Nevada Gives out First Provisional Licenses for its Consumption Lounges

Ever since the legalization of Adult use cannabis in Nevada back in 2017, cities like Las Vegas and Reno have become the gateway for middle America’s entry into cannabis culture. However, there’s always been a catch: they can’t legally smoke it or consume it anywhere in the federally regulated casinos or in their hotel rooms. People caught consuming on the Vegas strip can be fined up to $600, which is money the casinos and restaurants would rather have spent in their own outlets. Luckily, the state has been moving forward on consumption lounges that would give tourists and even locals the sort of social space which could wind up defining cannabis culture for the 21st century.

The state’s Cannabis Compliance Board (CCB), has brought the state closer to this goal before the end of 2022 by selecting the state’s 20 first independent consumption lounges. Chosen by the CCB alongside the auditing and consulting firm Henry and Home, 10 social equity and non-social equity candidates each were selected at random from the 79 candidates which signed up in the two-week application window back in October. Together with the 30 retail cannabis candidates, all of these candidates now receive prospective licenses, and the clock has now started for them all to get their ducks in a row for their grand opening in 2023.

A New Model for Cannabis Consumption and Distribution

Unlike the standalone consumption lounge candidates, there is no cap on the amount of licenses for the established cannabis retail players in Nevada. That’s because of the model for distribution envisioned by the state. For starters, no one will be allowed to bring their own cannabis to a consumption lounge. They will have to purchase it at the consumption lounge, which will in turn need to procure it from a specific retail outlet. They will have to consume it in a separate space in the lounge set aside for consumption in the lounge, and they can’t take it outside of the lounge. Aside from the procurement, it’s very much like a bar.

Dispensaries with their own consumption lounges don’t need to make these procurement deals, but it does suggest what could become a paradigm shift of consumer focus away from the dispensary and towards the lounge. Christopher LaPorte of cannabis hospitality, management and consultation firm Reset Vegas put it this way to Las Vegas Weekly, “Dispensaries are retail shops—they are the place where you buy your weed. Now, they’ll [become] their own distribution centers of sorts. We can potentially see this market grow exponentially, because maybe people don’t want to go to a dispensary to buy their weed. But maybe they’ll go to a social use lounge to experiment with cannabis.” Or, more likely, they will simply expand consumer choice, where people will opt to either consumer cannabis at a commercial space or purchase it for their own purposes, just like alcohol.

What's in Store

Unless you yourself applied, it’s quite possible that you may not recognize many of the winning applicants chosen by the CCB on December 1st. Many of them incorporated in October, 2022, and as of the time of this article’s writing, some, like KV Group, LLC and GGCPA SE, Inc., both registered in Nye County, have their prospective licenses in hand, but specifics on their locations, business models and other details are not currently known.

They will have to make this all happen in the next 120 days. During that time, they will have to supply the CCB with a host of documents, from a two-year business plan to Standard Operating Procedures for cannabis handling, security and inventory control, in order to keep their license. Speaking to the Las Vegas Weekly, A’Esha Goins of cannabis consultancy CEIC estimates that applicants will need at least $1.2 million to get their lounges off the ground.

But as anybody who remembers the super-expedited rollout of adult-use cannabis in Nevada can tell you, this process is likely to move pretty quickly. Whether we’ll get comedy clubs, performance spaces or the next Rat Pack hangout depends, like so much in Nevada, on the roll of the dice. But after years of pandemic delays and bureaucratic assembly, the Silver State is finally going to show the world what the frontiers of cannabis leisure looks like. You’ll want to be here for this, believe us.