Nevada legalized the recreational adult-use of marijuana on July 1, 2017 and the state has generated millions in tax revenue as a result. Nonetheless, the Nevada Regulation and Taxation of Marijuana Act (the “Act”) provides that until November 2018, only registered marijuana certificate holders may apply for recreational retail marijuana establishment licenses. The Nevada Department of Taxation (the “Department”) ceased accepting applications at 2017 year’s end.

Nevada state flag on cannabis backgroundThe Act further provides that at least once a year, the Department will determine whether additional marijuana establishments are necessary to support the demand in the state. It was anticipated the Department would begin accepting recreational retail marijuana establishment licenses again in November 2018.

On July 6, 2018, the Department issued a notice of its intent to begin accepting applications for recreational retail marijuana establishment licenses. The notice came sooner than expected, but there’s a catch! The Department is accepting applications under two (2) conditions: (1) the applicant must be a registered medical marijuana establishment certificate holder; and (2) the applicant must be in “good standing” with the Department. The plus side is that such applicants may apply for one (1) or more recreational retail marijuana establishment licenses.

For those prospective applicants meeting the two (2) foregoing conditions, they must act fast. The application acceptance period lasts only ten (10) days – from September 7-20, 2018 (excluding weekend days).

In addition, prospective applicants should not expect to be open for business anytime soon. The application review period begins September 7, 2018 and extends to December 5, 2018. The Department will award conditional licenses no later than December 5, 2018.

There’s another catch! Conditional license holders must be fully operational no later than twelve (12) months following the issuance of a conditional license. If the establishment is not fully operational after twelve (12) months following the issuance of a conditional license, the establishment must surrender the license to the Department, unless an extenuating circumstance applies.

The application can be found on the Nevada Department of Taxation website.

In November 2018, the Department may open up the applicant pool to all persons interested in submitting an application to operate a recreational marijuana establishment – emphasis on may.

Las Vegas Strip, Las Vegas, Nevada

Approximately 43 million tourists visit Las Vegas annually, and of those tourists, some undoubtedly consume marijuana during their visits.

There is just one major issue: There is no place for the tourists to consume it. Pursuant to Nevada recreational use regulations, consumption is to be done privately, not publicly. Recreational use in gaming establishments, hotels, or concerts is strictly prohibited.

However, the City Council of Las Vegas has drafted a proposed ordinance to permit the operation of marijuana consumption lounges. Here are several key takeaways from the proposed ordinance:

  • Employees are prohibited from consuming marijuana in the establishment during business hours
  • Employees of the marijuana consumption lounge must be at least 21 years of age
  • Visitors of the marijuana consumption lounge must be at least 21 years of age
  • The establishment must be appropriately concealed as to not allow viewing by the general public
  • The establishment may obtain a nightclub license for live entertainment to be performed on the premises
  • The licensee must obtain a special use permit for the establishment to operate specific commercial, industrial, or hybrid commercial/industrial zoning districts.

The proposed regulation could take effect by March or April of 2018. Sooner rather than later, tourists and residents may be able to enjoy the consumption of marijuana in a more social setting. If the proposed ordinance passes, Las Vegas may experience an increase in annual tourists as a result.

The beautiful casinos, lavish nightclubs, and lax alcohol laws provide the 40 million annual tourists with plenty of reasons to visit Las Vegas. In some polls conducted of both tourists and locals who were asked to describe Las Vegas in one word, the words “paradise” and “sin” came up frequently.  The introduction of Senate Bill (“SB”) 236 possibly provides one more reason to describe Sin City as “paradise” or “sin.” If passed, this legislation would allow public consumption of marijuana.

Although adult marijuana use became legal in Nevada on January 1, 2017, it is a misdemeanor to consume it anywhere but private residences. SB 236 would allow local governments to issue licenses for the use of marijuana at, among other places, restaurants or bars, and at public events. As with all laws, SB 236 would place restrictions on the public places at which marijuana could be consumed. Specifically, licenses would not be issued for businesses within 1,000 feet of any school, church, park, public pool, or substance abuse center.

Assuming SB 236’s passage, one type of business that will not be seeking a license is the casinos. Since it is still a Schedule I substance, gaming authorities in Nevada have specifically stated that marijuana consumption will not be permitted in casinos.

Notwithstanding the prohibition in casinos, SB 236 is still pretty exciting for Nevada. If it becomes law, it will give tourists one more reason to visit Sin City.

Skyline of Las Vegas, Nevada
Copyright: rabbit75123 / 123RF Stock Photo

Michael Neville writes:

The White House, Washington D.C.
Copyright: pigprox / 123RF Stock Photo

On February 23, 2017, White House Press Secretary Sean Spicer stated that the public may see “greater enforcement” of federal cannabis laws and that the Trump Administrations sees a “big difference” between medical cannabis and recreational cannabis. Mr. Spicer’s comments have understandably caused great concern throughout the cannabis industry, and a group of 11 U.S. Senators[1] recently sent a letter to Attorney General Jeff Sessions requesting that Mr. Sessions and the Department of Justice (DOJ) clarify the DOJ’s enforcement priorities. The Senators urged Mr. Sessions and the DOJ to immediately provide assurances to states and the cannabis industry that the DOJ will respect the ability of states to enforce both medical and recreational cannabis laws. The full letter can be read here.

The Senators requested Mr. Sessions and the DOJ to continue to adhere to the Cole Memorandum, which outlines federal cannabis enforcement priorities and provides that where states have “strong and effective regulatory and enforcement systems to control the cultivation, distribution, sale, and possession of marijuana, . . . enforcement of state law by state and local law enforcement and regulatory bodies should remain the primary means of addressing marijuana-related activity.”[2] The full Cole Memorandum can be accessed here. Senator Dean Heller (R-Nev.) also wrote his own letter to Mr. Sessions urging adherence to the Cole Memorandum.

There are currently 8 states (Alaska, California, Colorado, Maine, Massachusetts, Nevada, Oregon, and Washington) and the District of Columbia that have passed laws allowing for the recreational use of cannabis, 28 states that have passed medical cannabis laws, and 21 states that have decriminalized the use of cannabis.

[1] Senators Elizabeth Warren (D-Mass.), Lisa Murkowski (R-Alaska), Patty Murray (D-Wash.), Ron Wyden (D-Ore.), Jeff Merkley (D-Ore.), Maria Cantwell (D-Wash.), Ed Markey (D-Mass.), Brian Schatz (D-Hawaii), Catherine Cortez Masto (D-Nev.), Cory Booker (D-N.J.), and Michael Bennet (D-Colo.).

 [2] August 29, 2013 Cole Memorandum re “Guidance Regarding Marijuana Enforcement,” available at the Justice Department website

Michael Neville is an associate in the Litigation Department of Fox Rothschild LLP, resident in the Chicago office.