Nevada tax panel makes key decision on transporting pot

Nevada regulators said Tuesday they'll open up the state's pot distribution system to businesses other than alcohol wholesalers after rejecting an appeal by a liquor group that claims they have exclusive rights to transport marijuana from cultivators to retail stores.

The state Tax Commission voted unanimously to uphold a previous decision by the Tax Department to expand the licensing beyond alcohol distributors because they have been unable to keep up with overwhelming demand.

The distribution turf battle has been tied up in district court and administrative appeals since before legal recreational sales began July 1. And it may not be over yet.

Kevin Benson, a lawyer for the Independent Alcohol Distributors of Nevada, said after a five-hour hearing before the commission his group hasn't decided whether to file another lawsuit challenging the state's decision.

Tax Commissioner Thom Sheets said he anticipates that probably will happen.

Tax Department spokeswoman Stephanie Klapstein said the agency intends to start issuing formal licenses to non-alcohol distributors but doesn't know how soon that might happen.

"We are looking at that right now and discussing things with our legal counsel," she told The Associated Press late Tuesday.

Nevada's voter-approved law is unique among pot states in providing liquor wholesalers exclusive rights to transport marijuana for 18 months unless they could not keep up with demand.

To launch sales July 1, the state regulators adopted emergency rules to make it clear that some pot shops could serve as their own middlemen in certain circumstances.

State Tax Director Deonne Continue has complained that a delivery bottleneck was undermining an otherwise robust industry and the state revenue that comes with it. She insisted the tiny distribution network's inability to keep pace with demand is forcing up prices and sending buyers back to the black market.

A related case is still pending before the Nevada Supreme Court, which has scheduled a hearing Sept. 6. But it's unlikely to have a direct impact on the panel's decision on Tuesday because it centers primarily on generic administrative powers of state agencies.