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October 22, 2014

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Medical marijuana takes root; now what?

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Steve Marcus

Medical marijuana is shown in a home in this 2010 file photo.

Medical Marijuana

James Parsons, president of Medical Cannabis Consultants of Nevada, poses at the business Monday, October 25, 2010. Parsons was one of several Las Vegans who was targeted by the Drug Enforcement Administration and Metro Police in a crackdown Sept. 8 on individuals who grow marijuana for medicinal purposes. Parsons is legally registered with the state to harvest marijuana for medicinal purposes but his business and Summerlin home were raided. To this day he has still not been charged. Launch slideshow »

It’s January 2015, and on your way home from the grocery store, you make a quick stop by the pharmacy to pick up some medicine to soothe your chronic back pain.

WHAT’S FOR SALE

Medical marijuana isn’t just about bud. Creative cooks have found ways to infuse cannabis into a variety of products, from chocolate to candy to iced tea. For patients unable or unwilling to smoke it, marijuana-infused edibles offer an alternative form of treatment. One popular choice is tinctures, a concentrated marijuana extract that is placed a few drops at a time under the tongue. Although the effects are similar, ingested marijuana usually takes longer to take effect, but lasts longer, than smoked cannabis. Here’s a sampling of what’s for sale at a Denver-based medical marijuana dispensary.

• Platinum OG cannabis — Indica strain, $37.16 per eighth of an ounce (3.5 grams)

• Tangie cannabis — Sativa Strain, $46.46 per eighth of an ounce

• Mountain High Lozenges, $11.47 each, 116 mg of marijuana

• Mountain High Suckers, $4.87 each, 38.6 mg of marijuana

• Marqaha Orange Creamsicle soda, $5.56 each, 110 mg of marijuana

• Sweet Grass Chocolate Chip cookie, $3.48 each, 42 mg of marijuana

• Dixie Chocolate Truffles, $8.34 each, 50 mg of marijuana

• Julie and Kate’s Granola, $10.77 each, 100 mg of marijuana

But this pharmacy offers something you won’t find at a Walgreens or CVS, a product that had previously been confined to backyards and basement closets.

Upon entry, you’re greeted by the distinctive smell of marijuana, wafting up from a cornucopia of medicinal cannabis available for purchase. And it’s not just bud for sale. Cookies, brownies, tinctures and countless other takes on marijuana-infused products offer an alternative for those who prefer not to light up.

Welcome to the future of marijuana in Southern Nevada, a place advocates have been fighting to get to for more than a decade since medicinal use of the drug was written into the state constitution.

Although Nevada laws aren’t as liberal as those in Colorado or Washington, where cannabis is legal for recreational use, medical marijuana’s arrival locally is making a splash.

Local governments have been busy writing regulations to corral the industry and prevent Fremont Street from turning into Venice Beach. Savvy pot-trepreneurs are staking out territory for the upcoming green rush into an industry expected to be worth tens of millions of dollars.

After years of being able to smoke medical marijuana without a legal way to obtain the drug — outside of growing it themselves — patients are looking forward to the day this year when they can walk into a dispensary and procure their medicine hassle free.

So what can you expect? And how did we get to this point? Sit back for a look at the past, present and future of medical marijuana in Las Vegas.

Are you eligible?

Nevada’s medical marijuana laws are much stricter than our those of our neighbor to the west, but Nevada’s law does allow new conditions to be added to the list approved for medical marijuana use through a petition process.California’s medical marijuana laws include the above conditions, but also allow it to be recommended to treat “any other condition for which cannabis provides relief.” That small bit of wording has opened a Pandora’s box in California, where patients suffering from anything from trouble sleeping to stress can walk into a pot shop on Venice Beach and receive a medical marijuana card.

About 6,000 Nevadans have medical marijuana cards, a number officials expect to surge once the dispensary system is in place.

Any doctor can recommend a patient for a medical marijuana card, although the drug is not actually prescribed due to its illegality under federal law.

With a doctor’s recommendation in hand, patients can apply for a card with the state at a cost of $150.

Understand the laws

So why not just take a pill?

