Sisolak appoints his former general counsel as new Gaming Control Board chair

Gov. Steve Sisolak has chosen his former general counsel, J. Brin Gibson, to lead the Nevada Gaming Control Board.

Sisolak announced on Tuesday afternoon that he was appointing Gibson as the new chair and executive director of the gaming regulatory agency. Gibson will take the reins following the departure of Sandra Douglass Morgan, who last month accepted a position on Fidelity National Financials' Board of Directors.

Gibson, who most recently served as a shareholder at Brownstein Hyatt Farber Schreck, will start his new role Nov. 18. He will be leaving his position with the law firm.

“I am humbled and honored that Governor Sisolak would appoint me chair of the Nevada Gaming Control Board at this point in the state's history,” Gibson said in a statement. “It is a position that has been occupied with individuals of high character and ability, including the outgoing chair, Sandra Douglass Morgan, who has done an exceptional job under the most difficult circumstances. I will work tirelessly to serve with the same sense of honor and dignity for the position those before me have shown.” 

Gibson’s path to the Nevada Gaming Control Board began at Brigham Young University, where he earned his bachelor of arts, master of public policy and juris doctor degrees. He went on to serve as first assistant attorney general and chief of the gaming division within the Nevada attorney general’s office, overseeing a staff of nearly 400 lawyers and legal support professionals. Gibson's time in that office coincided with former Republican Attorney General Adam Laxalt's leadership.

As chief of the gaming division, Gibson also served as primary legal counsel to the Nevada Gaming Control Board, Nevada Gaming Commission and Nevada Gaming Policy Committee. Former Gov. Brian Sandoval also appointed Gibson to serve as the commissioner of the Colorado River Commission of Nevada. 

During the summer, Gibson helped the governor’s office during the two special legislative sessions, underscoring his close working relationship with Sisolak. He served as the governor’s general counsel from January 2019 until January 2020.

Sisolak, in a statement, lauded Gibson as “exactly the type of committed public servant” needed at this time in the state’s history.

"Brin's extensive background and expertise in highly regulated industries, including his experience as Chief of the Gaming Division, makes him a perfect fit for this position, and I look forward to watching him excel in this position,” the governor wrote.

The Nevada Gaming Control Board next meets Dec. 2 and Dec. 3.

Sisolak’s top legal adviser, architect of new cannabis regulatory regime leaving for private sector

Cannabis advisory board

J. Brin Gibson, the top legal adviser in Gov. Steve Sisolak’s administration and an architect of a new cannabis regulatory regime that’s still getting off the ground, is leaving the post for a job in the private sector.

Sisolak announced the news in a press release on Thursday. He said an interim general counsel will be named in the coming days. 

"Brin’s sharp legal mind, extensive experience in both the public and private sector, and respect for the rule of law proved absolutely invaluable in guiding our office through a successful legislative session and the first year of my Administration,” Sisolak said. “I couldn’t be happier for him and his family as they transition to this exciting new chapter.”

Gibson, who previously worked as head of the gaming division in the Nevada Attorney General’s Office, played a key role in designing a new Cannabis Control Board in the mold of Nevada’s well-respected Gaming Control Board. He chaired an advisory board that worked to craft the bill authorizing the new board.

His departure comes at a time of flux for marijuana regulation, however. The board is still being stood up and transitioned from the oversight of the Department of Taxation; an executive director has been publicly announced but not members of the board.

Marijuana labs recently have come under scrutiny for inaccurate reporting on product potency and for passing products with levels of contaminants that should have failed. Sisolak called for a secretive, special task force to investigate “potential corruption,” and license transfers were frozen in the fall.

State officials said they are looking forward to the full implementation of the Cannabis Compliance Board as they work to address a high rate of unfilled positions in the state’s Marijuana Enforcement Division. 

Gibson said in a statement that it was an honor to work for Sisolak since the Democratic governor took office a year ago.

“I am proud of how many good things we have accomplished together to improve the lives of every Nevada family,” Gibson said. “I am grateful for the support the Governor and staff have provided me and my family as I embark on this new opportunity.”

Sisolak requests bill creating Cannabis Control Board; current plan is for paid, part-time board and advisory group

Making good on his promise from his State of the State speech, Gov. Steve Sisolak has requested a bill that would create a Cannabis Control Board in Nevada.

J. Brin Gibson, Sisolak’s general counsel and chairman of an advisory panel that’s explored marijuana regulatory structures over the past few weeks, said the outline of the proposed bill was submitted on Thursday. A Sisolak executive order calling for more effective marijuana oversight had set a Friday deadline for completing “enabling language for the Legislature’s consideration.”

Sisolak’s office did not provide a written version of the request, but Gibson said the plan is for a five-person, paid, part-time board with members that have no financial interest in the marijuana industry. There would also be an unpaid advisory board on which people who are involved in the industry could participate.

He said it’s up to the Legislature and governor whether the board should be a standalone entity with some support from state agencies such as the Enterprise Information Technology Services, or under the umbrella of another agency. In general, he said the concept is to take existing Department of Taxation marijuana division staff and put them in the new structure with the addition of a board and an advisory board.

“I don't know how many additional people we're talking about but not that many,” he said about staffing levels.

Staff at the Legislative Counsel Bureau are tasked with turning the recommendations into bill language. It’s unclear when the bill will be introduced or brought up for a hearing.

The Department of Taxation has a 44-position unit that currently oversees the marijuana industry, but Sisolak has envisioned a different regulatory structure more akin to the Nevada Gaming Control Board. The Department of Taxation has come under scrutiny for, among other things, a lack of transparency in awarding conditional dispensary licenses late last year — an issue that has attracted lawsuits.

