CCB approves Zion Gardens transfers, asks Attorney General to review prior unapproved ownership changes

The Cannabis Compliance Board on Feb. 20 approved transfer-of-interest applications that let Zion Gardens LLC shift ownership stakes but asked the Nevada Attorney General’s Office to review whether earlier, unapproved transfers require further action.

Division Chief of Investigations David Staley told the board the applications (TOI #24000122400058) would permit one licensee to consolidate ownership. Staley said the investigative report identified inconsistencies between IRS tax filings and the timing of some transfers and that the applicant requested a waiver under NCCR 5.112 for transfers of less than 5%.

"Areas of concern were developed with this application because IRS tax forms filed by [one applicant] and Zion Gardens reflect 100% ownership … since 2021 and indicated that he had completed an unapproved acquisition," Staley said during the presentation. He recommended options including approval, denial, or referral to the Attorney General for review.

A Zion Gardens representative told the board the transactions reflected internal buyouts and a settlement with a former partner and said some transfers had been documented informally during financial emergencies. "This is really just an internal transfer ... from licensees that have already been vetted by the board," the representative said, adding that some earlier paperwork was handwritten and that the parties intended formal TOI approval.

Chair Guzman Fraylich emphasized the board’s role in vetting anyone who gains an ownership interest. "All parties getting an interest have to be vetted. And that's our job," she said, urging clearer notice to licensees that transfers require CCB approval.

The board approved the TOIs on a motion that limited the requested waiver under NCCR 5.112 to expire at Zion Gardens' next TOI agenda date and also recommended that the Attorney General review whether disciplinary action or further investigation is warranted. The vote was recorded as approving the motion and the items were carried by voice vote; no roll-call tally was recorded in the transcript.

Why it matters: Transfers of ownership can change who is legally responsible for compliance and reporting. The board’s referral to the Attorney General indicates the CCB found facts in its investigation warranting an outside legal review rather than handling all potential sanctions internally.

What’s next: The waiver agreed by the CCB will expire on Zion Gardens’ next TOI agenda date. The Attorney General’s office will determine whether disciplinary or enforcement action is warranted based on the investigative record the CCB forwarded.