars at stake

The state boasts a successful cannabis industry, but it now faces losing hundreds of thousands of dollars. In the first year after adult-use cannabis sales kicked off in July 2017, almost $425 million was pulled in by 61 dispensaries statewide. Medical cannabis sales harvested an extra $105 million for Nevada’s economy in that same year.

Taxes on adult-use sales totaled $42.5 million, with an additional $27.5 million being funneled into an account for schools. In the final six months of last year, adult-use cannabis dispensaries accrued $884 million in sales, with $72 million of that amount being claimed by the state for taxes on recreational cannabis sales.

Currently, 65 cannabis retail stores are scattered across the state

Monday’s court hearing will be held in Clark County District Court. Attorneys involved in six lawsuits filed against Nevada’s Taxation Department are expected to attend, as they fight a legal battle on behalf of dozens of pot companies.

“I’m not saying anybody corruptly got a license,” Savarese affirmed. “But I’m saying that if they had, the process is opaque enough to provide cover for it.”

In 2017, 11 of Savarese’s clients won dispensary licenses after a 2016 vote to expand cannabis access was approved in Nevada. He is optimistic that more businesses will be awarded licenses to sell cannabis in a retail setting.