Nevada advances with legal landmarks and consumption lounge licensing

By Nevada law, cannabis is no longer a Schedule 1 substance in the Silver State, though it remains so federally.

In September, Clark County District Court Judge Joe Hardy ordered the state Board of Pharmacy to remove cannabis from its list of most restricted substances after the Cannabis Equity and Inclusion Community (CEIC) and ACLU of Nevada sued the state, claiming that the classification violated marijuana provisions in the state constitution since 2001. Hardy then reaffirmed the decision with another ruling in October.

Those decisions shouldn’t affect operations at dispensaries in Nevada—in which medical cannabis has been sold legally since 2015, and recreational cannabis since 2017—according to Layke Martin, executive director of the Nevada Cannabis Association.

But A’Esha Goins explains that getting marijuana off a list that includes dangerous substances like cocaine, heroin and methamphetamine makes a significant difference in other ways.

“The authoritative bodies that [enforce] the law have been using that loophole to put young people in jail, because they would say it was a violation of Schedule 1,” says Goins, founder of the nonprofit CEIC, which advocates for diversity and opportunities in the cannabis industry for “people most impacted by the failed war on drugs.” The judge’s second ruling, that the Board of Pharmacy has no authority to regulate cannabis, was “huge,” she adds.

The landmark for regulation and decriminalization of marijuana coincides with another industry milestone—the start of consumption lounge licensing. At the close of the two-week application period at the end of October, the Nevada Cannabis Compliance Board (CCB) announced that it had received 100 total applications.

Of those, 20 were retail applicants, which have no competitive process. Per state law, there is no limit on the number of retail licenses granted to existing dispensaries.

Licenses for independent lounges (not attached or next to a dispensary) are limited to 20, and half of those must be social equity applicants, meaning they 1) have proof of conviction for a cannabis offense for the applicant or their parent, sibling or child; 2) live in a “disproportionately impacted area” as defined by the board’s rules; and 3) own more than half of the business.

In a statement to the Weekly, Tiana Bohner, spokeswoman for the CCB, says its staff is in the process of reviewing “independent cannabis consumption lounge applications from social equity and non-social equity applicants.” The compliance board plans to conduct two drawings in early December to determine who receives independent licenses.

Nevada consumption lounges are expected to open in early 2023.

Goins says she has been assisting seven participants in her organization’s Pathway to Ownership program, funded by Clark County, apply for licenses to open their own consumption lounges. She says her organization has managed to get the applications—requiring non-refundable fees and control of at least $200,000 in liquid assets—off the ground, and that the next step is fundraising to make sure applicants who receive a license can remain open.

The estimated cost to open a consumption lounge is $1.2 million, Goins says.

Cannabis capital of the world?

Though Nevada’s regulated cannabis industry netted more than $965 million in taxable sales during fiscal year 2022, perceptions remain dynamic—evidenced by the state’s recent descheduling of cannabis, and by the the fact that thousands of tourists who frequent Las Vegas dispensaries have just one commercial venue where they can legally consume or smoke their products.

The Las Vegas Paiute Tribe’s Vegas Tasting Room consumption lounge, open since 2019 at NuWu Cannabis Marketplace, has provided that option for guests looking for a place to legally consume cannabis in a social setting.

Aside from that, according to Nevada law, marijuana must be consumed on private property—not in hotel rooms or in outdoor, public spaces. Many Vegas tourists attempt to smoke inconspicuously while walking on Las Vegas Boulevard, but could face a $600 fine if caught and cited.

Industry consultant Christopher LaPorte, founder of Reset Vegas, has been working with Thrive Cannabis Marketplace to fill those holes in the consumer experience. “We’re looking at this one opportunity to introduce cannabis to a nonendemic audience, and really showcase it to tourists and people we call the ‘canna-curious.’ There’s more to this plant than just smoking a joint or pulling something from a bong,” he says.

In 2017, Laporte says, he was in talks with the City of Las Vegas to open a social use lounge. That was put on hold, however, after Gov. Steve Sisolak signed Nevada Assembly Bill 533 into law, delaying consumption lounge licensing and requiring the creation of the Nevada Cannabis Compliance Board to oversee and regulate such ventures.

LaPorte says although that halted the development of lounges, the creation of a state regulatory body was important for the long-term growth and stability of the industry, which lends itself to hospitality.

“We can see the integration of food and beverage, entertainment and other facets of sports culture—all the things that Las Vegas has to offer,” LaPorte says, adding that locals are also a “prime target.”

He says he remains optimistic about the potential economic impact consumption lounges will have on the state’s cannabis and wider hospitality industry.

Per statute, independent lounges must enter into a contract with a dispensary to source and purchase cannabis products to be consumed in their lounge. Lounge customers may then purchase the products and must consume them in the lounge.

This pattern of distribution could turn the industry “on its head,” LaPorte says.

“Dispensaries are retail shops—they are the place where you buy your weed. Now, they’ll [become] their own distribution centers of sorts,” he explains. “We can potentially see this market grow exponentially, because maybe people don’t want to go to a dispensary to buy their weed. But maybe they’ll go to a social use lounge to experiment with cannabis.”

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Mike McNamara

Mike McNamara

A Las Vegas Realtor since 2008. Mike has a wide range of knowledge around all things Las Vegas.

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