Carson City cannabis discussion devolves into arguments of a business violation, who is 'local'
After more than three hours of public and board discussions regarding allowing additional cannabis dispensaries to operate in Carson City, the Board of Supervisors accepted the first reading of a policy that deals with potentially expanding the maximum number of dispensaries from two to four.
“I need a spirit of fairness here,” said Mayor Lori Bagwell.
By the end of the meeting, Supervisors Lisa Schuette and Stacey Giomi were against ordinance changes, while Supervisors Stan Jones and Maurice White would vote for the ordinance changes, both citing not wanting to over-regulate the business community.
Lengthy discussions were held on whether or not the board should vote to return to another first reading so that the district attorney’s office could add additional provisions to the ordinance. The idea is to make the proposal more palatable to the board by giving local government more control over the cannabis industry by changing the Liquor and Entertainment Board to the Liquor, Cannabis and Entertainment Board.
However, in the end, Supervisor Giomi rescinded his motion to have those provisions added, and the bill ordinance was accepted as a first reading.
The ordinance changes will be officially voted on at the next meeting.
Board opinions
Supervisor Giomi stated that there were a lot of “false flags” and a lot of detractors from the discussion.
“To me it comes down to what’s right for Carson City. It’s our job to balance over regulation and taking care of the health, safety and welfare of this community. And it’s a tough balance.”
Giomi stated he was in favor of leaving the cap at two.
Supervisor White stated he was against lounges, as well as recreational marijuana as a whole.
White went on to state that crime has not significantly increased in Carson City since cannabis was legalized. He stated he did not believe studies that were either pro or against cannabis.
White then read from studies seeming to link suicides, psychosis and depression to cannabis usage.
“Follow the money so you know where the answer was purchased from,” said White.
White then went on to say that the board should not be artificially manipulating the market, and businesses should be allowed to survive or fail on their own.
Supervisor Jones stated the board had “beat this to death.”
“I believe in free enterprise,” said Jones. “I’m not concerned whether the two existing facilities make a profit or not. I will support the change.”
Supervisor Schuette stated she did not believe that Carson City’s residents would be better served by changing the ordinance, and she would not be in support.
Mayor Bagwell stated she reviewed the facilities, and stated there were no lines outside, no people sleeping outside, no tents outside — all of which had originally been concerns of allowing dispensary facilities.
“If we approve this today, it doesn’t necessarily mean they’ll be getting a location,” said Bagwell.
Giomi stated that if the ordinance were to change, he would like to see the city’s Liquor and Entertainment Board to become the Liquor, Cannabis and Entertainment Board to have oversight over the cannabis industry in the capital city.
Jones argued that the city has no concerns over whether or not five bars or five liquor stores are on the same street, and the same should be extended to cannabis locations.
“We really need to keep this on an even playing field,” said Jones.
“That barn door was opened a long time ago,” said Giomi. “We have the opportunity to dictate what our community looks like going forward.”
What defines ‘local’?
While the agenda item was set to discuss whether or not the city should expand the amount of maximum-allowed cannabis locations from two to four, which is the amount allowed by the state, much of the discussion revolved around the applicant of the item, Qualcan LLC.
At the beginning of the agenda item, Supervisor White accused Qualcan co-owner Michael Cristalli of “not being local,” stating that while Cristalli referred to himself as being in the Carson Valley, he was actually in Eagle Valley.
“As a local you would know that,” said White.
Cristalli said that he never claimed he was a Carson City resident. He said that, as a Nevadan, he has spent a lot of time in both Carson City and Carson Valley, but he has never claimed to live in either.
“I’ve practiced law in Carson City for 28 years,” said Cristalli. “I may not live in Carson City — yet — but I’m a Nevadan, and as a Nevadan, I am a part of this community.”
After White continued to question Cristalli on whether or not Qualcan was a Canadian Company — which Cristalli refuted, stating it is a wholly-owned and operated Nevada-based U.S. company, Mayor Bagwell attempted to cut off White’s line of questioning.
