Sunday, Oct. 13, 2013 | 2 a.m.
They’ve got a lot of money and a big plan to peddle marijuana throughout Clark County, but they’re not a drug cartel pushing pot on the streets.
They’re high-profile lawyers, consultants and investors, and their clientele appears to be mostly middle-aged patients suffering from severe pain.
Nevada’s Legislature legalized medical marijuana dispensaries earlier this year, and now monied interests are lining up to cash in on the blossoming bud business.
“We’re 'Star Trek' right now; we’re going where nobody has gone before,” Vicki Higgins, secretary of the Wellness Education Cannabis Advocates of Nevada, said about the new law.
The law makes the drug legal for medical consumption, and the state will be granting a limited number of dispensary licenses next year, prompting a crush of interest that has already made medical marijuana a multimillion-dollar industry in Nevada.
Like Nevada’s Wide Open Gambling Bill that legalized gambling in Nevada in 1931, investors see this as a Sky-High Marijuana Bill that could earn them lots of money.
“It exceeds our wildest dreams,” said Sen. Tick Segerblom, D-Las Vegas, a sponsor of the medical marijuana dispensary bill. “When we wrote this law, we said we wanted to make it attractive commercially so that people with money and resources will come here and fight for these licenses. They’re coming here in droves.”
Similar to restricted gaming licenses, these pot prospectors first need to obtain one of 40 licenses to grow, test and sell marijuana in Clark County.
Applications for licenses are due in April, and many of the valley’s big-money lawyers are requesting fees of up to $100,000 to prepare a medical marijuana establishment application, according to lawyers, investors and medical marijuana patients.
“People are kind of shopping for consultants,” said Lisa Mayo-DeRiso, a Las Vegas consultant. “A guy (called and) said ‘I got your number and we have half a million dollars and we're looking to get an application.’”
Earlier this year, Sen. Mark Hutchison, R-Las Vegas, promised other legislators there would be no smoke-filled rooms, no potheads lighting up joints on the patios of dispensaries if they voted for the dispensary bill.
“This will not be the Dr. Feelgood hanging out in a Jerry Garcia smoking lounge with a giant pot flag hanging outside the door,” he told legislators in June.
So far, he’s on track to be right.
Just look at who’s trying to make a buck in the Nevada marijuana industry:
• Joe Brezny, a former Nevada state director for 2012 Republican presidential candidate Mitt Romney, is running the Nevada Cannabis Industry Association.
• Assemblyman William Horne, D-Las Vegas, is getting paid to help prepare a medical marijuana license application.
• The MMJ PAC, a medical marijuana political action committee, has formed in Nevada. It purports to support candidates who support the medical marijuana industry.
• Many of the Las Vegas Valley’s major law firms also either have medical marijuana clients or are hoping to gain them.
“People in our shoes try to take on clients who are businessmen, above board,” said Sean Higgins, a gaming lobbyist with the Gordon, Silver law firm in Las Vegas who has a client hoping to apply for a license. “Our reputation is as on the line as well as theirs.”
• Derek Connor, an attorney at Connor & Connor in Las Vegas said his firm used to be split between personal injury and criminal litigation. Now he said he spends three-quarters of his time with medical marijuana clients.
“It’s taken over a huge area of my practice,” he said. “We’ve seen people who are well-established, well-connected Nevada families down to housewives interested in this as a way to make money.”
Nevada is just one of several states making medical marijuana accessible.
But Nevada’s new law comes more than a decade after Nevada voters amended the state constitution to allow for access to medicinal marijuana.
It wasn’t until this year that the Legislature passed a law that allows a system for people to get their medicine in a convenient, regulated and legal fashion.
Prior to this new law, patients could have marijuana but couldn’t get seeds. They could grow their own plants but couldn’t buy the product, meaning sick people had to learn some botany to legally get their medicine.
The new dispensary law replaces that murky legal milieu.
By design, it’s not going to be easy to open a medical marijuana establishment in Nevada. Somebody who wants to open a kitchen for cooking edible marijuana products or start a pharmacy-like dispensary needs to have at least $250,000 in liquid assets — something like cash, not a fixed asset like a house — and must pay additional licensing, background check and application fees.
The law also smiles upon applicants with business experience, medical marijuana expertise, an existing location in a commercial or industrial zone, a record of paying taxes in Nevada, and an “integrated plan for care, quality and safekeeping of medical marijuana from seed to sale.”
The monied pot peddler eager to dive through all these hoops will greet a relatively small Nevada market.
Right now, about 4,500 Nevadans have obtained medical marijuana cards through the state’s health division.
But the new law allows medical marijuana cardholders from other states to shop at Nevada dispensaries in some circumstances.
With the dispensaries slated to open in late 2014, Nevada could welcome the first of many legal medical marijuana tourists.
The Nevada bud boom isn’t a guarantee.
Marijuana remains illegal under federal law. So federal government workers could raid and close dispensaries at any time, wiping out millions of dollars in investments.
But the marijuana landscape has changed in recent months with a U.S. Department of Justice memo that has emboldened investors and marijuana advocates.
“The federal government had been demonstrating and recently made it abundantly clear that it will respect state marijuana laws when marijuana is being properly regulated,” said Mason Tvert, director of communications at the Marijuana Policy Project.
The Nevada law has strict guidelines for electronic verification of cardholders, inventory tracking, quality control, security and licensure. It also mandates a 2 percent sales tax on medical marijuana designed to offset the state’s cost for administering and enforcing these regulations.
“The Nevada law strikes one of the most reasonable balances I have seen between ensuring safe access for patients, creating a tightly regulated model that is not open to malfeasance, and providing legitimate business and economic opportunities for business people,” said Betty Aldworth, deputy director of the National Cannabis Industry Association.
But those business opportunities aren’t guaranteed.
Even with the state constitutional provision mandating access to medical marijuana, local governments are still debating what kind of zoning restrictions they’ll place on dispensaries, grow houses, edibles kitchens and other medical marijuana establishments.
“The first decision will be: Do we want these types of businesses in the city of Las Vegas?” said Las Vegas Councilman Stavros Anthony, who was a former vice narcotics captain with Metro Police. “If we do, where are they going to be located, how are they going to be handed out?”
State regulators also have a chance to develop stricter rules.
While most lobbyists, consultants and patients say the state has been open and responsive as it begins crafting state regulations, some are concerned that the industry could face so many regulations that investors might ultimately determine that they cannot make a profit here.
“A lot of people see this as a cash cow,” said Peter Krueger, president of the newly formed Nevada Medical Marijuana Association. “I'm not so sure if it's a cash cow when government gets through with it.”
Mayo-DeRiso said that well-crafted regulations and proper controls can only enhance the industry in the same way they bolstered Nevada’s gaming industry.
“We are the privileged license capital of the world,” she said. “We know how to monitor privileged licenses, so we actually should be really good at this.”
Meanwhile, without regulations and zoning rules in place, nobody wants to talk about who’s actually applying.
Patients, lawyers, policy advocates, trade associations and consultants speak vaguely of “California investors” or “very high names in the city.”
“That’s kind of a confidential thing at this point,” Higgins said. “Many people are looking into this with an eye toward opening, but unfortunately, without the regulations being specific, many of the individuals and groups considering this are just waiting.”