Nevada is home to some of the best scenery in all of the United States. Amazing vistas are everywhere and the desert environment really adds to the unique feel of this state. Of course, it’s home to Las Vegas, a shining jewel in the inhospitable climate. But this state is also a hotbed for cannabis politics. They started selling recreational cannabis in the latter end of 2017, and initially, there were worries they wouldn’t meet demand, but things have turned out alright. On opening day, long lines exploded out of every dispensary operating and people walked away happy with their products. For our purposes, we are going to explore this market, and considering they have both a medical and a recreational cannabis industry, we’ll dive into both.
The main measures that legalized medical cannabis in Nevada are Question 9 and Senate Bill 374. Question 9 was passed in 2000 and allowed for patients to possess up to 2.5 ounces of cannabis or grow up to 12 plants. Senate Bill 374 passed in 2013 and gave authority to license and regulate medical cannabis businesses.
In order to become a patient, individuals must get a written recommendation from a qualifying physician and register with the state. One thing they do in Nevada, which you would be hard-pressed to find else where, is that they accept out of state patients. And unlike states like New York, there are no restrictions on the type of cannabis to be sold. Flower, concentrates, CBD extract, it’s all fair game.
However, a patient is only allowed to cultivate their own cannabis is if they live more than 25 miles from a dispensary, cannot travel, or nearby dispensaries do not offer what they need.
Their list of qualifying conditions isn’t the longest, but includes some pivotal conditions for a flourishing medical market. Qualifying conditions include, AIDS, cancer, glaucoma, PTSD, and conditions – or whose treatments – produce persistent muscle spasms, including multiple sclerosis, seizures, severe nausea, or severe pain.
The regulations around this industry are heavy. Rules are comprehensive, detailed and strict. The state caps the number of dispensaries allowed, and businesses must meet a host of requirements covering everything from security and testing to operational and logistical regulations. Officials are also developing more rules for labeling, packaging, dosing, and testing.
These dispensaries are allowed to operate for profit and an application fee will cost 5,000 dollars. A license on the other hand will cost 30,000 dollars upfront with a 5,000 renewal fee. One thing that is odd about this state’s licensing regime is that it is actually cheaper to become a cultivator than it is to open a dispensary. A cultivators license costs 3,000 dollars with a 1,000 dollar renewal fee. However, applicants for any license type must provide proof of at least 250,000 in liquid assets.
Of the 66 medical dispensaries that are allowed to be operating in the state, there are 55 as of 2017. These businesses serve roughly 26,500 patients, which is a moderately high number considering the size of the state. These patients generate roughly 55 million in revenue annually.
Their recreational market on the other hand was passed by a ballot measure, Question 2, in 2016, by a margin of 54 percent to 46 percent. Not a landslide victory, but a victory none the less. Question 2 allows individuals in Nevada to purchase, possession and consumption of 1 ounce or less of cannabis or one-eighth of an ounce or less of concentrated cannabis products, if they are 21 years or older. People are allowed to grow up to 6 plants for personal use. But cultivation must take place in an enclosed area with a lock. Similarly, as to their medical market, there are no restrictions on the type of products to be sold.
Business regulations in this sector are heavy. Though subject to change, the initial voter-approved law clearly indicates that the cultivation, manufacturing, testing, transportation and selling of cannabis will be strictly controlled through state licensing and regulation. Cannabis business owners and board members will also be subject to background checks before a license is granted.
Obviously, these businesses operate for profit. All applicants are required to pay a one-time application fee of 5,000 dollars, with a license costing 20,000 for a retail cannabis store, with a 6,600 dollar renewal fee.
Unlike in other states, the number of total businesses is dependent on a county’s population. This puts estimates of the total number of stores at 130 statewide. These stores serve approximately 300,000 customers and generate an estimated 150 million in revenue.
However, some cannabis businesses in Nevada are struggling, due to the abundance of dispensaries. Final regulations for the recreational market are still being developed.
Unfortunately, opportunities for new, plant-touching businesses in the recreational market are extremely limited. But existing medical dispensaries that obtain recreational permits are primed to cash in on the state’s massive tourism market, which is expected to account for most of the sales. There remains a lot of opportunity for ancillary businesses to pop up. There will probably be many cannabis friendly vacation rentals and they are expected to be in high demand. They are also considering cannabis consumption lounges, which if allowed, present even greater opportunities to make money.
There were long lines, and product shortages at first, but this market is well on it’s way to success. Because of Nevada’s large tourism industry, the state is likely to become a major player on the international cannabis scene.