Marinol vs. natural marijuana

Sold in gel capsules under the brand name Marinol — a synthetic form of THC, one of the primary psychoactive substances in marijuana — has been available to patients since 1985. The drug is typically used to treat nausea and vomiting in patients with cancer or AIDS.

Supporters say Marinol allows for more controlled dosages while avoiding any health risks that may come with smoking marijuana.

Still, many medical marijuana patients prefer to smoke or ingest natural cannabis, finding it more effective at providing relief.

Advocates point out that marijuana contains a variety of therapeutic compounds not found in the THC-only Marinol. The synthetic option also tends to be more expensive than natural cannabis.

Importantly for patients, the therapeutic effects of smoked marijuana begin working within a few minutes, while Marinol can take upward of an hour to set in.

• Federal: Although the government’s stance has softened in recent years, Nevada-based operators will have to live with the risk that the federal government could swoop in and shut them down at any time, wiping out millions of dollars in investment.

Medical marijuana is legal in 21 states, but it’s still outlawed by the federal government under the U.S. Controlled Substances Act.

Cannabis is listed as a Schedule 1 drug — meaning it has a high risk for abuse and no accepted medical use in the eyes of the government — alongside narcotics like heroin, LSD and ecstasy.

The government has backed off in recent years, as highlighted by an August 2013 announcement by the Justice Department that it would not challenge state medical marijuana laws so long as states run tightly controlled operations that keep the drug out of minors’ hands.

So it’s unlikely federal officials will swoop in, but the federal government’s view of medical marijuana could change with a new president in 2017.

• Nevada: Any doctor can recommend a patient for a medical marijuana card, but the drug is not permitted for recreational use.

Cardholders are allowed to be in possession of 1 ounce, 3 mature plants or 4 immature plants.

For those who don't have a card, if it’s afirst or second drug offense and they’re carrying less than an ounce, they’ll be able to pay a fine and avoid jail time. It’s considered a misdemeanor.

Possession of less than an ounce of marijuana is punishable by fines of $600 to $1,000 for the first three offenses. On a fourth offense, possession becomes a felony and comes with a mandatory minimum sentence of one year in prison.

Growing, selling or possessing marijuana with an intent to distribute are all considered felonies in Nevada. Prison sentences run from one to 15 years, with fines up to $50,000, depending on the amount of marijuana involved and any previous drug-related convictions.

• Other states: Medical marijuana legal in 21 states in addition to Washington, D.C.

Where's it legal?

Medicinal marijuana is legal in these states:

Alaska

Arizona

California

Colorado

Connecticut

Delaware

Hawaii

Illinois

Maine

Maryland

Massachusetts

Michigan

Montana

Nevada

New Hampshire

New Jersey

New Mexico

Oregon

Rhode Island

Vermont

Washington

Washington, D.C.

When Nevada legislators started writing medical marijuana laws, they looked to neighboring states for lessons on how — and how not — to set up the industry.

Although California and Arizona have industries that supply marijuana to tens of thousands of patients, how they got to this point offers a starkly contrasting tale.

California entrepreneurs in many ways pioneered the business of cannabis and suffered the growing pains — largely in the form of federal raids — that come with being on the leading edge of a still-controversial issue.

California in 1996 became the first state to legalize medical marijuana after voters approved Proposition 215, a 10-paragraph law that guaranteed a right to use medicinal cannabis but little else. That lack of specificity opened the doors to a Wild West marijuana industry.

The state law left regulating dispensaries and other medical marijuana businesses in the hands of local governments, which crafted piecemeal regulations in an attempt to rein in the industry to varied effect.

In Los Angeles, nearly 1,000 dispensaries were selling marijuana at one point, prompting a 2013 voter-approved law capping their numbers at about 135.

After nearly 20 years, California’s industry has stabilized with the implementation of new state and local laws, with activists turning their attention toward a push for full legalization in 2016.

The industry is still more loosely regulated than in Arizona or Nevada, with medical marijuana cards easier to obtain — about 73,000 people have them — and no cap on the number of dispensaries in the state.

Arizona’s first legal dispensary opened in December 2012 after voters approved medical marijuana in a 2010 vote. The state now has about 80 dispensaries serving 45,000 licensed card holders, with roughly 2.5 tons of medical marijuana sold in 2013.