“The issue at hand is whether to expand (the cap on cannabis locations) — not who the licensee is,” said Bagwell.
However, Lorenzo Barracco the CEO of Qualcan responded to the question, stating that while, at one point, the company had considered going to Canada due to U.S. regulations, they did not.
“We are proud to be a U.S. company,” said Barracco. We are one of the few U.S. companies who had the courage to go public and stay U.S.(-based). It’s better for our shareholders. And, quite frankly, we did not want to be Canadians.”
Supervisor Giomi argued against Mayor Bagwell’s point, stating that they should be able to question Qualcan on their background. However, Carson City Chief Deputy District Attorney Dan Yu, as board council, stated that he agreed with the mayor, and that the scope of the agenda item refers to expanding the cap, not the background of the applicant.
Based on population under state law, Carson City is allowed up to four cannabis locations. While the Illinois-based companies that own Carson City’s two current cannabis locations, Sierra Well and RISE, has argued against allowing Qualcan a location, Qualcan stated they supported the cap rising to the total allotted four.
“Qualcan is comfortable with the request and asks that you recognize all four (licenses),” said Seth Carlson, legal representation for Qualcan. “Qualcan would love the competition. They want to compete in that sector.”
Will Addler, on behalf of his clients Sierra Well and RISE, stated that while the community might not be negatively impacted by additional cannabis locations, it also “maybe is not benefitted at all by having additional cannabis stores.”
Addler stated that the Mound House cannabis location has decreased sales in Carson City, which is the basis of his assertion that there doesn’t need to be any additional locations.
“The city really only needs two licenses,” said Addler.
A General Manager for Sierra Well claimed during public comment that Sierra Well is a “local Northern Nevada cannabis company;” however, while the location may be located in Northern Nevada, both Sierra Well and RISE are owned out of Illinois.
The manager questioned Qualcan’s business practices, stating that Qualcan recently received a “shocking” violation from the Cannabis Compliance Board, during which Qualcan had allowed the theft of 90 cannabis products from one of their locations.
Cristalli later refuted this, stating that the operation in question, Pixie Reno LLC, had those issues prior to Qualcan acquiring the business.
“We are good operators, despite their accusations,” said Cristalli. “We have had no disciplinary issues in terms of regulations since we began operating back in 2014. The issues as it relates to Pixie Reno were acquired in asset acquisition. For them to assert that we are, for some reason, bad actors, or not good operators, is inconsistent with our operational history. I will put our record up against them any day.”
Sheriff Ken Furlong stated that current local cannabis businesses have been very cooperative with the sheriff’s office in Carson City, and that crime statistics do not show a rise in crime within the capital city.
Furlong stated the only formal issue the department had was the potential for drive-through services, and that those would need additional security precautions undertaken.
Following public comment, most of which was against an additional cannabis location, Carlson on behalf of Qualcan reminded the board that the item before them was not about opening a new location, but was rather a policy issue: whether or not to allow the maximum amount of dispensaries to increase from two to four.
“What is Carson City about?” asked Carlson. “Is it about free enterprise? Is it about consumers’ choices? I would hope it is — because what’s next on the list? The number of bars to be licensed? The number of restaurants to be licensed? The number of shops that sell bait and tackle for fishing — we can go down the list and say ‘we have too many of those, we don’t need anymore.’”
Carlson stated that he was not surprised to see Qualcan’s competition in the meeting.
“It’s in their best interest — they want to keep this as close to a monopoly as they can.”
Carlson also made note that they, too, hold an additional license for a new location, should the cap be raised.
“Free market competition is what allows the community to thrive,” said Carlson.
Cristalli responded to his competitors, stating that while they had “thrown the largest stones” at Qualcan that meeting, that they should be cautioned because they, too, live in glass houses.
Cristalli went on to note that Sierra Well was recently purchased by the Illinois-based company Verano for $29 million.
Cristalli reiterated that Qualcan and its owners are Nevadans.
“We are Nevadans, we are a Nevada-based company, and we do not have operations outside the state of Nevada,” said Cristalli.