Guy Farmer: Jon Ralston: Corruption in the marijuana business

I’m writing about corruption in the marijuana business today just as the annual naked drug festival, Burning Man, comes to a close on the Black Rock Desert 90 miles north of Reno. What a coincidence!

Jon Ralston, the prize-winning editor of the online Nevada Independent, recently wrote that the FBI has called the burgeoning, nationwide marijuana industry — also known as Big Marijuana — “a public corruption threat.” “The corruption is more prevalent in western states where the licensing is decentralized,” the FBI declared. “It’s our role to ensure that the corruption doesn’t spread.” Well, good luck with that because the corruption is already underway in Nevada and other western states like California and Colorado.

Clark County District Judge Elizabeth Gonzalez recently ruled that Nevada’s 2017 pot shop licensing process was fatally flawed and ordered a freeze on the issuance of new licenses pending clarification of licensing requirements. Two former public officials are responsible for this sad state of affairs: ex-Gov. Brian Sandoval and his then-Tax Director, Deonne Contine, who fast-tracked the commercialization of recreational marijuana two years ago.

“I have no doubt the Feds were watching as a sensational civil trial wrapped up in District Court, one that featured losing applicants for pot licenses essentially alleging the state’s regulatory scheme is at best inept and at worst corrupt,” Ralston wrote. “Never has the comparison to gaming’s infancy been more apt. ...Much has been made of the similarities between the early days of the gambling industry in Nevada and the newly legalized marijuana economy in Nevada.”

Ralston compared state regulation of legal marijuana with the rigorous way then-Gov. Grant Sawyer enforced his “Hang Tough” gaming control policies in the 1960s. “Much has been made of the similarities between the early days of the gambling industry in Nevada and the newly legalized marijuana economy in Nevada,” Ralston wrote. “Never has the comparison to gaming’s infancy ... seemed more apt.”

Ralston is right about that, as evidenced by the truly erratic and inept process by which the Tax Department issued state licenses to pot shops two years ago.

“Using political juice to obtain a benefit is not illegal,” Ralston wrote, “(but) it’s practically a way of life in Nevada.” Is it ever.

Ralston noted that “pot remains illegal at the federal level and Nevada has never been more exposed and susceptible to federal intervention,” which represents a direct threat to Nevada’s gaming industry, still the cornerstone of our state’s economy. And that explains why the powerful Nevada Resort Association opposes “recreational” marijuana and so-called pot lounges. Wisely, our well-regulated casinos want nothing to do with Big Marijuana.

As a former spokesman for Sawyer’s law enforcement-based gaming control policies, I can tell you that Gov. Sisolak’s new Cannabis Compliance Board bears little if any resemblance to Sawyer’s highly respected gaming control agencies. In fact, Sisolak’s board would enable Big Marijuana, which wrote the recreational marijuana law, to consolidate control over hundreds of legal pot shops, including two in Carson City, and the state’s weak regulatory system.

In closing, let’s remember a warning issued by the Carson City Chamber of Commerce when recreational pot was legalized: “Despite purported benefits, marijuana has adverse effects in the form of increased healthcare costs (and) increased violence... and may send the wrong message to kids,” the Chamber statement said. Amen!

Guy W. Farmer is the Appeal’s senior political columnist.


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