In Arizona, the number of dispensaries is tied to the number of pharmacies in a city, one of several measures officials implemented after learning from the mistakes of California and other states.

Nevada hopes to learn from Arizona and is implementing a similar top-down regulatory scheme with strict rules on everything from inventory management to site security.

Businesses behind the bud

Pros and cons of legalization

Washington and Colorado have legalized recreational use of marijuana, so should Nevada follow suit? Here are a few arguments for and against.

Pros:

• Marijuana prohibition has been just as ineffective as the ban on alcohol in the 1920s.

• Law enforcement would have more time to address more serious crimes instead of arresting and prosecuting marijuana users.

• Marijuana is less toxic, less addictive and less harmful to the body than alcohol.

• The underground drug market will be replaced with a legal, tightly regulated market.

• Legalization will end a system of marijuana arrests and convictions that have disproportionately affected minority communities.

— The Marijuana Policy Project

Cons:

• Marijuana use will increase after legalization.

• Teenagers will have increased access to the drug, which is especially harmful to young people.

• Drug cartels and the black market will continue to operate.

• Marijuana is three times more potent today than it was in the 1960s and 1970s.

• Social costs associated with marijuana will increase, including more traffic accidents where the driver is under the influence of marijuana.

— Smart Approaches

to Marijuana

Cultivation facilities

Cultivation facilities will be the backbone of Nevada’s medical marijuana industry, producing the thousands and thousands of pounds of cannabis that will eventually make its way to consumers.

Greenhouses and outdoor grows are outlawed in Nevada, meaning all of the state’s marijuana will be grown in temperature and humidity-controlled warehouses stretching up to the size of a football field.

The facilities, which will be limited to industrial parts of the valley, are expected to be the chief job generators in the industry, employing a fleet of horticulturists, plant trimmers and product packagers in addition to traditional warehouse administration and logistics roles.

Growing fields of pot may sound like a stinky endeavor, but cultivation facilities will be required to install air filtration systems as one of several requirements levied by the state that also cover security, product transport and inventory control.

Independent testing laboratory

Before it hits the shelf, each batch of medical marijuana in Southern Nevada must be tested.

The final piece in the state’s medical marijuana puzzle, independent testing laboratories are responsible for verifying the quality and amount of active ingredients in marijuana or marijuana-infused products.

The facilities must be overseen by a certified scientific director with laboratory experience and must follow testing procedures approved by the state. Each batch of marijuana will be tested for several characteristics, including moisture content, potency, pesticide residues and mold.

Production facility

Production facilities are where raw cannabis is turned into the cookies, candies and tinctures that offer an alternative to lighting up. Technically, the facilities are responsible for the production of marijuana-infused or other edible marijuana products.

The facilities will be held to the same health standards as any other food producer in the state. In addition to nutritional facts and a list of ingredients, products from these facilities must also include the amount of marijuana included.

Medical Marijuana

A law enforcement officer steps over police tape during an investigation at a medical marijuana clinic at East Sahara Wednesday, Sept. 8, 2010. Authorities say police and federal agents are serving search warrants at several locations in an investigation of medical marijuana clinics in and around Las Vegas. Launch slideshow »

Dispensary

• What is it?

Dispensaries will be the most visible part of Nevada’s new medical marijuana industry, setting up shop on street corners and in strip malls throughout the valley.

As the sole retailer, dispensaries will acquire cannabis from growers and sell it to card holders. Along the way, they’ll be responsible to electronically report each gram of marijuana that passes in or out of their shop.

Dispensaries will be allowed to open in commercial zones, meaning you’ll be able to find them anywhere you might see a Walgreens or CVS. Elected officials have emphasized spreading the county’s allotment of 40 dispensary licenses to all corners of the valley to ensure that medical marijuana is only a short drive away for patients, no matter where they live.

• What it takes to own one:

Opening a dispensary won’t be easy, and that’s by design. The Legislature put in hurdles a potential entrepreneur will have to clear before getting a license, a measure meant to weed out unscrupulous operators.

The highest bar is proof that an applicant has at least $250,000 in liquid assets.

