*NOTICE*
The Department has implemented a new case management system and is currently working to update its list of owners, officers, and board memebers. Please check back shortly.
Unprecedented Release of Cannabis Licensing Information
In an ongoing effort to improve transparency in cannabis licensing and the industry, Governor Steve Sisolak and Executive
Director of Taxation, Melanie Young are pleased to announce the passage of Senate Bill 32, permitting the release of details regarding who applied for licenses, who received licenses, their ranking, score and the process of issuing marijuana license.
“This
new policy is an important step in a multi-pronged approach to greater
transparency in marijuana licensing under my administration. As our legal
marijuana industry has evolved and flourished, it’s more important than ever
that the industry and the public enjoy the benefits of a completely open and
transparent process from licensing to operation so that our marijuana industry
can become the gold standard in the nation.”
- Governor
Steve Sisolak.
"Until now, information
about marijuana applicants and licensees has been strictly confidential. This
is the result of merging two statutory and regulatory structures that deal with
highly sensitive information: medical marijuana, which necessarily protects
patients and providers, and taxation, which protects the financial and
proprietary information of Nevada’s businesses."
-Executive Director of Taxation Melanie Young
Documents released on this site include:
- Names of current owners of cannabis establishments.
- Information regarding the evaluators of the license applications.
- The use
of state contractors for license application evaluation.
- The tools
contractors used to evaluate applications.
- Methods contractors
employed to evaluate applications.
- Companies that applied
for licenses.
- Names of owners,
officers and board members that applied.
- Who was awarded
licenses and who was not.
- Applicant scores.
Open Letter from Executive Director Young
The Department of Taxation staff is tasked with the fair and efficient collection of approximately 7 billion dollars annually. Cannabis licensing and regulation is a small, but significant Department function. Since 2015, the State has successfully evaluated thousands of license applications and successfully issued more than 900 licenses to operate cannabis establishments. Recently, intense competition for retail licenses has led to applicants challenging the process the state has implemented to issue licenses.
Questions have been raised regarding the use of contractors to evaluate license applications. This process has been in place since 2015 for cannabis licensing and use of contractors is a common practice to accomplish temporary tasks efficiently for the state. All state agencies are approved by the Department of Administration to use temporary hiring agencies including Manpower. The Marijuana Enforcement Division does not have full-time staff dedicated to application evaluation and the Division could not be expected to pull nearly a quarter of its staff from regular duties regulating the industry to evaluate applications for three months.
In June 2018, the Department was approved by the Interim Finance Committee to use Manpower as a vehicle for hiring qualified temporary employees to evaluate license applications. The state hired a small number of highly-qualified individuals with decades of expertise. This method translated to more consistency and efficiency in the cannabis licensing process to meet legally-mandated deadlines. Training involved weeks pouring over thousands of documents and intense one-on-one and group evaluation activities to prepare contractors for scoring applications.
There are many questions about the scoring tools. This is the result of Nevadans' foresight anticipating extreme demand for cannabis licenses. Nevada has a merit-based award system laid out by Nevada Revised Statutes and Nevada Administrative Code. The law requires that applicants be evaluated based on financial, building and owner information. Applications are scored and ranked accordingly. There are no provisions in the law to issue licenses to low-scoring applicants. This structure has led to a strong cannabis industry in Nevada.
Now, under the leadership of Governor Sisolak, taxpayer confidentiality rules in Senate Bill 32 (SB32) have been amended. That means the public can see who is operating cannabis establishments in Nevada and who applied for licenses. We hope that you will participate in this new era of transparency in Nevada's cannabis industry by taking the time to review information on this site.
If you have questions, please send them to: Marijuana@tax.state.nv.us
Sincerely,
Melanie Young
Executive Director
Nevada Department of Taxation
September 2018 Application Period Facts
Nevada has a unique competitive and rigorous scoring process for licenses that is outlined by law, requiring analysis of financials, business plans and qualifications of the applicants. By law, the highest scoring applicants are awarded a conditional licenses.
| Retail Dispensary licenses Available: |
64 |
| Application period: |
10 days |
| Evaluation & scoring period: |
90 days |
| Number of applications received: |
462 |
| Number of applicants: |
127 |
| Number of jurisdictions: |
17 |
| Number of applicants awarded licenses: |
17 |
| Number of conditional licenses awarded: |
61 |
| Awardees with diversity in ownership, officers or board members |
59% |
| Awardees that didn't previously have a dispensary |
53% |
Sept. 2018 Application Evaluator Qualifications
The Department of Taxation was approved to identify, hire and train highly qualified temporary contractors to evaluate and score applications. The contractors were housed at the Carson City Department of Taxation Office under the supervision of Marijuana Enforcement Division staff. The contractors' qualifications are outlined below.
