New legislation passed by the Nevada state legislature earlier this year went into effect last Friday, giving recreational cannabis business owners the ability to apply for licenses to open on-site consumption lounges. The state Senate and Assembly voted to allow consumption lounges five years after Nevada voters approved the legalization of recreational cannabis in the state in 2016, with the first opening in 2017.
Consumption lounges allow adults to smoke, eat, or dab cannabis products. Right now, cannabis is illegal inside casinos and hotels, giving tourists few options for legally consuming the products they buy at cannabis stores. The new legislation allows an existing dispensary to add a space for a lounge, with only one lounge allowed no matter how many locations a dispensary has. The other model permits independent businesses to build a consumption lounge with single-use cannabis products for sale.
On Friday, the Cannabis Compliance Board started fielding applications for cannabis lounges, which, once licensed, become the first places consumers can legally partake recreational cannabis. The new permitting system prioritizes Black and Latinx applicants who have been “adversely affected by provisions of previous laws which criminalized activity relating to cannabis.” The board uses a points-based system to award licenses, a measure implemented after a study showed that the state’s cannabis industry skewed toward white and male owners. The first 10 of 20 independent cannabis consumption lounges must be awarded to social equity applicants.
The licensing fees start at $10,000 for stand-alone consumption lounges and go up to $100,000 for dispensaries that want to add a consumption lounge, but that fee can be reduced for applicants affected by previous drug laws. Statewide, 45 different ownership groups operate 86 cannabis retailers, and each ownership group can open one consumption lounge license. About 60 retailers already expressed interest in adding