Marijuana businesses in Nevada with dormant retail cannabis licenses are missing out on significant profits and the state is losing tax revenue.
That is according to testimony on Tuesday from Thrive co-owner Phillip Peckman and former Essence co-owner Alex Yemenidjian during a cannabis license injunction hearing at the Regional Justice Center in Las Vegas.
“With time, effort, the money spent for two locations, development and buildout, leasing and all the fees, we’ve spent probably a couple million dollars,” Peckman said. “Plus, with not being able to open the new license locations — any of the six — we’ve lost all that revenue and the state and local governments have lost out on tax money.”
After a monthlong break in testimony, the two sides arguing over an injunction issued to stop the state’s 2018 retail marijuana licensing process were back in court on Tuesday for about five hours.
In December, the state approved 61 conditional licenses out of a competitive pool of more than 460. A group comprising more than two-dozen rejected applicants filed the injunction — which brought the licensing to a standstill — earlier this year.
Some say the competitive application process was unconstitutional. Some seek a do-over while others want financial damages.
One of the ongoing arguments made by the plaintiffs during the hearing is that licenses are difficult to come by on the open market, though Peckman testified Tuesday that he doesn’t agree with that line of thinking.
“There’s licenses for sale everywhere,” Peckman said. “All of our licenses are for sale. There are licenses for sale and if you don’t know that, then you’re not trying to buy one.”
After applying for nine licenses, Thrive was awarded six licenses through the 2018 application process administered by the state’s Department of Taxation.
Also providing testimony Tuesday was former Integral Associates co-owner and former Las Vegas casino executive Yemenidjian. Essence, which currently has three retail locations open in Nevada, received eight additional retail licenses as part of the 2018 application process.
Yemenidjian, who testified to having an extensive background in finance, said he believes Essence stands to lose $2.8 million in earnings before interest, tax, depreciation and amortization annually on each of the five Southern Nevada 2018 retail licenses that currently sit dormant. Last year, Yemenidjian and his son, Armen Yemenidjian, sold Integral — parent company of Essence Cannabis — to Green Thumb Industries in Illinois. Alex Yemenidjian sits on Green Thumb’s board of directors; Armen serves as president of Green Thumb Industries.
Clark County District Judge Elizabeth Gonzalez expects closing arguments to take place Thursday and Friday. Gonzalez will issue a ruling on the injunction at the conclusion of the hearing.