Panel OKs loan for Nevada recreational marijuana regulation

CARSON CITY — A legislative panel approved Thursday a nearly $900,000 loan to begin implementation of recreational marijuana sales, and authorized a separate money transfer for costs associated with a breach of Nevada’s medical pot system.

The Legislature’s Interim Finance Committee approved the loan requested by the Department of Taxation to begin the process of writing regulations and setting up a regulatory structure to oversee cultivation, testing, processing and retail sales of recreational pot.

Voters approved the legalization of adult use of marijuana in November. The ballot initiative put the Taxation Department in charge of implementing it by next year. The loan from the IFC’s contingency fund will be paid back as sales generate tax revenues.

Taxation Director Deonne Contine told lawmakers the loan is necessary to hire staff and get the process rolling.

“If we don’t start now, we’re not going to be ready by Jan. 1, 2018,” she said.

State Sen. Ben Kieckhefer, R-Reno, and Assemblyman John Hambrick, R-Las Vegas, voted against the expenditure, citing uncertainty in the administration of Republican President Donald Trump.

Trump’s nominee for attorney general, Jeff Sessions, is opposed to legalization of marijuana, which is illegal under federal law.

“It wouldn’t be too hard if the federal government tried to shut this all down,” Kieckhefer said.

Members of the IFC also approved transferring $122,400 from a reserve account within the state’s medical marijuana program for costs associated with last month’s breach of its online portal.

Joe Pollock, deputy administrator of the medical marijuana program, said a big share of the funds would cover the state’s insurance deductible for notifying registrants about the breach and providing credit monitoring services.

Pollock said the agency was notified the program portal had vulnerabilities and took the site down as a precaution in early December while it performed security scans and repairs.

After the portal was reactivated, the state was informed by technology website ZDNet that the portal was vulnerable and data was accessed. He acknowledged that the data available was “extensive,” though it’s unknown whether any information was stolen. He said an investigation is ongoing.

“We don’t know if the information was used for evil intent,” he said.

The portal is used by dispensaries to submit applications for new or renewed medical marijuana cards and to ensure patients don’t buy more than legally allowed. That portal also stores the records for people who have applied to open or work at a medical marijuana establishment in the state.

The patient registry is back online and available to the public, and other security measures are being taken, Pollock said.

Contact Sandra Chereb at schereb@reviewjournal.com. Follow @SandraChereb on Twitter.