Nevada Cannabis Compliance Board Revokes Six CWNevada Licenses

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The newly established Nevada Cannabis Compliance Board (CCB) met for the first time on July 21, kickstarting a new era for the state’s industry. Notably, the board signed off on a disciplinary settlement that will revoke six of CWNevada’s 14 business licenses.

Watch the full video below.

CWNevada owns Canopi Cannabis Dispensaries, and the punishment against the company includes a $1.25-million fine and a $1.5-million bill for back taxes. The action stems from a series of lawsuits that accused CWNevada of withholding payment from its employees, breaking contracts with business partners and destroying evidence in ongoing civil cases. A state investigation into CWNevada’s activities began in 2018.

Proceeds from the sale of the eight remaining CWNevada licenses will benefit the employees in question. Company owner Brian Padgett will be barred from any of that incoming cash.

“These sums are extremely important to Nevada and its citizens given the state’s budget deficits and high unemployment rates,” court-appointed receiver Dotan Melech wrote in a letter to the CCB. Throughout the first part of the meeting, many such letters were read into the record. A number of local public officials and former CWNevada employees came out in support of the receiver’s proposed discipline.

A former security manager, for example, wrote that he had moved away from his family in Florida to take a “lucrative and secure job” with CWNevada. From early May to early July 2019, he was not paid. According to his public comment at the CCB meeting, he is owed approximately $12,000.

“In April [2019], it became evident that CWNevada was having financial issues,” he wrote. “My paydays started to come later and later, weeks apart even, until a month went by without receiving my pay. By this time my financial stresses had already begun and had become extremely unmanageable. Upper management assured us that loans were being secured that would bring payroll up to date. I was asked to hang in there and continue my work. Being loyal and having nowhere else to turn, I stuck it out.”

His employment came to a halt on July 7 of that summer. According to a signed affidavit, he has been homeless in Las Vegas ever since.

The other stories of former employees piled up.

While the CWNevada news took the marquee, the meeting itself was a major headline for the state’s cannabis industry. The board picks up where the Nevada Department of Taxation had left the cannabis industry, allowing the state to hone its oversight into a singular regulatory body.

The board lifted the freeze on cannabis business license transfers in the state, an October 2019 policy that Gov. Steve Sisolak had put in place following investigations into a tangentially related campaign finance crime spree. With license transfers back on the table now, the hope is that out-of-state investment will once again rejuvenate a marketplace that remains shocked by the economic shutdowns of the 2020 coronavirus pandemic.

Cannabis Compliance Board Executive Director Tyler Klimas said that the state has 92 open requests for license transfers in Nevada.

The Nevada Independent has reported extensively on those deals—and the concerning possibility that the freeze might have spiked some of them. 

While only three of the CCB seats have been filled (by Jerrie Merritt, Dennis Neilander and former Supreme Court of Nevada Chief Justice Michael Douglas), the governor-appointed board tees up a new era in the state’s cannabis industry. The CCB will meet again Aug. 25.

 

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