Nevada pot dispensary license process ‘adequate,’ auditor says

CARSON CITY — Despite numerous lawsuits and allegations of corruption, a state audit found that Nevada’s much maligned process for doling out marijuana dispensary licenses has been fair.

“We concluded that this process, while not perfect, was adequate, and conditional licenses were granted to more qualified applicants,” executive branch auditor Saranjeet Bains told state officials during an audit committee meeting Thursday.

However, the audit outlined several areas that could be improved upon to increase transparency and trust as the state moves forward in expanding the number of cannabis dispensaries.

The audit’s findings come as the state faces several lawsuits from dozens of companies that were not awarded a state license to open a new retail marijuana dispensary last December and have criticized the process as being unfair. Some companies have argued in the suits that there is “widespread corruption” within the Department of Taxation, which awards the license and regulates marijuana in Nevada.

Bains identified three areas in particular for improvement:

— The state should hold public forums and allow for a period where prospective businesses could ask questions about their applications and get answers from the tax department before submitting their final application.

— The state should automate the scoring process, rather than having state employees enter the scoring data manually. Bains said they found no errors, but automation via software would improve efficiency and reduce the risk of data entry errors.

— The tax department should work with the Legislature to revise statutes to re-allocate licenses from jurisdictions that have chosen not to allow for marijuana sales and allow, most of which are rural counties and cities, and instead allow those licenses to go to governments that are currently selling cannabis. By doing that, Bains said, could increase state tax revenues by up to $27 million per year “all while promoting a more competitive industry.”

Gov. Steve Sisolak, who pushed for legislation to create a Cannabis Compliance Board and has expressed a desire to tighten regulations on the industry, said that the lack of platform for questions “was very troublesome.”

Contact Capital Bureau Chief Colton Lochhead at clochhead@reviewjournal.com or 775-461-3820. Follow @ColtonLochhead on Twitter.