Sept. 2018 Application Period Transparency
Was diversity considered in the application process?
Yes. On the right-hand column of this screen, see page 5 of the "Application Scoring Tool - Organizational Structure."
Why did 17 applicants win all
of the 61 licenses?
Because
of intense competition for licenses, Nevada law & regulations require a competitive scoring
process for licenses. Applicants were scored on 6 categories outlined in the law including: Financial Resources; Organizational Structure; Impact on the Community; Building Plans, Size and Adequacy; Care, Quality and Safekeeping of cannabis; and Taxes and Financial Contributions. The applicants with the highest score in
those areas are awarded licenses by law. Applicants were aware of the
competitive award process. 127 cannabis license applicants submitted an
average of 3 applications each totaling 462 applications. There is no provision
in Nevada law to award licenses to low-scoring applicants.
Why were temporary contractors used to evaluate applications?
State
agencies use qualified contractors on a daily basis to efficiently complete
temporary tasks. Contractors are approved for use by the Nevada System of
Higher Education, the Court System, The Legislative Counsel Bureau and all
Political Subdivisions within the State. That includes the Department of Taxation. Similar to all
other contract work in other state departments, the Marijuana Enforcement
Division identified, hired and trained highly-qualified contract employees to
score applications and administrative assistants to provide support.
How
were the application reviewers “highly qualified”?
The
Department sought contract employees with specific skills and experience that
directly related to the substance of what they would be evaluating in the
applications. The application evaluators met the State of Nevada job specifications for Accountants; Fire & Life Safety Inspector; Marijuana Program Inspector; Personnel Officer and Administrative Assistants. The minimum qualifications of each evaluator are
listed above, including information demonstrating that candidates exceeded the qualifications.
Why
didn’t the Department use its own employees?
The
Marijuana Enforcement Division of the Department of Taxation does not have budgeted
full-time positions dedicated to license application evaluation. Staff is
dedicated to other statutory and regulation-mandated duties such as auditing,
inspecting, and investigating establishments; reviewing advertising and
packaging submissions; reviewing and processing ownership transfers; collecting
taxes; and processing agent card applications and renewals. Given the volume of
applications and workload the Department anticipated for this round of
licensing, the Division could not divert staff away from their existing
duties to focus on application review. Additionally, by using contract
employees to review and score applications, the Department could ensure an
objective and independent process carried out by reviewers with no pre-existing
relationships to, or insider knowledge, of the applicants.
Why did
the Department use Manpower?
The State of Nevada has an existing contract with Manpower to hire employees to fulfill
temporary needs. After Taxation staff identified and interviewed the candidates of choice, those
candidates registered through Manpower, allowing the Department to hire them
under the existing contract.
Has the
state done this before?
Yes.
During the first round of medical marijuana registration certificate
applications in 2014, the Division of Public and Behavioral Health—which was
the licensing and regulatory body at the time—used an employment agency
contract to hire employees for reviewing applications.
Did the
Department have to get any kind of approval to use contract employees?
Yes. In
June of 2018, the Department appeared before the Legislative Interim Finance
Committee (IFC) to seek funding approval to hire the contract employees for
reviewing and scoring the applications. IFC granted that approval.
What
kind of training did the Department provide to the application reviewers?
Over a
two-week period, the application reviewers were trained by numerous staff from the Department of Taxation, Marijuana Enforcement Division, including the Program Manager, Program Supervisor, Education and
Information Officer, Chief Compliance Officer, Program Officers, Auditors, Investigators, Inspectors and Administrative Assistants. The application
reviewers were trained on the history of cannabis in the state, marijuana laws
and regulations, the contents of the application, and tools for reviewing and
scoring.
To
familiarize the evaluators with the contents of applications and the process
for reviewing and scoring them, evaluators reviewed and scored 10 applications
from previous application periods. The applications contained hundreds of pages
each. This created a mock application period for reviewing and scoring. The
mock applications consisted of applications that should have resulted in low,
medium, and high scores. Evaluators worked with Marijuana Enforcement Division
staff to score the mock applications. By the end of the training, they were
familiar with a range of application qualities, their contents, criteria, how
to apply evaluation tools (score sheets) and were able to process applications
independently in a timely manner.
What
was the process the evaluators used to review and score applications?
Evaluators
were split into two teams. One team reviewed and scored
"non-identified" sections of applications (they did not know the
identity of the applicants). The other team reviewed and scored the
"identified" sections of the applications (the content of the section
included the identity of the applicants by necessity).
