Transferring ownership of a business license and business holdings almost always presents challenges to both the buyer and seller. When adding medical marijuana operations, one of the most heavily regulated industries in the state, into the mix, those challenges can become infinitely more complicated.
Luckily, these buyers and sellers can look to the services of an experienced medical marijuana business attorney to guide their sale and potentially smooth over any hitches they would have faced. More often than not, these parties will require that attorney’s representation throughout the entire process in order to satisfy and convince local hearings boards in regards to their intended activities.
Because of these potential obstacles, marijuana business license transfers could face any of the following complications before the sale is finalized:
Convincing Approval Committees
Most likely in an effort to appease local communities, the Nevada State Legislature baked in a tremendous amount of power for local cities and counties when it comes to approval of marijuana licenses, including their transferal.
For example, we wrote in a previous post that an existing medical marijuana business can only move to a new location if “it can be shown that the new location is more suitable than the previous location” to the satisfaction of the local approval committee.
Furthermore, cities like North Las Vegas utilize language in their regulatory ordinances stating that the laws will be construed to “protect the public over medical marijuana business interests.”
Therefore, in this one example we have two extremely subjective criteria for a business owner to get approval for transferring just their location, let alone transferring their license in the process. Questions can arise, like: does the new location have to be “more suitable” to the public, the business or both? If the city feels that an MME’s activity is not in the public’s interest, what sort of burden of proof does the business have to satisfy in order to get approval?
Since each individual committee has immense final decision power and each decision will involve a host of unique subjective factors, every attempted approval should be guided with the assistance of a medical marijuana business lawyer in order to ease the process.
When medical marijuana business owners request to transfer ownership, the new recipient of the license must undergo the same application process as the initial owner’s. Nevada state laws also provide that a local board may “deem a medical marijuana establishment in compliance with all local governmental ordinances or rules, regardless of any ranking of the establishment established by the Division.”
In this situation where a local board holds the power to interpret laws, challenges the initial application did not endure could arise. Suddenly, the meaning of past decisions could be called into question, and the new owner could face challenges given their unique standing.
For instance, SB 276 limits a group, person or entity to ownership of one marijuana establishment registration license in the area. Therefore, if a privately held company had a large stakeholder that separately held an individual license in the same area, could the local approval committee interpret this as one person owning multiple establishments?
Legal questions like these are infinitely complex and subject to the extent of debate allowed on the matter. As more of these debates occur, case law and precedent could introduce further complexities.
You can navigate these difficulties with the assistance of a Nevada medical marijuana business attorney, who will lend clarity and represent your case to the best of their ability.
Anyone attempting to buy or sell a medical marijuana license in Nevada can contact Connor & Connor for representation and answers to their pressing questions.