Medical Marijuana has arrived in Las Vegas, but will all the rules harsh Sin City’s Buzz?

Las Vegas ReLeaf

(Joel Warner, International Business Times) – Las Vegas ReLeaf prides itself on being the Bellagio of medical marijuana dispensaries. Located in a strip mall just off the famed Las Vegas Strip, the operation’s 3,700-square-foot interior is filled with polished, luxurious details: dark-wood surfaces, bronze accents, shimmering tiled walls. An audio system emits relaxing jazz tunes as budtenders, dressed in all black, stand at the ready. LED light bars behind the counter shift between hues of neon, and bright oversized flat screens on the walls broadcast deals and marijuana factoids, like the origins of the term “Rick Simpson Oil.”

But there’s one thing Las Vegas ReLeaf is missing compared to its casino counterparts: the crowds.

Most days, the operation is fairly quiet. Even early November’s Marijuana Business Conference and Expo, the industry’s largest national trade show, didn’t significantly boost sales. While Las Vegas ReLeaf was the first dispensary to launch in the city of Las Vegas, just ten customers showed up for its October grand opening.

Thanks to strict city rules around marijuana, the dispensary has struggled to let potential customers know that it’s up and running, much less where it’s located. Among other restrictions, Las Vegas ReLeaf can’t be listed on the strip mall’s main billboard alongside the names of its neighbors, like a 7-Eleven, a nail salon and a massage parlor.

“We have had a lot of downtime,” says Michael Hayford, co-owner of Las Vegas ReLeaf. “But at least, we’ve been able to keep the store really clean.”

Such is the world of Nevada’s new approach to medical marijuana. Passed by legislators two years ago and rolled out over the past several months, the state’s dispensary system is the first in the nation to offer reciprocity, meaning that medical marijuana cards issued anywhere in the country are honored in the state. In other words, while officials in other states like Colorado are loath to even acknowledge the existence of cannabis tourism, Nevada is actively courting medical marijuana patients visiting from other states. A legalization initiative already approved for next year’s ballot will double down on making the state – in particular, Las Vegas – the country’s top marijuana destination.

“This is a city where people come to let their hair down and have fun. I cannot imagine a better match for cannabis tourism,” says Joe Brezny, executive director of the Nevada Cannabis Industry Association. “We have legalized gambling, we have legalized prostitution, we regulate vice quite well here.”

But in a place like Nevada, regulating vice comes with a lot of rules. Nevada officials have encumbered their new medical marijuana regime with some of the most stringent policies and controls in the nation. This is how the state keeps its celebrated indulgences safe and professional, but it’s also how its communities – and businesses that have sprung up to keep those indulgences in check – make money. The results are myriad bureaucratic hassles, a cannabis scene controlled by those with the most money and connections, and local medical marijuana patients concerned that the system benefits everyone but themselves.

The situation illustrates one of the main points of tension for the growing marijuana industry nationwide: How do you adequately regulate a substance long seen as taboo while also giving burgeoning businesses the flexibility and support they need to flourish and grow? If Nevada can’t solve this conundrum, could all those high rollers who’ve already bet big on making getting high part of the state’s celebrated hedonism end up losing their shirts?

Regulatory Hurdles

While Nevada voters legalized medical marijuana in 2000, the law was extremely restrictive, requiring patients to grow their own marijuana but not specifying how they could legally obtain seeds or clones to do so. That changed in 2013 when the state legislature passed a bill legalizing dispensaries and other aspects of a fully functioning medical marijuana industry.

The law, which allowed for up to 66 dispensaries statewide, was notable because of its reciprocity measure. Honoring other states’ medical marijuana cards fit with Nevada’s history of building its industries – and tax revenues – around those who live elsewhere. According to Derek Connor, a Las Vegas attorney who represents a variety of local medical marijuana businesses, Nevada’s in-state medical marijuana population, which recently exceeded 12,000 patients, will likely top out at around 60,000 people. (Nevada counts 2.8 million residents, roughly half the population of Colorado.)

That’s not much to build an industry around, but the equation changes once you factor in out-of-state travelers. According to official records, last year 1.1 million Americans had medical marijuana licenses, or roughly .34 percent of the total population. If that same fraction of Las Vegas’ 41 million annual visitors have their marijuana cards and use them, the 40 dispensaries allowed to open in the area could be looking at another 140,000 potential customers a year. That number could be just the beginning as more and more states legalize medical marijuana. One industry insider predicted the Las Vegas cannabis market alone, where up to 40 of the state’s dispensaries could be located, might reach $1.5 billion annually.

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