Cannabis Lounges Looking More Likely in Las Vegas

Nevada is moving forward on consumption lounges after a letter from its legislative council bureau to State Sen. Tick Segerblom last weekend said such businesses would not violate state law.

A new legal opinion says consumption at lounges, festivals, concerts, and one-off events would be allowed under state law.

The letter, dated Sept. 10, also claims that one-off events, like festivals and concerts, where the plant is consumed should also be allowed.

“It is the opinion of this office that a business may establish and operate a lounge or other facility or special event at which patrons of the business are allowed to use marijuana in compliance of state law,” Legislative Council Brenda Erdoes wrote to Segerblom.

Ballot Question 2, the adult-use legalization measure passed by voters last November, allows for the possession and consumption of up to one ounce of marijuana flower or up to one-eighth the equivalent of THC concentrates and edibles by adults in Nevada. But language in the law is generally unclear on consumption regulations outside of a private residence. So state lawmakers questioned its reach.

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Earlier Clarification Effort Failed

Segerblom’s Senate Bill 236, introduced during the past sessions of the Nevada State Legislature, aimed to provide a framework for local jurisdictions wanting to license marijuana lounge operations. The bill passed the Senate but died in the House after facing resistance from Nevada Gov. Brian Sandoval. Sandoval argued that such lounges go beyond what’s allowed by the US Department of Justice’s 2013 Cole Memorandum and put Nevada at “greater risk” of an enforcement crackdown by the Justice Department.

Segerblom said Sunday’s legislative council opinion confirms that SB236 was not necessary.

“Now it’s up to county commissions and city councils across the state,” he said. “They can license these businesses if they want to.”

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Gov. Sandoval Disagrees

Speaking Tuesday, the Nevada governor said he objected to Erdoes’ opinion and called on Nevada Attorney General Adam Laxalt’s office to advise the Nevada Department of Taxation about how to statutorily prevent such lounges.

Laxalt’s spokewoman Monica Moazez referred all questions to the Nevada Department of Taxation, whose spokeswoman Stephanie Klapstein did not respond to multiple calls and emails for comment on Monday and Tuesday.

While cannabis industry representatives in Nevada celebrated news of the legislative council’s opinion, they described feelings of “cautious optimism” toward local licensing process, which could take months to complete before the first Las Vegas marijuana lounge opens its doors.

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Dispensaries Moving Carefully

“I would like to see a cautious approach,” said Nevada Dispensary Association President Andrew Jolley, whose advocacy organization represents 55 of 60 licensed dispensaries across the state. “This is a huge step in the right direction, but we recognize it can be a thorny issue and may not be solved overnight.”

Over 43 million tourists descended on Las Vegas last year, according to the Las Vegas Convention and Visitors Authority, and Segerblom has billed the new industry as “Amsterdam on steroids” in one of the world’s most popular visitor destinations. But Nevada law doesn’t explicitly give tourists anywhere to use the plant besides a private residence. That means hotels, public parks and casinos are all off-limits.

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Armen Yemenidjian, owner of Essence Cannabis Dispensary, said his roughly 500 daily tourist shoppers would benefit from having an adjacent lounge to the dispensary where they can use the product.

“At this point, I don’t see why not,” Yemenidjian said. “No one to date has been able to answer the question where these tourists should consume and where they can go to try out these products that are now legal.”

Jolley predicted the lounges would also attract a sizeable amount of local residents looking for education on “how to use the product responsibly.” Local recreational cannabis buyers make up 80 percent of the clientele at Jolley’s Las Vegas dispensary, located five miles west of the Strip.

Go Ahead and Buy, Just Don’t Consume

Leading officials in Clark County, which includes the Strip among other popular tourist areas in the Las Vegas Valley, expressed willingness to explore opportunities with the lounges after reading Sunday’s opinion letter.

‘People are purchasing product they can’t consume anywhere, and we’ve got to address this situation.’

Steve Sisolak, Clark County Commission Chairman

County Commission Chairman Steve Sisolak added an agenda item on marijuana lounges to the commission’s next scheduled meeting on Sep. 19, and said it will likely be developed over the span of the next three meetings, which take place every two weeks. The county’s Green Ribbon Panel, which includes Jolley and Yemenidjian, will also provide recommendations to the county commission after an Oct. 4 panel meeting.

Sisolak said the marijuana laws, as currently interpreted, leave county visitors “in the lurch.”

“I’m very sympathetic to these people because they have no place to go to,” Sisolak said. “They’re purchasing product they can’t use anywhere and we’ve got to address this situation.”

While Sisolak wouldn’t provide a timetable for possible opening dates, Jolley and Yemenidjian were more optimistic. If all goes according to plan, the two Las Vegas dispensary owners said they’re ready to launch their own cannabis lounges as early as next month.

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