Nevada Marijuana Regulators Have Received 100 Consumption Lounge Applications, With Plans To Approve By Early 2023

Nevada marijuana regulators say they received 100 applications for the state’s first-ever marijuana consumption lounge licenses during a short submission window last month, with plans to begin issuing approvals in “early 2023.”

The Nevada Cannabis Compliance Board (CCB) started accepting the applications on October 14 and closed submissions on October 27. This comes more than a year after Gov. Steve Sisolak (D) signed a bill from Assemblyman Steve Yeager (D) legalizing consumption lounges.

Current retailers were able to apply for one license category to build lounges into their existing operations, and there will also be independent lounges that can enter into a contract with a retailer to purchase and prepare ready-to-consume marijuana products for resale at brand new facilities.

According to a press release, CCB received 20 applications from existing retailers, 50 from independent lounge applicants and 30 from independent social equity applicants.

“Per state law, the CCB may issue 20 independent cannabis consumption lounge licenses, half of which are designated for social equity applicants,” the board said. “The CCB will now review all independent cannabis consumption lounge applications to ensure applicants have met all necessary requirements.”

“The CCB anticipates conducting two drawings via a random number selector in early December to determine the issuance of independent cannabis consumption lounge licenses for non-social equity and social equity applicants,” it said. “The CCB anticipates the first lounges to be licensed and able to open in early 2023.”

When it comes to lounges at existing dispensaries, “there is no competitive selection process required,” CCB said. “Upon receiving final inspection, licensure, and approval by the Board, retail cannabis consumption lounges may open.”

Regulators previously said that they expected to receive about 40-45 applications from retailers. They didn’t have an estimate for how many independent lounge applications would be submitted.

CCB approved regulations for marijuana lounges over the summer. The law could also allow businesses that couple cannabis with yoga, serve infused food, offer THC-aided massage therapy or incorporate marijuana in other ways.

The governor touted Nevada’s lounge law in a 4/20 op-ed for Marijuana Moment this year, writing: “The idea isn’t new, but no one is doing it like we are in Nevada.”

“While most of the consumption lounges in other states don’t offer food, beverages or other entertainment options,” he said, “Nevada’s lounges will be a one-stop entertainment shop to create jobs, grow the industry and boost our economy.”

Under the board-approved rules, consumption must be hidden from public view. Smoking and vaping must take place in a separate room of the lounge or be prohibited entirely. Single-use or ready-to-consume cannabis products can’t be brought off-site. And businesses must provide water to every guest free of charge.

The lounges will also be cannabis-only. No alcohol, tobacco or nicotine products can be sold.

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Other safety-related regulations require lounges to establish plans to limit cannabis-impaired driving and minimize workers’ exposure to secondhand smoke. Guns are prohibited, surveillance is required and procedures must be in place to reduce and respond to potentially violent or harassing behavior.

Single-use cannabis products are limited to no more than 3.5 grams of usable cannabis under the regulations, with “extracted inhalable cannabis products” (such as vaping or dabbing products) limited to 300 milligrams of THC. All single-use products with more than 1 gram of usable cannabis, and all extracted inhalables, must carry written potency warnings.

Individual servings of ready-to-consume edible products are capped at 10 milligrams THC, a fairly standard amount in states that have legalized cannabis for adult use.

Topicals, meanwhile, are limited to 400 milligrams of THC. Transdermal patches and all other cannabis products can have no more than 100 milligrams THC and must carry a written warning if they have more than 10 milligrams.

Marijuana sales totaled just under $1 billion in Nevada in the 2022 Fiscal Year, generating more than $152 million in cannabis tax revenue, officials reported this month. Most of the proceeds are going toward funding schools.

The hope is that the cannabis lounge option will further stimulate sales when those services launch.

Sisolak has committed to promoting equity and justice in the state’s marijuana law. In 2020, for example, he pardoned more than 15,000 people who were convicted for low-level cannabis possession. That action was made possible under a resolution the governor introduced that was unanimously approved by the state’s Board of Pardons Commissioners.

Meanwhile, a Nevada judge ruled last week that the Board of Pharmacy’s classification of marijuana as a Schedule I substance violates the state Constitution and that the agency “exceeded its authority” by making that designation.

The ACLU of Nevada filed a lawsuit earlier this year, alleging that despite voter-approved legalization police have continued to make marijuana-related arrests because the Board of Pharmacy has refused to remove cannabis from its controlled substances list.

That has effectively created a legal “loophole” that the civil rights group says conflicts with long-standing constitutional protections for medical marijuana patients.

Separately, in August 2021, a former Las Vegas police officer who sued after facing termination for testing positive for marijuana scored a significant procedural victory, with a district judge denying the department’s request for summary judgement and agreeing that state statute protects employees’ lawful use of cannabis outside of work.