On the eve of the adult-use cannabis launch back in July 2017, Nevada State Sen. Tick Segerblom promised the world that Las Vegas would become a legal marijuana paradise unlike anything ever seen before. He called it “Amsterdam on Steroids,” an ambitious yet vaguely realistic goal for a city that specializes in around-the-clock accommodations replete with glitz, glamour and extravagance.

“Las Vegas will be the global capital of legal cannabis,” Segerblom declared at an event the night before adult-use sales officially launched. “People will come from everywhere to enjoy our industry.”

Five years later, Sin City is home to the globe’s two largest dispensaries, the biggest and priciest products—including a 1.5-ounce weed cigar that sold for $11,000 and a 24-foot glass bong on display at a local cannabis museum—and countless drive-thrus that let people purchase the plant like fast food. Over a half-dozen Native American tribes across Nevada have opened dispensaries of their own, and cannabis taxes have contributed some $250 million to the state’s public schools.

Yet the road at times has been anything but smooth sailing. And there’s still a final, all-important step to go.

Still Waiting for Lounges

Without cannabis consumption lounges, the millions of tourists that fill hotels on the Vegas Strip and downtown Sin City are still stuck using the plant against the law—even when they buy it legally.

“We’ve been waiting for more than three years to open consumption lounges,” explained Frank Hawkins, a former Las Vegas City Councilman and owner of Nevada Wellness Center dispensary. “But we’ve been stymied every time by the gaming industry.”

Hawkins, who also played in the NFL and won a Super Bowl in 1984 with the Los Angeles Raiders, was on the brink of debuting his 12-room, 7,000-square-foot cannabis entertainment venue on the second floor above his dispensary as far back as 2019. The Las Vegas City Council had given the thumbs-up to open for business, but Nevada Gov. Steve Sisolak and the Nevada Legislature stepped in to ban any legal consumption venues for at least two more years.

Controlled by their megadonors from the gaming industry, Nevada politicians almost always act in the best interests of the casino resorts. Since marijuana remains federally illegal, gaming venues want nothing to do with the plant. But they’re also leery of losing tourism dollars to weed lounges. So while cannabis consumption lounges makes perfect sense to everyone else, gaming sees it as a threat to their casino bars, restaurants, concert venues and nightclubs.

State officials finally passed a new law during last year’s legislature, but regulators still haven’t issued any permits for lounges to open anytime soon.

“And gaming can still shut it down,” Hawkins said. “We’ve seen them do it a couple times in the past already. I’ll believe the lounges are finally here when I can actually open mine.”

Glory and Corruption

Legal marijuana has been a boon to tax revenue that’s exceeded even the most ambitious projections from five years ago. Nevada has raised about $560 million in cannabis taxes during the past half-decade and given over $250 million of that money to its public schools. Tens of thousands of cannabis patients in the state have taken advantage of an easier, more anonymous way to buy their medicine via adult-use instead of through the previous patient registry for medical cardholders—which tracked every purchase and infringed on other rights such as patients’ ability to own a firearm.

Adult-use has created more than 15,000 new jobs and contributed north of $5 billion to the economy, according to official state estimates. But there’s a dark side to the weed windfall.

Countless Vegas scandals during the past five years have plagued the concept of “Amsterdam on Steroids,” at times turning Sin City into a national example of why not to legalize adult use. Just a couple years after adult-use customers purchased Vegas’s first recreational cannabis, Nevada’s lead cannabis regulator sat in a courtroom admitting to a judge that he rigged a contest for 65 dispensary licenses, worth some $20 million each, so that his friends in the industry would win the lion’s share of them.

Just a few months later, a group of Eastern Europeans associated with then-President Donald Trump’s personal attorney tried to bribe Nevada Republican candidates with illegal campaign donations in exchange for a stake in the Vegas’s marijuana industry. The state’s testing labs have been caught dozens of times massively inflating THC levels to appease their grow house clients, and tax heads have misplaced tens of millions of dollars in weed money.

That’s just scratching the surface. While federal legalization would help prevent much of the corruption and chaos, industry leaders say Nevada must do a better job to keep order during the next five years of legal weed.

“We’ve come a long way, but there’s still a lot of places we need to improve,” said Riana Durrett, member of Nevada’s Cannabis Compliance Board and former executive director of the state’s dispensary association.

Hope for the Future

Durrett said the two years since Sisolak launched the Cannabis Compliance Board in 2020 have seen the industry’s integrity improve by “leaps and bounds.” While testing labs are still regularly suspended and shut down for doctoring THC levels, the days of inside deals from foreign campaign donors and corrupt tax officials pocketing kickbacks seem to be in the rearview mirror.

Besides funneling an additional $159 million into public education with money that was originally designated for the state’s Rainy Day account, Sisolak and the CCB have phased the corrupt Department of Taxation completely out of cannabis regulation.

“It’s been night and day,” Durrett said.

Multistate operators have taken over Vegas’s marijuana landscape, which is a similar trend to the landscape of just about every other adult-use city and town across the U.S. But plenty of local mom-and-pop shops still thrive in Sin City.

The compliance board claims it’s going to move forward with consumption lounges, and the first venues may open by 2023. Nevada is also on pace to replicate last year’s record year $1 billion in cannabis sales, which produced a whopping $157 million in marijuana taxes.

Segerblom, now a Clark County Commissioner, says Amsterdam on Steroids has taken much longer than he originally hoped for. But its potential is still alive and well. Once gaming steps aside and lounges are finally given the green light, his promise from five years ago will finally come true.

 

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