Allegations of cover-up emerge during hearing over state’s marijuana licensing process

Local News

LAS VEGAS (KLAS) — Allegations of a cover-up emerge during a lengthy hearing over the state’s marijuana licensing process. Several lawsuits are seeking to halt the expansion of the state’s marijuana industry from several dispensaries that were not granted new dispensary licenses.

What was supposed to be a four-day court hearing over many lawsuits against the Nevada Department of Taxation has stretched out over two months. The issue is over whether the department adequately awarded some 61 licenses for new marijuana dispensaries.

Nearly two-thirds of the new licenses went to just six companies, leading to lawsuits and questions about the process.

Plaintiffs have alleged bias in the selection process and raised an issue with the use of temporary workers to score applications. A review of court testimony shows another problem, which are allegations of a coverup of marijuana sales to underage customers.

“It wasn’t disclosed in their applications that they had engaged in this activity,” said Vincent Savarese, a for the plaintiffs.

Savarese is one of the attorneys representing more than a dozen dispensaries in one of the lawsuits who were denied applications. According to Savarese, an email was uncovered showing that the Department of Taxation staff knew of three instances of underage sales by employees of one of the companies that was later awarded several new licenses. The document during the court proceedings.

“When the director, Mr. Pupo, found out about it, he discontinued the investigation, and more or less prohibited them from continuing,” Savarese said.

Department of Taxation employee Karalin Cronkhite testified that she had assigned cases for investigation, but was told by Deputy Director Jorge Pupo to “hold off on that.” Savarese says as a result of that, nothing ever came about but should have, because he thinks it should have affected whether licenses should have been issued.

“It’s a compliance question,” Savarese said. “It’s a failure to comply with regulatory and legal standards.”

8 News NOW checked the state’s scoring criteria, and specific to application scores for those who applied for new dispensary licenses, compliance issues are not listed. However, it does not address how those would affect the standing of a current licensee.

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