Six prospective cannabis lounge licenses awarded in Las Vegas

Six prospective licenses for cannabis consumption lounges reserved for social equity applicants were issued Thursday after a random drawing was conducted by the Nevada Cannabis Compliance Board.

Kora Cannabis Lounge, LLP, in Las Vegas and Nevada Consumption Lounge LLC — along with four unnamed groups — were chosen during the random selection event. Because of Nevada cannabis law that holds that applications are “confidential and may be revealed in whole or in part only in the course of the necessary administration,” it wasn’t immediately clear where the applicants’ lounges will be located should they eventually receive full licensing.

“Just want to say thank you to everyone involved in the process today and congratulations to those who are selected,” James Humm, executive director of the CCB, said, noting that applicants would be updated on their application status online.

Issuance of the prospective licenses comes almost three months after the CCB said it had conducted an internal audit of licenses reserved for social equity applicants and found that six of the 10 applicants drawn during a Nov. 30, 2022, random number selection event were ineligible.

To qualify for a social equity license, applicants must meet a set of criteria established by the CCB and Cannabis Advisory Commission Social Equity subcommittee, which were directed by state law to create requirements for social equity applicant eligibility. Among the criteria is that the applicant or an immediate family member must have been convicted of a marijuana-related crime before marijuana use was legalized in Nevada. Another criteria is that the applicant must reside in an area significantly impacted by poverty and high arrest rates — a requirement the CCB said it determined using data from two nationwide studies, the Neighborhood Atlas and the Opportunity Atlas.

Applicants must live in an area with an incarceration rate (as of 2010) in at least the 90th percentile, or roughly 3.3%, according to the Opportunity Atlas, and with an Area Deprivation Index of 7 or more from the Neighborhood Atlas, according to the CCB.

Humm requested the internal audit in January, a month after he assumed his post, pointing to the “importance of ensuring the integrity of the licensing process,” the CCB said.

The CCB in July said its investigators noticed a “disconnect” in the residency requirements and found that over half of the social equity applicants randomly selected in 2022 had results from the Opportunity Atlas that were miscalculated.

Residential addresses from all 30 of the 2022 applicants were requested by the CCB for review. During its review, the CCB found that at least eight of the 20 undrawn applicants provided addresses that met the residency requirement on both the Neighborhood Atlas and the Opportunity Atlas at the time of the first licensing round.

The six selected applicants that were discovered to be ineligible were informed that they would no longer be allowed to proceed in the licensing process. Meanwhile, the eight that were found to have provided qualifying residential addresses were asked if they’d like to be entered into Thursday’s random number generator selection event. All eight applicants opted in.

To help applicants avoid financial burden, the CCB said it would be returning the $2,500 application fee to all 20 social equity applicants that aren’t proceeding in the licensing process.

Gaining a prospective license is just another step on the way to being able to open a cannabis consumption lounge in Nevada. Prospective license holders must undergo a suitability investigation by the CCB before they are granted a conditional license, which — along with a few other inspections — allows them to work toward establishing and opening their cannabis consumption lounge.

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