CARSON CITY, Nev. — The Cannabis Compliance Board approved Mystic Holdings’ request to reorganize licenses previously held by Qualcan into three separate Mystic subsidiaries on Thursday, but members asked the Attorney General’s office to review unresolved tax questions raised by the Department of Taxation.

‘‘Staff have identified an area of concern with this application, namely Mystic Holdings through its subsidiaries, Qualcan, Pixi, and Pixi Reno owe the Department of Taxation approximately $931,000 as of March 7,’’ Rachel Brenner, Chief Compliance Audit Investigator, told the board during the March 20 meeting.

Mystic representatives disputed parts of the tax accounting but acknowledged there were outstanding balances. ‘‘We’ve paid an additional $713,345.22 since February,’’ Michael Cristalli, a company representative, said during the meeting.

Board action and conditions

After extended questioning about reconciling payments and returned checks, the board voted to approve Mystic’s internal transfers and to grant a temporary waiver under NCCR 5.11 pursuant to NCCR 5.112. The board also directed staff to refer the tax matter to the Attorney General’s office and requested a report back at the board’s next meeting.

Several board members urged a specific repayment plan and asked for ongoing status updates. ‘‘I would want a very specific plan that is set in stone that we are…that we will then bring you back to follow-up on,” Member (recorded) said during deliberations. The board recorded approval of the transfers while also explicitly requesting follow-up from the AG on outstanding tax liabilities.

What Mystic told the board

Mystic’s presenters described a series of recent cash transfers and automatic payments they said had reduced the company’s tax liability. ‘‘We have paid $713,345.22 since February. Additional payments have just been made as recent as this week, and we continue to make payments on a, on a weekly basis, if not a daily basis,’’ Michael Cristalli said.

Company leadership said bank-account disruptions and the timing of tax filings contributed to earlier returned checks and reported inconsistencies with Department of Taxation records. ‘‘We had several banks that shut us down,’’ one Mystic representative said, describing operational challenges during acquisitions and a receivership-driven purchase.

Why the board referred the question to the AG

Board members said they were satisfied the TOI application itself met procedural requirements for the license transfers but were mindful of fairness across the industry. Several board members emphasized that other licensees with past tax delinquencies had faced formal regulatory consequences. The referral to the Attorney General will allow legal staff to review any potential enforcement steps or remedies independently of the licensing vote.

Next steps

- Mystic was approved to reorganize the Qualcan licenses into the named Mystic subsidiaries; the board granted a time-limited waiver under NCCR 5.112 (to expire at the company’s next TOI appearance).
- The Attorney General’s office will review the Department of Taxation’s information about outstanding liabilities and report back to the CCB at its next meeting, currently scheduled for April 17, 2025.

The board’s action left the license restructuring in place while the AG reviews the company's tax reconciliations and reported payments. The board asked Mystic to continue providing reconciliation spreadsheets to staff while the AG review proceeds.