As I previously wrote in Nevada Marijuana Licenses for Sale!, Nevada now allows for transferring cannabis licenses between owners and for transferring licensee locations. The laws that allow these changes were pretty thin on the details and left us waiting to see how the state would interpret them. Well, Nevada has now put in place policies to allow for such transfers.
Nevada Cannabis License Ownership Changes. The provisions of the law regarding ownership changes are pretty simple. Basically, they say that the state should approve a transfer if the buyer has enough money, can pass a background check, and the transfer won’t create a “monopoly.” By far, the most onerous transfers will be for those folks who do not yet have approval to operate a Medical Marijuana Establishment (MME) in Nevada. These potential buyers will need to provide the State of Nevada with the following, at minimum:
- Transfer of Interest Form.
- Proof of $250,000 in liquid assets (for the totality of MME ownership, not for each individual owner).
- Fingerprints Background Check DPS.
- Organization chart.
- Updated Secretary of State paperwork (if applicable).
- Fictitious name DBA paperwork (if applicable).
- Company shares to be issued in total and per owner (if applicable).
- Local jurisdiction business license and approval.
- Local jurisdiction change of ownership approval.
Other types of license transfers have the same requirements with a couple notable exceptions. External transfers to already vetted individuals/companies don’t require background checks (since they’ve already had them), and internal transfers don’t require background checks (for the same reason) or local approval (since the local governments have already signed off on the MMEs).
The bottom line is that these transfer requirements pretty much amount to a new application to the state to own and operate an MME, minus the insane amount of documentation regarding the MME business plans. Per usual, the one potentially burdensome issue is the local approval of brand new, never-been-vetted owners. In fact, to even apply for transfer of ownership with the state, you first must get your local government to sign off on that transfer.
These provisions show that the State of Nevada does not care much about who makes up an MME so long as they are well capitalized and have not been convicted of any felonies. If the local government gives its blessing, the new owners should, in theory, be good to go.
Nevada MME Location Changes. Prior to the 2015 legislative session, MMEs were not able to move their location more than five miles from their original location. This proved burdensome for some potential MMEs that picked locations in undeveloped industrial zones; a lack of utilities left many businesses scrambling and unable to open. Now, the policies have been greatly expanded to allow for more business flexibility.
The new regime removed the “over five miles” restriction on MMEs, but it still requires that the newly located MME be within the same city or county as its initial approval reflects. Meaning, if you applied with and succeeded in the City of Las Vegas, you can’t now move to Henderson or unincorporated Clark County–you have to stay within the city borders of Las Vegas. The state request for location change is also pretty simple. The MME must send a request with the following information:
- The new location.
- Local approval of the location change.
- Local land use approval.
- A professional survey demonstrating state and local setback requirements.
- A statement that the new MME facility will meet or exceed the merits of the location submitted in the original application to the state.
The state will then review the request and approve or deny it. If approved, the MME will get a new provisional/final certificate allowing operation at the new location.
In the end, both the ownership and location changes appear to defer to local government, which is business as usual in Nevada. But, where it wasn’t clear before that the sale of these businesses was going to be allowed, the time is now ripe to buy and sell these MME licenses as Nevada is surely to pick up speed as a medical marijuana haven in coming years.