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After Court Battle, Judge Freezes Permits For Marijuana Dispensaries

After a lengthy court battle, a judge in Nevada has frozen the permit process for several new recreational marijuana dispensary licenses while a lawsuit over them proceeds. 

Judge Elizabeth Gonzalez’ ruling affects the 61 new provisional licenses the Department of Taxation issued in 2018. 

Dozens of applicants who were left out are suing the state, saying the Nevada Department of Taxation’s process was riddled with mistakes. 

State of Nevada contributor John L Smith has been following the story.

“Right away, it means that the cannabis companies that did not get a  license will now have a next level to go to as they litigate,” he explained.

Before this judgment, Smith said, the Taxation Department had basically put a "permanent stamp on that license," but now that is not happening.

“It’s clear from how hard-fought this preliminary issue was that the interested parties are really in for a struggle,” Smith remarked.

He said during the hearing the process Judge Gonzalez asked a lot of questions and tried to make sense of all of it, “to see what was perhaps the best efforts of department learning how to regulate and license versus something that was sloppier or perhaps as was alleged in court paperwork seemed more shadowed by cozy relations.”

The question of corruption was not determined in the hearing. There also wasn't a clear answer on whether the department was competent in how it trained the temporary employees that reviewed and graded the applications.

One thing Judge Gonzalez was clear on was the question of violating the intent of Ballot Question 2, which legalized recreational cannabis in the first place.

She determined that the department violated the will of the people.

“That was one of the stronger statements in a pretty strongly worded document," Smith said, "She basically said, ‘you did not follow the people’s will when we voted for this.’ That’s really pretty thorough rebuke.”

Smith doesn't think the whole thing will be settled for a while. He noted there is a lot of money at stake, a lot of powerful attorneys involved and a lot of issues raised.

“I think they would rather go to war than to peace,” he quipped.

He believes the case will likely go to the State Supreme Court. 

Overall, people have been concerned that regulating the industry too much will hurt it - killing the golden goose.

Smith disagrees and compared the early days of the cannabis industry with the early days of gaming in Nevada.

“If you have to overregulate. If you have to double vet. If you have to go slower in that licensing process, it’s all better than being embarrassed as the state’s clearly been embarrassed on this issue.”


John L Smith, KNPR contributor 

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Prior to taking on the role of Broadcast Operations Manager in January 2021, Rachel was the senior producer of KNPR's State of Nevada program for 6 years. She helped compile newscasts and provided coverage for and about the people of Southern Nevada, as well as major events such as the October 1 shooting on the Las Vegas strip, protests of racial injustice, elections and more. Rachel graduated with a bachelor's degree of journalism and mass communications from New Mexico State University.