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Nevada is moving forward with legal guidance and licensing of consumption lounges

Under Nevada law, cannabis is no longer a Schedule 1 substance in the Silver State, although it remains so at the federal level.

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 the Nevada ACLU approved the state had sued, alleging the classification violated marijuana provisions in the state constitution since 2001. Hardy then reiterated the decision in another ruling in October.

According to Layke Martin, executive director of the Nevada Cannabis Association, these decisions should not affect the operations of dispensaries in Nevada, which have been legally selling medical cannabis since 2015 and recreational cannabis since 2017.

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

“The responsible authorities [enforce] The law took advantage of that loophole to jail young people for saying it was a Schedule 1 violation,” says Goins, founder of nonprofit CEIC, which advocates for diversity and opportunity in the cannabis industry for “most People” are beginning to be affected by the failed drug war.” The judge’s second ruling, that the Board of Pharmacy does not have the power to regulate cannabis, was “huge,” she adds.

The milestone for the regulation and decriminalization of marijuana coincides with another industry milestone – the beginning of the licensing of consumption lounges. At the end of the two-week application period in late October, the Nevada Cannabis Compliance Board (CCB) announced that it had received a total of 100 applications.

Of these, 20 were applicants from the retail sector, for which there is no competition procedure. Under state law, there is no limit to the number of retail licenses granted to existing pharmacies.

Licenses for independent lounges (not affiliated or adjacent to a dispensary) are limited to 20, and half of these must be social justice applicants, meaning they must 1) provide evidence of a cannabis crime conviction for the applicant or their parents, siblings or children to have ; 2) reside in a “disproportionately affected area” as defined in the Board’s Rules; and 3) own more than half of the company.

In a statement to the Weekly, CCB spokeswoman Tiana Bohner says his staff is in the process of reviewing “independent applications for cannabis use lounges from social justice and non-social justice applicants.” The Compliance Board plans to hold two draws in early December to determine who will receive independent licenses.

Nevada’s consumption lounges are expected to open in early 2023.

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

The estimated cost of opening a consumption lounge is $1.2 million, according to Goins.

Cannabis capital of the world?

Although Nevada’s regulated cannabis industry generated more than $965 million in taxable sales in fiscal 2022, perception remains dynamic — as evidenced by the state’s recent de-planning of cannabis and the fact that thousands of tourists who frequently in Las Vegas pharmacies have only one trading venue where they can legally consume or smoke their products.

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

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

Industry consultant Christopher LaPorte, founder of Reset Vegas, has worked with Thrive Cannabis Marketplace to close these consumer experience gaps. “We’re looking at this one opportunity to introduce cannabis to a non-endemic audience and really showcase it to tourists and what we call the ‘canna-curious’. There’s more to this plant than just smoking a joint or hitting a bong,” he says.

In 2017, Laporte says he was in talks with the City of Las Vegas to open a lounge for social causes. However, that was put on hold after Governor Steve Sisolak enacted Nevada Assembly Bill 533, delaying the licensing of consumption lounges and calling for the creation of the Nevada Cannabis Compliance Board to oversee and regulate such ventures.

LaPorte says while this halted the development of lounges, the creation of a state regulator is important to the long-term growth and stability of the industry that caters to hospitality.

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

He says he remains optimistic about the potential economic impact consumption lounges will have on the state’s cannabis and hospitality industries as a whole.

By law, independent lounges must contract with a dispensary to source and purchase cannabis products to be consumed in their lounge. Lounge customers can then purchase the products and must consume them in the lounge.

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

“Pharmacies are retail outlets — they’re where you buy your weed. Now they will [become] their own distribution centers,” he explains. “We can see this market potentially growing exponentially because people may not 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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