Vegas Weed advocates relaxing distance buffers for cannabis companies

Cannabis advocates and business owners in Las Vegas are urging city leaders to relax distance requirements between cannabis businesses, saying the move would encourage the development of a cannabis district similar to Amsterdam’s. At a Las Vegas City Council meeting on Wednesday, entrepreneurs also called for a reduction in cannabis business license fees, arguing that the high cost is an unreasonable “barrier” to starting a new business.

The City Council was considering a proposed regulation to regulate cannabis consumption lounges, which are businesses offering cannabis for purchase and consumption on premises. In September, the council paved the way for the opening of cannabis lounges in Las Vegas by a 5-1 vote against a motion that would have prevented stores from opening in the city.

At Wednesday’s meeting, several cannabis industry advocates and business leaders addressed the council, telling members that regulations requiring licensed cannabis businesses to be at least 1,000 feet from each other are making it difficult for entrepreneurs to secure compliant property.

“It’s absolutely unreasonable to get someone to walk more than three football fields to the nearest bar, restaurant, shop or casino,” Tina Ulman, president and founder of the Chamber of Cannabis, said at the city council meeting on Tuesday Wednesday. “Why would we ever want them to do that for consumption sites?”

Five licensed cannabis dispensaries in Las Vegas have plans to open cannabis consumption lounges as part of their business. Another 10 companies are expected to operate consumption lounges independently of a dispensary, including seven social justice applicants negatively impacted by marijuana prohibition before cannabis was legalized in Nevada in 2016.

The proposed regulation allows the city to waive the distance requirement between consumption lounges, but not in some parts of the city, including the Symphony Park District, the Las Vegas Medical District or the Casino Resort District.

Dani Baranowski, vice president of industry group Chamber of Cannabis, said the distancing requirement will force applicants to “find expensive, remote and unprofitable locations where it will be difficult to do business.”

Business leaders told the city council that the downtown arts district could become a “new Amsterdam” if social distancing rules are scrapped or relaxed, and could serve as a destination for cannabis tourism that could attract visitors from around the world. They also found that being able to locate consumption lounges and other cannabis businesses closer together would encourage walking and eliminate the temptation to drive during the high, benefiting public safety.

“The proposed measures have resulted in unnecessary and harmful distance restrictions between lounges and high license fees compared to other businesses,” said Chandler Cooks, who received a provisional Social Justice lounge license.

Business leaders call for lower license fees in Las Vegas

Other business owners agreed with Cooks and called for a reduction in licensing fees for cannabis consumption lounges. The proposed regulation requires a one-time business license fee of $10,000, with Social Justice applicants paying a reduced fee of $2,500. The lounges are also required to pay semi-annual royalties based on their revenue.

“Adding those hefty fees will only add to the insane amount of capital they have to raise” to start their businesses, Ulman said.

Baranowski said the high licensing fees pose “further obstacles” to success and could deter applicants who are struggling to raise the capital needed to start their business. Paul Murad, president of Metroplex Group, a real estate company that owns businesses in the Arts District, said he looks forward to working with the city council on a range of issues relevant to cannabis companies, including reducing the cost of business licenses.

“We are demanding that royalties and ongoing royalties be significantly reduced,” Murad said. “So they’re on par with other companies… They have to be on the same level, not over the top just because they happen to be cannabis.”

After hearing business leaders, the city council postponed a vote on the proposed cannabis consumption lounge ordinance and moved the agenda item to its March 1 meeting. Business leaders said they hoped to use the next two weeks to work with the city council to draft an ordinance that Murad said could establish Las Vegas as “a role model for other communities.”