Most Nevada alcohol distributors leery of distributing pot

Friday is the beginning of a roughly three-month process for a group to develop recommendations for how the state should regulate recreational marijuana.

The Marijuana Task Force, created by executive order, will work out details ranging from how to tax marijuana to how to label marijuana products. Though there is a long list of topics that will need lengthy discussion, one thing is clear: Alcohol distributors will not control marijuana distribution.

“The way it’s written in the initiative is that for the first 18 months after we start accepting applications, (alcohol) wholesalers will have first dibs on distribution licenses,” Department of Taxation spokeswoman Stephanie Klapstein said.

But, sources say the majority of alcohol wholesalers aren’t interested in having first dibs — or any at all, mainly because of the risk it poses to their federal business licenses.

“As a national leader in the beverage alcohol distribution industry and a responsible state and federally licensed business, Southern Glazer’s is committed and bound to comply with the rules and regulations that govern our business,” said Cynthia Haas, a spokeswoman for Southern Glazer’s Wine & Spirits, the largest North American wine and spirits distribution company.

On Friday, Stephanie Sivertson, chief financial officer for Lee’s Discount Liquor, said company CEO Hae Un Lee hasn’t ruled it out.

“Mr. Lee is still exploring the opportunity,” she said. “He definitely is interested, but he is waiting for more details. The Department of Taxation hasn’t finished writing the rules and regulations.”

Other alcohol distribution companies, including Morrey Distributing and Bonanza Beverage Co., declined comment.

GETTING PUSHBACK

Matt Griffin, an attorney who helped to draft the initiative, said he got pushback for the “first-dibs clause,” which many, like Executive Director of the Nevada Wine Coalition Randi Thompson, saw as giving more power to alcohol distributors.

“These are the guys who are distributing alcohol, and now they are supposed to be the only ones who can now distribute marijuana,” Thompson said. “It’s giving a small group of distributors a lot of power.”

But, Griffin said that he never thought alcohol distributors would end up with exclusive rights to distribution and the intended fallback all along was for others to apply for distribution licenses. Giving alcohol wholesalers first claim to licenses was a way to make the initiative more politically viable, he said.

Liquor distributors gave about $87,500 of the $666,3000 the campaign received in 2015 to pass the measure, according to a 2015 contributions and expenses report for the Coalition to Regulate Marijuana Like Alcohol.

Alcohol wholesalers’ interest in recreational marijuana has waned since donating to the campaign.

“We fully expect that there are going to be fewer liquor wholesalers who are going to want to go out on a limb and get a distributors license for marijuana,” Klapstein said. “If you’re having to operate in that federal regulatory scheme, that risk (of federal punitive action) is still there.”

INTEREST WANED

Tim Conder, CEO of Blackbird, a delivery and transportation company for the medical marijuana industry in Nevada, said alcohol distributors’ interest waned likely because of the change in White House administrations.

“I think the risk to their alcohol licenses with the administration change doesn’t warrant the time commitment and the risk of tackling that now,” Conder said.

It also became clear to alcohol distributors that the marijuana industry in the state is still in its infancy, he said.

“I think a lot of people think of marijuana, and they think, ‘big money, very quickly,’” Conder said. “But it takes time, and hard work and commitment. A current (medical marijuana) patient, could be very soon a (recreational marijuana) consumer. But those relationships have to be cultivated and that’s not an overnight thing.”

CLARIFICATION: This story has been updated to include that Lee’s Discount Liquor hasn’t ruled out participation in recreational marijuana.

Contact Nicole Raz at nraz@reviewjournal.com or 702-380-4512. Follow @JournalistNikki on Twitter.