Nevada governor to tighten legal marijuana marketplace

Democratic Nevada Gov. Steve Sisolak announced plans on Friday to tighten control of the state's legal marijuana industry after reports that a foreign national contributed to two top state political candidates last year as they tried to dodge the rules to open a legal cannabis store.

Continue Reading Below

In a statement, Sisolak said there has been a "lack of oversight and inaction" of the recreational and medical pot industry by the state Marijuana Enforcement Division. He also said he is commissioning a multi-agency task force to "root out potential corruption or criminal influences in Nevada's marijuana marketplace."

Sisolak pointed to a federal indictment in New York, made public on Thursday, which alleged that Igor Fruman, a Ukrainian-born U.S. citizen identified as having "Russian roots" funneled $10,000 to the Republican campaigns of Adam Laxalt for Nevada governor and Wesley Duncan for attorney general.

The indictment included a conspiracy charge against four men, including two with ties to Rudy Giuliani, President Trump's personal attorney, and the Ukraine investigation at the center of impeachment proceedings against Trump.

Laxalt and Duncan lost their statewide races and said via a spokesman on Thursday that they would return the donations they received a week ahead of the Nov. 2018 election from Fruman, a donor who - federal prosecutors allege - was acting on behalf of an unnamed foreign national.

Laxalt, via his spokesman Robert Uithoven, told the Associated Press that it is "absurd that the governor is trying to pin this on me."

He also accused Sisolak of accepting campaign money from marijuana businesses and failing "to clean up the problem while in office."

GET FOX BUSINESS ON THE GO BY CLICKING HERE

Sisolak’s statement acknowledged “illegal sales to minors, serious allegations of manipulated lab results and a licensing process mired in litigation.”

It said the governor will speed up oversight that was to be assigned to a yet-to-begin state Cannabis Compliance Board. Now, he plans to form a multi-state agency special task force to root out potential corruption or criminal influence in the state's marijuana marketplace.

"[Thursday’s] indictments and their connections to Nevada, in combination with ongoing issues in Nevada’s legalized marijuana industry – such as illegal sales to minors, serious allegations of manipulated lab results, and a licensing process mired in litigation – have led the Governor to expedite regulatory and enforcement measures," spokesman Ryan McInerney said in the statement.

This July 24, 2019 file photo shows Nevada Gov. Steve Sisolak speaks during a news conference at the summer meeting of the National Governors Association in Salt Lake City. (AP Photo/Rick Bowmer, File)

The governor’s office did not specify how the task force would operate or what agencies would be involved, citing a need to keep investigative and enforcement efforts confidential. It will investigate possible criminal behavior and regulatory misconduct and refer matters for criminal prosecution.

"(Thursday’s) indictments and their connections to Nevada, in combination with ongoing issues in Nevada’s legalized marijuana industry – such as illegal sales to minors, serious allegations of manipulated lab results, and a licensing process mired in litigation – have led the Governor to expedite regulatory and enforcement measures.”

- Nevada Gov. Steve Sisolak's statement on Friday

The task force will be “robust, real, significant and substantial, and will have power and authority to hold bad actors accountable,” Sisolak’s chief of staff, Michelle White, told the Las Vegas Review-Journal.

The governor said his office had been weighing an expedited enforcement effort even before the federal indictment, which included Fruman’s attempts to influence two of their politicians, was revealed on Thursday.

"Effective immediately, any marijuana entity — licensed or unlicensed — that violates the law will see swift and severe criminal and regulatory action," Sisolak's statement said.

The governor was "disappointed in the lack of oversight and ... inaction from the state over many years that led us to this critical juncture," according to the statement. It pointed to the "apparent absence of a single criminal referral by the Marijuana Enforcement Division since the inception of licensed marijuana sales, medical or recreational, in Nevada."

Nevada voters legalized medical marijuana in 2000 and separately approved its recreational in 2016.

CLICK HERE FOR THE ALL-NEW FOXBUSINESS.COM

The Associated Press contributed to this report.