IndustryPolitics Nevada official put on leave amid cannabis licensing fiasco Chris Kudialis September 9, 2019

Less than two weeks after a Las Vegas judge stopped the Nevada Department of Taxation from giving out dozens of planned retail cannabis licenses, the department has put one of its top officials on leave.

Jorge Pupo, the agency’s deputy executive director, has been temporarily moved out his position, a Department of Taxation official confirmed to Leafly on Monday. The decision came from Nevada Gov. Steve Sisolak’s office on Friday, according to a Department of Taxation source not authorized to speak on the topic, and did not specify a return date.

“All I’m able to say is he’s on leave,” said Eden Larson, a Department of Taxation spokesperson.

Sisolak’s office did not immediately respond to multiple requests for comment.

Over the course of the past year, Pupo has emerged at the center of what’s become the biggest scandal in Nevada’s two-and-a-half-year history of legal retail cannabis. Promoted in 2017 to oversee the launch of adult-use sales in the Silver State, Pupo testified in June as part of a lawsuit that he shared meals with attorneys and dispensary owners before changing criteria for retail applicants. He has testified in court that those contacts did not ask him to alter the selection process.

But in an Aug. 23 ruling, Clark County District Judge Elizabeth Gonzalez wrote that the close relationships between Pupo and the industry created the potential for abuse. She said various factors—including Pupo’s personal relationships with industry members, an easily manipulated diversity requirement, and the department’s hiring of improperly trained temp workers who were never subjected to background checks—“created a process which was partial and subject to manipulation by applicants.”

Leafly has attempted to contact Pupo multiple times for comment. A Department of Transportation spokesperson refused to transfer a Leafly reporter to Pupo’s voicemail or provide an alternate phone number. A source close to him told Leafly that Pupo is not interested in commenting.

It started with a lawsuit

After the state scored the applications and announced the winning applicants, some business owners who were not selected filed a lawsuit against the state. They argue that due to doubts raised about the legitimacy of the process, licenses should be revoked and reallocated.

As the lawsuit progressed, it made public some worrying elements of the state’s selection process, such as relying on six temporary workers contracted from the staffing agency Manpower. The judge ruled the temps were not adequately trained for the work they were expected to do.

In issuing an injunction preventing the release of the licenses in question, the judge wrote: “The failure of DoT to carry out the mandatory provisions of [Nevada’s marijuana laws] is fatal to the application process.”

Avoiding federal interference

Plaintiffs in the case, who are seeking to invalidate the awarded licenses, claim they’re also concerned that fumbling the licensing process could invite interference from federal authorities, citing an Aug. 15 podcast on which an FBI spokesperson said that competition for a limited number of cannabis licenses is “opening the possibility for public officials to become susceptible to bribes.” Last week, federal authorities arrested a Massachusetts mayor on charges of extorting cannabis businesses.

Dominic Gentile, a Las Vegas attorney representing the plaintiffs, said Monday that Pupo being placed on leave was “a positive.” Gentile added that he had been contacted by the FBI regarding cannabis in Nevada but declined to comment further.

“Mr. Pupo behaved in a way that is inconsistent with doing his job in a non-corrupt manner,” Gentile said. “There’s a lot going on here.”

Reached Monday, an FBI spokesperson declined to comment on the state’s licensing woes or matters relating to Pupo, noting that it’s agency policy not to comment on investigations unless they involve a threat to public safety.

Chris Kudialis Chris Kudialis is a Las Vegas–based cannabis reporter. He has written articles for the Los Angeles Times, Las Vegas Sun, Charlotte Observer, Houston Chronicle, Detroit Free Press, and Brazil's Rio Times, among other metropolitan dailies. View Chris Kudialis's articles