By Amanda N. Connor
In June 2013, the governor of Nevada signed into law a bill allowing for licensed medical marijuana facilities in the state.
Scores of entrepreneurs from both Nevada and existing MMJ markets rushed to get involved, establishing partnerships, writing up business plans and applying for licenses. Yet here we are in 2015, and not one licensed medical cannabis business has opened.
So when will Sin City and the Silver State see their first cultivation facilities and dispensaries? You might have better odds of picking the right number in a spin of the roulette wheel than answering that question, as several aspects of the program are still up in the air.
Here’s an overview of the process and timeline so you can get a better sense of how – and when – the industry will emerge:
Where We’re at Now
Nevada recognizes four distinct facilities – cultivation sites, production plants, labs and dispensaries – and each requires a separate license. Nevada accepted applications for medical marijuana facilities in August 2014 and issued provisional certificates to qualifying applicants in November.
A provisional certificate does not give the facility the license to open its doors. Rather, it means that the applicant met the merit criteria and ranked high enough to continue in the licensing process.
Applicants who were not granted a provisional certificate will have to apply next year for any available licenses. Those who were granted a provisional certificate still have many steps to complete before they will be granted a local business license to operate.
A group holding a provisional certificate will have to work with both the state and local governments to complete the licensing process.
At the local government level, the applicant will have to ensure that all zoning and business licensing processes are complete. This could include approval for tenant improvements, construction or offsite improvements. Also, the location will have to pass various inspections, including those tied to fire, safety and water.
The end goal for businesses at this level is to obtain a certificate of occupancy and then a local license to operate a medical marijuana establishment.
Nevada also requires applicants to complete several key tasks before a state registration certificate (license) is issued.
The applicant is expected to work with the health department throughout the build-out process, and state officials will also inspect the facility.
Also, groups must obtain agent registration cards for all owners, officers, board members, employees and volunteers. Furthermore, they have to obtain an inventory control and tacking system, have it installed and get the state’s seal of approval. Same with a security system, which must meet stringent requirements.
Also, the company’s logo and proposed advertising must be submitted for approval. Only after these, and potentially other, items are completed will a registration certificate be issued to the applicant.
So how long will it take for this process to play out? Some people initially predicted that dispensaries would be open by January 2015. That’s not going to happen. Realistically, the earliest the first dispensaries will crop up is late spring.
But even that might be optimistic, as many roadblocks could delay the process.
Lawsuits might present the biggest challenge. The application process was intensive and costly. As a result, many groups that did not receive a provisional certificate have filed suit, claiming that errors occurred during the application review and ranking process.
We’ve seen this play out in other states such as Arizona and Massachusetts, and in some of these markets legal battles held up the licensing process for a significant amount of time.
Also, the build-out and grow times of cultivation facilities factor heavily into the timeline, as a dispensary can only sell products that were grown and manufactured in state-licensed facilities. So it will still take several months for supply to hit the market after the first cultivation sites start planting.
Finally, labs will have to be operating and have their testing procedures approved by the state before any sales can occur.
Given these uncertainties, there’s no way to give a definitive answer as to when the industry will emerge. However, my best guess would be that a Nevada patient will be able to legally purchase medicine in late 2015.
Amanda N. Connor is an attorney in Nevada who provides advice and legal representation to the cannabis industry.