Panel questions whether state has staff, authority to adequately regulate marijuana industry

Cannabis advisory board

The chair of a committee that is helping design a new oversight structure for Nevada’s marijuana industry questioned on Friday whether the state’s current regulatory body is large enough and powerful enough to manage the complicated task at hand.

J. Brin Gibson, who is Gov. Steve Sisolak’s general counsel and chairs the advisory panel developing the Cannabis Compliance Board, said the ratio of Nevada Department of Taxation investigators and auditors to marijuana licensees seemed low compared with the structure in place to regulate gambling in Nevada. While there are about four times as many gaming licenses as marijuana business licenses, the Gaming Control Board has about 10 times as many staff members as the marijuana division of the tax department.

“When I look at the numbers of your employees and I look at the number of your licensees, when you compare that to the gaming space,” he said during the advisory panel’s first meeting, “I'll just admit it — I'm skeptical that you're able to do the kind of investigation and enforcement actions that this kind of privileged license requires.”

Citing concerns about transparency in Nevada’s current marijuana regulation system, Sisolak signed an executive order last month tasking the board with preparing a bill for lawmakers that would create a Cannabis Compliance Board. With a mid-March deadline for finalizing the bill concept, panelists are culling ideas from the Nevada casino regulation regime that’s considered the international gold standard.

In a meeting that lasted nearly six hours, they heard detailed presentations from the Gaming Control Board and gambling industry experts. UNLV Professor Greg Gemignani shared a historical retrospective detailing how Nevada’s gambling industry, plagued with corruption and bloodshed and threatened with a federal crackdown in its early years, cleaned up its act and took on strict regulation starting in the 1950s.

Under the current regime, applicants seeking a casino license must undergo a rigorous background check that can sometimes last months or years and includes a review of five years of bank statements and tax returns, an investigation of social media accounts and personal visits by investigators to places where the applicant has lived to interview people who have worked with the applicant.

Panelists noted parallels between gambling and cannabis, which both had their roots in illegal activity before being corralled into Nevada’s mainstream. A major difference is that the Gaming Control Board has matured over six decades, while marijuana’s regulatory structure has only been evolving since 2013, when lawmakers voted to authorize medical marijuana dispensaries.  

Taxation officials reported Friday that in the year since recreational sales began, there had been no documented instances of diversion, when legal marijuana from one state ends up in another market illegally. The agency said it had eight instances in which it suspended someone’s license for anywhere from five days to five months, but has not yet revoked someone’s license or had a hearing in which someone challenged the finding of violation.

That fact surprised Gibson.

“It just strikes me as almost improbable, nearly impossible, that you've yet to have a single hearing on a civil penalty,” he said. “That's just absolutely incredible.”  

Panelists also discussed what they view as a loophole in the agency’s ability to regulate the market. The Nevada Department of Taxation has no staff that is POST [Peace Officer Standards and Training] certified, meaning they have the training and authorization to carry out law enforcement activities.

The department said it only worked with legal licensees and did not have the authority to address criminality in the black market, although Jorge Pupo, deputy executive director of the marijuana enforcement division, said the agency has a good working relationship with police. He cited an example where the department worked with police to shut down a clandestine, illegal marijuana party in a warehouse.

By contrast, the Nevada Gaming Control Board has 91 certified peace officers who do investigations, analyze intelligence and make arrests.

“In order to allow people to collect their rightful dues for their investment in this industry, you've got to control the black market,” Gibson said. “And so the fact that there are no POST-certified employees of your agency concerns me greatly.”

Member and Clark County Commissioner Chris Giunchigliani said she was concerned that taxation officials didn’t track instances when people call the police on a licensee. And panelist and state Sen. Yvanna Cancela said the lack of law enforcement authority leaves gaps when it comes to things such as illegal advertising or delivery services — people can’t call regulators and expect them to enforce those laws.

“I agree,” Pupo said. “The problem is, we don't have any authority, right? But it is a problem, and we recognize that it is a problem.”

Panelists also suggested there needs to be more accountability on marijuana agent cards, which are afforded to people who work at, own or serve on the board of a marijuana business. Regulators need to track whether applicants accrued any disqualifying criminal convictions after they gained the agent card, panelists said.  

Giunchigliani said she was aware of two marijuana industry employees who were fired from one business for theft but immediately hired by another business, with no communication about the disciplinary action.

The taxation department outlined the work it has already done in enforcing marijuana laws and regulations. Violations are categorized from Category I — the most serious, which is grounds for revoking a license — to Category V, which are for violations “that are inconsistent with the orderly regulation of the sale or production of marijuana or marijuana products.”

The state has assessed $603,250 in fines and collected $181,500 of that, with some of the fines reduced through settlement agreements.

The agency also said it conducted 234 investigations in the first year of legal recreational marijuana sales, and substantiated 146 of those complaints. There is currently one establishment in danger of license revocation, but that process is on hold as the business works through settlement discussions with the enforcement division.

The panel is expected to meet again next week, although the exact topics have not yet been decided and several state employees have been assigned research tasks ahead of it. Melanie Young, the recently appointed director of the Nevada Department of Taxation, said Gibson directed her to analyze the marijuana division’s staffing levels and how they compare to what the Gaming Control Board’s levels would be if it had a similar number of licensees.

“I think we’re really excited to work with Gov. Sisolak and the team and see where we can make improvements,” she said.