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June 16, 2021

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Marijuana consumption lounge bill clears initial vote in Nevada Legislature

Sahara Wellness Lounge

Wade Vandervort

An interior view of the future location of Sahara Wellness’ marijuana consumption lounge is seen here Friday, July 5, 2019.

CARSON CITY — Almost five years after recreational cannabis was legalized in Nevada, state lawmakers are working toward a potential fix to a problem long plaguing the industry: Where can people actually consume cannabis?

Assembly Bill 341, passed out of the Nevada Assembly Thursday on a 29-12 vote, would create the first legal spaces outside of private property to consume cannabis in Nevada.

The bill’s passage comes one month before a 2019 moratorium on local governments’ ability to license the lounges on their own is set to expire.

“If the state (doesn’t) take some action, I think we would potentially have a situation where different local governments are operating under different rules. The state would not have the ability to come in and regulate and not have the ability to collect the licensing fees and the application fees,” said Assemblyman Steve Yeager, D-Las Vegas, the bill’s sponsor.

This is the third consecutive legislative session that Democratic lawmakers have attempted to legalize consumption lounges. With the session wrapping at midnight on Memorial Day, lawmakers in the Senate will have to move quickly in the coming days.

Layke Martin, the executive director of the Nevada Dispensary Association, said the association is in support of the bill. The legislation could give tourists a place to consume cannabis while potentially giving an economic boon to dispensaries, she said.

“We have many members who are interested in exploring this new opportunity,” Martin said. “They’ll have the opportunity to apply for lounges that are attached or adjacent to dispensaries.”

The bill would call for lounges attached to existing dispensaries or independent lounges separated from retail dispensaries. A dispensary owner would not be able to own an independent lounge, and could only own one lounge attached to a dispensary.

Independent lounges would be allowed to sell single-use cannabis products, which will be further defined by the Cannabis Compliance Board if the bill is passed. Alcohol could not be sold in any consumption lounge.

The board has estimated a near-$6 million price tag in future biennia for the bill tied to further hires.

The board will initially only be able to issue 20 independent lounge licenses. If licenses for lounges attached to dispensaries exceed 20, then the board can issue an equal number of independent lounge licenses.

Half of these independent lounge licenses are to be reserved for “social equity applicants,” a move that Martin said the dispensary association supports. This is defined broadly as any applicant who has “been adversely affected by provisions of previous laws which criminalized activity relating to cannabis.”

The compliance board will be tasked with defining “social equity” more specifically.

“I think this bill, really because of the hard work of a lot of people, has gotten us to a place where almost everybody industry or otherwise, is happy with where it is,” Yeager said.

Cannabis retail establishments must be set up at least 1,500 feet away from any establishment with an unrestricted gaming license. That provision would also be in place for consumption lounges under the bill.

Yeager said that while he had not received support from gaming interests on the bill, they had also not stood in opposition.

“When we did lounges, we maintained that same distance separation and I think that caused gaming to say ‘hey, as long as you do that, we’re not really interested on way or another,’ Yeager said. “That was important to me because I think the last couple of sessions, I’m not sure they were in that position, I think they were more in the opposition. To get them to neutral, I think helps the bill move long.”

Clark County Commissioner Tick Segerblom, who led the initial attempt to legalize consumption lounges in 2017 while a state senator, said the legalization of consumption lounges has been a goal of his since cannabis was made legal.

Then-Gov. Brian Sandoval, had signaled he would not sign the bill in 2017, leading to its death in the background after it had passed the Senate, Segerblom said.

Segerblom said that marijuana is a “social drug,” and that people are looking for situations to be able to consume cannabis with their friends. It’s a “little bit hypocritical" to advertise Nevada as a marijuana destination without creating legal places to consume it, he said.

“The sooner we get out in front of this the better,” he said. “We can really be known as the place to go.”

He said that legalizing consumption lounges could also open the door to events like allowing consumption in conjunction with massages or Pilates.

“What do you do when you go back to Kansas? You brag about that you went to Caesars and got a marijuana massage,” he said.