The race to launch the first licensed dispensaries in Nevada is heating up, and some business owners are turning to home growers to stock their shelves and open their doors.
Since no cultivation facilities are up and running yet, a handful of companies with dispensary licenses are looking to purchase cannabis from registered patients or their designated caregivers, which is allowed under a provision of the state’s MMJ law.
This strategy could help the first dispensaries open in a matter of weeks.
Almost 9,000 Nevadans hold valid medical marijuana cards, with the vast majority – 6,500 – residing in Clark County, where Las Vegas is located.
Some 55 dispensaries received provisional licenses in November, and more could be awarded in the next year if a bill expanding the number of permits is passed. Many are planning to open this fall or in early 2016, after cultivation sites harvest their first crop.
But those that open sooner will likely catch the attention of the thousands of patients who are required to register with a singular dispensary for 30 days at a time. The first dispensaries also will be able to starting building name recognition, recouping their startup costs and capturing loyal customers ahead of their competitors that open later.
So far only three cultivators have received anything beyond preliminary licenses, and none have yet produced a crop. When medical marijuana from licensed cultivation operations will actually be available is still unknown, making home growers the only source of legal marijuana for dispensaries in the state.
“It’s going to be four or five months before any crops come to fruition, so the only option right now is to buy from existing cardholders,” Jim Ferrence, the marketing and government affairs director at Las Vegas dispensary Euphoria Wellness, told Marijuana Business Daily.
Following the provision in the state law, Euphoria will purchase its flower from home cultivators, who are allowed to produce up to 12 marijuana plants, as a stopgap between the time it opens its Las Vegas dispensary until mass cultivators are up and running, he said.
The company plans to open its doors “in a few weeks” after several regulatory delays, Ferrence said. Euphoria executives plan to meet with local and state officials to iron out the few remaining wrinkles, he said.
Not everybody thinks purchasing from home growers is a good idea, though.
The provision was originally designed to allow caregivers and patients growing their own cannabis to provide licensed cultivation sites with plants that could be cloned to build the state’s industry, said Amanda Connor, an attorney with Connor & Connor PLLC in Las Vegas. (Home growers will not be allowed to continue cultivating if a dispensary opens in their county.)
“They never envisioned it to supply dispensaries,” she said. “You can’t bring product across state lines so the question was, ‘how will (cultivation sites) get product legally, how will they legally get clones and mother plants to start the industry?'”
Some insiders have told their members to wait until large cultivators come online and are available to deliver. Joe Brezny, the head of the Nevada Cannabis Industry Association, said he’s advising companies seeking his guidance to sit back and relax and let the industry develop before considering opening their doors.
“I’ve advised my association members to not rush, to do this the right way, to cultivate their own marijuana to as high a standard as possible and test it and have that determine when they come to market,” he said.
For his part, Demetri Kouretas – the chief executive officer of The Grove, which will have dispensaries in Las Vegas and Pahrump, Nevada – said he’s going to wait for the first growers to produce a crop for financial reasons and to better know which products he’s selling to his customers, though he said he’s ready to open his doors.
“We’re not going to be buying from patients because it doesn’t seem financially the way to go,” he said. “We could open next month if we had product to sell but we’re shooting for fall in both locations. Of course, that depends on if we can get product that’s up to our standards.”
Tony C. Dreibus can be reached at [email protected]