The
independence of each evaluator was a key component to maintaining the integrity of the
process. Each reviewer independently reviewed each application thoroughly and
came to an independent scoring conclusion.
During
the evaluation period, the reviewers were placed in three offices: one office
for the three-person Identified-Team reviewers, another office for the three-person Non-Identified Team reviewers, and a third office for the Administrative Assistants (one assistant for each team). The Identified and Non-Identified reviewers were not
permitted to discuss any application details with the other team to maintain separation and confidentiality for an independent evaluation process.
Team
members individually reviewed applications, assigned scores to each criteria
section, and then held a team meeting between the three reviewers on that team to
see how closely their scores aligned. If scores differed in any criteria
section of the application by three or more points, they were required to
re-review the section and discuss until they arrived at a scoring consensus.
Following the three-person evaluation team meeting, the reviewers’ scores for each
criteria section of the application were averaged to score that
section.
Scores for all criteria
sections were then totaled across both the identified and non-identified
sections to arrive at a total score for the entire application.
What
criteria did the reviewers look at, and what were the point values for the
criteria?
The
following are the criteria sections that were reviewed and scored. Each section
also contained a further breakdown of weighted components that made up the
total possible point value for the section. These criteria sections and point
values—along with the citations of administrative code for the criteria— were
provided in the application. All applicants were aware of the criteria and used
the criteria to preparing their applications. 250 points were possible per
applications. Virtually the same scoring tool was applied in 2014.
Non-identified
criteria (125 points):
Integrated plan for the care, quality, and safekeeping of
marijuana from seed to sale - 40 points
Plan to staff, educate, and manage the proposed marijuana
establishment on a daily basis - 30 points
Operating procedures for the electronic verification system and
description of the cannabis inventory control system - 20 points
Adequacy of the size of the proposed cannabis establishment to
serve the needs of persons who are authorized to engage in the use of cannabis - 20 points
Proposal demonstrating the likely impact of the establishment in
the community in which it will be located and the manner in which the
establishment would meet the needs of the persons who are authorized to use cannabis - 15 points
Identified criteria (125
points):
Proposed organizational structure and information concerning each
owner, officer, and board member (including racial, ethnic, and gender
diversity) – 60 points
Evidence of the amount of taxes paid or other beneficial financial
contributions made to the state or its political subdivisions – 25 points
Financial plan and documentation – 30 points
Documentation from a financial institution that demonstrates the
applicant has at least $250,000 in liquid assets and the source of those funds
– 10 points
Who
applied for cannabis licenses and why weren't their names public?
Until
the passage of Senate Bill 32, information about cannabis applicants and
licensees was strictly confidential. This is the result of merging two
statutory and regulatory structures that deal with highly sensitive
information: medical cannabis, which necessarily protects patients and
providers, and taxation, which protects the financial and proprietary
information of Nevada’s businesses.
All taxpayers in Nevada are protected by confidentiality statutes. A taxpayer
is defined by NRS 360.255 subsection 1: The records and files of the Department
concerning the administration or collection of any tax, fee, assessment or
other amount required by law to be collected are confidential and privileged.
Therefore the Department is unable to disclose the name of the business that
paid the marijuana license application fee. The Department requested applicants
to provide a waiver permitting the release of their names, however, of the 127
applicants, only 8 returned the waiver and consented to the release of their
names. The Department, in conjunction with the Office of the Governor and
Legislature has amended SB32 to allow for the release of cannabis business
names.
Sept. 2018 Application Period Timeline
Date
|
Activity
|
June 2018
|
Legislative Interim Finance Committee approves funding to hire contract employees to review and score retail marijuana store applications.
|
July 5
|
Notice of Intent to Accept Applications posted to Department's website
Application posted to Department's website, including criteria categories to be scored and their respective point values.
|
July - Aug.
|
Identify candidates for application evaluation positions, review resumes and conduct interviews.
|
Aug. 28
|
Contract score reviewers' employment and orientation begins.
|
Aug. 28 - Sep. 7
|
Evaluator training & preparation.
|
Sep. 7 - 20
|
10-day period during which applicants can submit applications.
|
Sep. - Nov.
|
Application review and scoring.
|
Nov.
|
Verifications conducted: Points of contact, Tax Identification Numbers, ownership, jurisdictional info, agent card background checks; Executive review of rankings.
|
Dec. 5, 2019
|
Team meets 90-day statutorily-required deadline, issuing 462 Conditional approvals and denials issued via USPS and email.
|
Jan. 9 - Mar. 5
|
Staff conducts score review meetings as outlined by NAC453D.
|
General Cannabis Licensing Questions
If you have questions or would like more information, please send an email to marijuana@tax.state.nv.us.