Nevada Gives Green Light to Cannabis Consumption Lounges

Cannabis consumption lounges will be coming to Nevada next year under a bill signed into law by Democratic Gov. Steve Sisolak earlier this month. The measure, Assembly Bill 341 (AB341), was signed by Sisolak on June 4 after being passed by lawmakers in both houses of the state legislature in May. Currently, onsite cannabis consumption is only allowed at the NuWu Cannabis Marketplace on Las Vegas Paiute tribal land north of downtown.

The legislation permits two types of cannabis businesses. Retail cannabis lounges will be operated by licensed marijuana dispensaries, while independent cannabis consumption lounges will not be connected to a retailer. Both types of businesses will sell ready-to-use or single-use cannabis products for onsite consumption by adults 21 and older. Live entertainment is permitted, but alcohol will not be allowed.

“You can think of it like a bar, except obviously there will be no alcohol,” Assemblyman Steve Yeager, the sponsor of the legislation, said during a Senate Finance Committee hearing, as quoted by Forbes. “It could be a joint, an edible, it could be an infused food or infused soda, whatever the concept might be.”

Yeager added that more original concepts would also likely arise, noting that ideas such as fine dining restaurants serving cannabis-infused dishes, cannabis-friendly yoga classes, and comedy clubs offering marijuana products could all become reality. 

“Whatever you could think of could be possible,” Yeager said.

Ben Kovler, the CEO and founder of multistate cannabis operator Green Thumb Industries, said that the company is planning a lounge for the dispensary opened on the Las Vegas Strip by GTI in May under a licensing deal with the founders of the brand Cookies, rapper Berner and his cultivation collaborator Jai.

“When people come to Vegas for a bachelor party, a wedding, or just to see friends they haven’t seen in 15 months, they’re going to want to get together and consume cannabis and pretty soon there will be consumption lounges and they’re going to want to come to Cookies,” Kovler said. “What better place than Las Vegas? It’s an experience city in the middle of the desert.”

Consumption Lounges And Social Equity

Nevada’s foray into cannabis consumption lounges will bring a measure of equity to the state’s efforts at marijuana policy reform. Before AB341, cannabis consumption was legal under state law only in private residences with the owner’s permission, leaving renters and visitors open to the disparate enforcement of drug laws that has been repeatedly documented. Consuming cannabis in hotels and casinos is not allowed.

“Consumption lounges are important because they help protect people from prejudicial law enforcement or being fined or sanctioned in a way that causes real harm, that perpetuates the War on Drugs,” cannabis and social equity advocate and Las Vegas resident Noel Gordon told Filter.

The legislation also has social equity provisions built into the licensing regulations for cannabis consumption lounges. Nevada’s legalization initiative, passed in 2016, is lacking in robust equity measures. Such oversights are likely to doom or delay legalization proposals today, a fact seen in recent and eventually successful reform efforts in New Jersey and New York.

Qualified social equity applicants who wish to open a cannabis consumption lounge will receive up to a 75% reduction in application fees, which can cost as much as $30,000. Under the bill, a social equity applicant is a person “who has been adversely affected by provisions of previous laws which criminalized activity relating to cannabis, including, without limitation, adverse effects on an owner, officer or board member of the applicant or on the geographic area in which the applicant will operate,” according to the legislation.

Additionally, the number of independent cannabis consumption lounge licenses will initially be capped at 20, with half reserved for social equity applicants. But despite the efforts, Gordon is uncertain the social equity provisions will work as intended.

“I’m not all that optimistic we will still deliver on the social equity pieces,” Gordon said. “We still live in a prohibition lite version of legalization here in Nevada whereby you can purchase and consume cannabis in your home, but short of that, if you were to consume it on the sidewalk, in a hotel room, at a friend’s place, you will still be subject to some kind of criminal penalty or sanction.”

AB341 goes into effect in October, and state regulators are expected to begin accepting applications for cannabis lounges in July. But with regulations still being drafted, it is likely to be next year before the first consumption clubs open.

“The Cannabis Compliance Board is continuing to review the bill and its requirements in establishing consumption lounge licenses in Nevada,” said Tiana Bohner, public information officer for the agency. “The Board will aim to promulgate regulations and begin issuing licenses by early 2022.”

Bob Groesbeck, the co-CEO for Planet 13, a 112,000-square-foot Las Vegas dispensary billed as the world’s largest, said that his company has been planning a cannabis lounge for the site since AB341 was introduced two years ago.

“Our SuperStore is one of the only dispensaries with the space on site and the proximity to the Las Vegas Strip to create a truly Vegas style club,” Groesbeck said in a statement from Planet 13. “As with the rest of our dispensary we look forward to setting the bar and showing the industry what is possible when your goal is to Out Vegas, Vegas.”