Learning from Las Vegas: 5 lessons from 5 years of legal weed in Sin City

It’s hard to believe five years have passed since Nevada State Senator Tick Segerblom stood on a podium at the Reef Dispensary and welcomed the world to “Amsterdam on Steroids.” On the eve of the adult cannabis sales launch on July 1, 2017, Segerblom touted Las Vegas as an unparalleled legal marijuana paradise.

Las Vegas boasts drive-through shopping and the two largest weed shops in the world, but opposition from casinos has delayed the opening of consumption lounges.

“People will come from all corners of the world to experience this,” he promised.

As Sin City celebrates its fifth anniversary of adult cannabis sales this summer, some of Segerblom’s prophecies have come true. Las Vegas undoubtedly stands out from other legal markets. The two largest pharmacies in the world are only 10 minutes away by car; Weed Store Drive-Thrus allows partygoers across the city to buy flowers, edibles and cartridges like fast food; and the famous Vegas Strip sometimes smells like a giant four-mile hot box.

room for improvement

Still, the Vegas cannabis industry still has a long way to go in some aspects. Nevada has given the green light to legal cannabis lounges, but bureaucratic hiccups and opposition from the almighty gaming industry continue to slow progress toward giving people a legal place to consume the plant. Just a small tasting lounge on tribal land serves a few dozen customers each week. The other tens of thousands of tourists who buy cannabis still risk being subpoenaed and owed hefty fines if they set themselves on fire in their hotel rooms or in public.

Vegas’ cannabis journey has been anything but smooth. Corruption scandals involving pharmacies, testing labs and state regulators have ravaged an otherwise thriving industry that has raked in some $560 million in taxes and channeled over $250 million of that to public education over the past half decade .

Taking the triumphs and struggles into account, here are our five biggest lessons from Sin City’s roller coaster ride through five years of legal weed.

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1. Staying open 24 hours actually deters crime.

An unmanned pharmacy is a pharmacy asking to be burgled. Believe it or not, thieves tend to head to empty buildings with tens of thousands of dollars in cash. Until Uncle Sam legalizes the plant nationwide and allows more cannabis companies to bank like the rest of the world, dispensaries will continue to be prime targets for crooks — especially when they’re closed.

The Las Vegas Police Department reported that nearly half of the 45 dispensaries in the Las Vegas Valley that sold adult-use cannabis were victims of theft, burglary, or robbery within a year of going on sale for adults. That was back when local ordinances forced almost all cannabis stores to close between 3am and 6am

Las Vegas and Clark County officials were slowly lifting the restrictions. Unsurprisingly, more than a third of pharmacies are now open 24 hours a day and burglaries have since declined.

“Criminals look for the path of least resistance to get cash and other valuables,” said Las Vegas Police Department spokesman Larry Hadfield. “Having people in the pharmacy puts them off.”

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2. Cannabis taxes are a big win for public schools.

The marijuana windfall first hit Vegas schools in 2019, when the state legislature passed legislation to use taxpayer money once reserved for Nevada’s Rainy Day Fund for education instead. Legal cannabis taxes have added a whopping $159 million in the two years since to the approximately $100 million in legal cannabis taxes paid to schools in the early days of adult use. This year’s cut will be similar to last year’s as the latest government figures show comparable fiscal 2022 tax revenues through April.

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3. Multi-state operators dominate in Vegas. But there is still room for independents.

The early days of adult cannabis sales in Las Vegas were dominated almost exclusively by local owners. Then, within a few years, multistate operators — think Curaleaf, Green Thumb, Cresco, Verano, and Ascend — began adopting them.

Out-of-town corporations now own the lion’s share of Sin City’s weed companies. But a handful of locals have stayed at the forefront of their original boutiques.

Among them, Kema Ogden became the first black woman to own a dispensary in Nevada when she opened Top Notch THC as a medicinal cannabis business in 2015. Ogden, a former fitness trainer, introduced Top Notch THC to adult use in 2017 and has continued to run the dispensary ever since. It’s one of the few marijuana stores in the urban east side of Vegas and caters primarily to local residents.

Learn more about Kema Ogden, owner of premium THC

Former Nevada Rep. David Goldwater leads a small group of locals who own and operate Inyo, just a few blocks from where Planet 13’s MSOs and megastore compete for tourists on the Strip. Like Ogden, Goldwater and Company opened in 2015. He estimates that about 80% of his customers are based in Nevada.

4. Fighting the gambling industry is a losing endeavour

The only reason Las Vegas has yet to deliver on Segerblom’s “Amsterdam on Steroids” promise is that the gaming industry has been fighting hard to keep legal weed from encroaching on their territory.

The lucrative casino resorts want to abide by federal laws and don’t want marijuana operators poaching their tourists. While a cannabis consumption lounge makes perfect sense for everyone else, gambling operators see it as a threat to their casino bars, restaurants, concert halls and nightclubs. Tourism and gambling are by far the state’s largest industries, and this influence is reflected in their political donations. Almost every state and local elected official—including Governor Steve Sisolak—is motivated to heed the demands of the industry.

Casino resorts helped stop bills for Nevada cannabis lounges in 2017 and 2019 — the latter even after local officials in Vegas gave the green light for the business to open. A state law was finally passed during last year’s legislature, but regulators have still not issued permits for lounges to open anytime soon.

“You can never count gambling,” said Frank Hawkins, owner of the Nevada Wellness Center pharmacy in Las Vegas, whose consumption lounge has been open for more than three years. “Just when you think everything is on track, they step in to shut it down.”

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5. Rule breakers will break rules; Government regulators need the power to stop them

Among the myriad scandals and serious rule violations over the past five years are the top cannabis regulator’s intrigue with an industry lawyer to fix a contest for nearly half of Nevada’s current dispensary licenses, Eastern Europeans attempting to sell political candidates in exchange for cannabis business permits to bribe and testing labs endlessly increase THC levels to appease their growhouse customers and tax heads misplace tens of millions of dollars in cannabis funds.

Look, it’s Las Vegas. There’s always been a degree of rule breaking and breaking here — and few states have as much experience regulating high-money industries as Nevada.

However, the state’s fledgling cannabis industry has hatched more than its share of creative schemes and legal complications. Over the past five years, we’ve seen the top cannabis regulator conspire with an industry lawyer to fix a competition for nearly half of Nevada’s current dispensary licenses; Eastern Europeans attempting to bribe political candidates in exchange for cannabis shop licenses; testing labs endlessly inflating THC levels to reassure their growhouse customers; and tax people who misplaced tens of millions of dollars in cannabis excise tax revenue.

Federal legalization would certainly prevent much of the corruption and chaos. Until then, states must somehow convince modestly paid regulators and employees that legal gimmicks don’t pay in this expanding lucrative industry.

Chris Kudialis

Chris Kudialis is a Las Vegas-based cannabis reporter. He has written articles for the Los Angeles Times, Las Vegas Sun, Charlotte Observer, Houston Chronicle, Detroit Free Press, and Brazil’s Rio Times, among others.

Check out Chris Kudialis’ articles

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