To obtain one of the 40 licenses that will be granted in Clark County — applicants must pass a criminal background check, present a detailed plan covering the location, operations and security of their business, and pony up a $5,000 application fee to the state. Local jurisdictions also charge application fees — ranging from $5,000 up to $30,000.

Even if you pass all of these tests, you’ll be only part of the way there. Once applications are filed, both local and state governments will have to sign off before a business can open.

Its potential impact

    • Police

      Get pulled over by police on your way home from the dispensary? No need to worry about the marijuana in the glove compartment if you have a medical card.

      Law enforcement agencies have been dealing with medical marijuana patients for more than a decade and follow a simple maxim.

      “Our position has always been that as long as those folks have been following the (medical marijuana) law, then obviously there’s no reason for us to take action against them,” said Chuck Callaway, Metro Police’s director of intergovernmental services.

      Callaway said that policy won’t change with the advent of commercially available marijuana for patients.

      Although it helps if patients carry their medical cards with them, it’s not a requirement. If need be, officers can verify a cardholder’s status during a traffic stop, just like they would a driver’s license, he said.

      The biggest change the new system will bring for police is greater clarity when enforcing drug laws, Callaway said.

      Officers have had trouble with patients who had medical marijuana cards but were growing more than their allotment or were illegally distributing the drug to other cardholders. In those cases, offenders could be arrested, Callaway said.

      “I think this is going to make our jobs easier in some respects. Some of that grey area will be cleaned up,” he said. “Now it’s black and white. If you’re not operating under a business license to run a cultivation facility, you can’t grow.”

    • Economic

      Even though the first ounce of legal marijuana has yet to be sold in Nevada, investors are seeing green.

      The lure of an industry that could be worth tens of millions of dollars has enticed investors to drop hundreds of thousands of dollars preparing their applications, with millions more to be spent by those who get licensed to launch their businesses.

      Whether the investment pays off remains to be seen, but signs point to a potentially lucrative industry.

      In Arizona, about $40 million worth of medical marijuana was sold in 2013, the first year dispensaries were open, while Colorado’s medical marijuana industry peaked at about $328 million before the drug was legalized for recreational use this year.

      The decision to legalize marijuana in Colorado and Washington is paying dividends to the states’ coffers thanks to high tax rates on recreational pot. Colorado collected $2 million in tax revenue in January, the first month of legal sales, but Nevada likely won’t see the same boost. The state has imposed a 2 percent sales tax on medical marijuana sales to cover costs of overseeing the industry, but it won’t generate enough to prop up other parts of the budget.

      The economic impact of medical marijuana will be felt more profoundly on the local level, with estimates that it could produce upward of 2,000 new jobs in Clark County.

    • Real estate

      Business owners looking to run a marijuana grow-house, production facility or dispensary here have slim pickings for real estate, brokers say. Lawmakers are restricting where in town they can work, and landlords are wary of signing tenants for fear of breaking federal law and violating mortgage covenants with their banks.

      Brokers say they get calls every day from prospective medical marijuana businesses, but by the first half of April, no property sales or leases had been finalized.

      All told, there are far more people looking for space than there are available buildings, as landlords have several concerns about the nascent industry, MDL Group broker Jarrad Katz said.

      Katz, who represents warehouse owner Harsch Investment Properties, the valley’s largest commercial landlord, said many property owners in town are unwilling to consider a marijuana tenant. Moreover, the buildings in his portfolio are at least 90 percent occupied, he said, so his clients are not desperate to fill space.

      And prospective business owners face a host of restrictions in Las Vegas.

      State law requires medical marijuana businesses to be in commercial or industrial-zoned areas and at least 1,000 feet from schools and 300 feet from day-care centers, parks, houses of worship and other community centers. The law also caps the number of dispensaries in Clark County at 40.

      Additionally, cultivation facilities must be at least 660 feet from residences.

    • Casinos

      Just because you have a medical marijuana card, doesn’t mean you’ll be able to fire up a joint at the blackjack table.

      Casinos and hotels along the Strip have banned marijuana in public places for years, a policy that won’t change with the opening of dispensaries.

      Patients visiting Las Vegas can medicate in their private hotel rooms, but they might be asked to stop by security if the smoke and smell bother other guests.

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