Nye County Commission green-lights relocation of pot production facility

Facing multiple lawsuits that alleged fraud, misappropriation of intellectual property and a failure to pay lenders who helped fund the company during its start-up, CWNevada filed for bankruptcy in mid-2019.

The company is now in the receivership process, with the courts naming Dotan Y. Melech as the receiver. Melech has authorized Argentum Law to perform services on its behalf.

That law firm went before the Nye County Commission in December 2019 to request approval of a special use permit to allow for relocation of CWNevada’s production facility from 301 S. Oxbow Ave. in Pahrump to 9680 S. Oakridge Ave., where CWNevada currently has permits to operate a cultivation facility.

At that meeting, Diann Musial, a resident living close to the relocation site, took the time to air some concerns she and her neighbors share regarding the move.

Musial listed four concerns, the first of which was the “putrid” smell of the deodorizer used in the filtration system that is meant to help prevent the smell of the marijuana itself from becoming an issue. “We have children who have literally vomited,” Musial said.

Traffic to and from the facility is also an area of concern for Musial. “We have traffic that comes down Oakridge, Fuchsia, Bond, they are not supposed to but workers come, they zip down the roads, they honk their horns. We have called and complained but you know, you can’t control employees,” Musial stated.

The cloth covering used to screen the view of the facility from the neighborhood was another point of contention for Musial, who said the covering blows off the fence in windy conditions, a regular occurrence, particularly on the south side of town. “We originally asked them to have vinyl privacy fencing and the owners have never responded to our request,” she explained.

Loud noise from the facility was yet another concern, with Musial detailing, “They play their radios… and they have it blasting.”

In conclusion, Musial requested of the commission, “Don’t give out a permit and not have some real clear conditions that are in writing so we can be heard. We live among this.”

Scott Rutledge of Argentum Law said he believed Musial’s concerns were valid. However, he emphasized that his client, Melech, has no intention of actually operating out of the facility.

The request for relocation was meant only to facilitate future transactions, with Rutledge explaining, “Our role in this process has been on behalf of the receivership trust, which means that the business is not operational at this time. We have a skeleton crew of security, that is required because we have marijuana product on-premise. When the facility is granted to become operational, there is most likely going to be a new ownership group that will run that facility, based on our deliberations with the state and the courts. The court has ruled that these licenses would likely need to be sold, as what happens in a receivership liquidation effort.”

Rutledge said the relocation effort was aimed at preserving CWNevada’s licenses in Nye County so they can stay in Nye County after the receivership process is complete.

As to the neighbors’ concerns, Rutledge said, “I don’t think our client would have any concern with some conditions as it relates to the fencing. Obviously it’s an added cost but again, we are at an uncertain area in terms of the transaction and who is going to purchase it. But I can guarantee that if there is a new ownership team, I don’t think you having some higher standards about those, some of those concerns that have come off, I think it would make sense.”

Nye County Commission Chairman John Koenig then turned to county staff to ask whether a new owner, if the company is sold, would be required to go before the commission to obtain approval for operation. “At that time, I can control whatever I want, is that correct?” Koenig questioned.

Nye County Planning Director Brett Waggoner confirmed that was accurate, noting that Special Use Permits and licenses for marijuana operations are not transferable and would require approval for any new owner.

“So at that time, they will need an SUP (special use permit) and that’s when I can tell them, I want a new fence and whatever else,” Koenig clarified, which Waggoner confirmed.

Rutledge added, “We know there has been some interest both by existing cultivation and license holders here in Nye County as well as others. So I think the way forward for us is to put this together and continue to remain nonoperational. It’s not our client’s interest to do any sort of operation… In fact, we believe with what the court has declared, we won’t become operational. We simply want to get the licenses current and then transact.”

Argentum representatives also offered to leave a business card with Musial so she can contact them and they can ensure they are working with the neighbors.

Nye County Commissioner Leo Blundo then asked, “Have you had any difficulty with this (production) license at its current location?”

Rutledge replied, “I understand there have been some issues with the existing landlord to access the property and so that’s also part of the reason we need to relocate it. As we’ve discussed… there are a lot of moving parts with this so for us, the cleanest, most direct way to resolve some of these issues was to put the two licenses CWNevada owns in Nye County together on one site.”

Blundo then made the motion to approve the special use permit to allow the relocation, which passed with all in favor.

Contact reporter Robin Hebrock at rhebrock@pvtimes.com