Nevada eases marijuana consumption lounge rules, issues first licenses

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Image of the Las Vegas skyline with mountains in the background

Nevada regulators this week approved loosening air-ventilation standards for marijuana consumption lounges in Las Vegas and other parts of the state while granting the first three conditional licenses for such venues.

The Nevada Cannabis Compliance Board’s (CCB) actions provide more clarity for operators to move forward with construction and design plans – and could make it cheaper and easier for lounges to open their doors in one of the nation’s largest tourist markets.

Chris Anderson, president of Sala Consulting, told regulators during a meeting Tuesday that the changes significantly lower the barrier to entry for consumption lounge operators while “drastically reducing the upfront investment and ongoing operational energy costs of running these ventilation systems.”

Sala, a Las Vegas-based government relations and public affairs firm, represents Planet 13, one of three Nevada companies that received conditional license approvals for marijuana consumption lounges.

The other two are:

  • Common Sense Botanicals Nevada, operating as The Venue at Sol Cannabis in Washoe Valley between Reno and Carson City, in the foothills below Lake Tahoe.
  • Cheyenne Medical in unincorporated Clark County.

Despite the issuance of the conditional permits, the widespread launch of dozens of consumption lounges still appears months away.

The U.S. marijuana industry has closely followed developments in Nevada as consumption lounges represent the next iteration of retail and events, helping fuel nationwide attention given Las Vegas’ reputation as a tourist mecca.

Nearly 40 million people visited the city last year.

Some lounge operators had hoped to open their doors this summer, but timelines were derailed amid administrative setbacks, funding concerns and changing regulations.

Loosening air standards

The CCB on Tuesday unanimously approved reducing the number of complete air changes per hour in smoking rooms from 30 to 20.

That’s in line with other similar venues such as hookah bars, cigar lounges and taverns.

The CCB also lowered air revolutions in nonsmoking areas of cannabis consumption lounges to six times per hour from 20.

Leading up to the meeting, industry executives had raised concerns about the state’s consumption-lounge regulations, particularly those covering indoor air quality and the related, astronomic costs of installing and maintaining air-ventilation systems.

“The industry suggested changes to air-exchange requirements that will enable these new small businesses to operate safely while reducing overburdensome requirements that would cost hundreds of thousands of dollars,” said Scot Rutledge, partner at Argentum Partners, a government affairs and marketing firm based in Reno.

Those expenditures would render consumption areas economically unfeasible for most operators and a near impossibility for social equity licensees, according to cannabis insiders.

Regulators also approved the use of a smoke-elimination device, dubbed Billow, that’s designed to allow users to consume marijuana through a small, closed-loop filtration system.

“We are thrilled that the CCB approved language today that allows for innovative technology to be used in consumption lounges as an alternative to expensive HVAC systems, especially where we can protect employees and allow equity businesses to thrive,” Billow’s inventor, Shanel Lindsay, told MJBizDaily after this week’s vote.

Lounges still a ways from opening

The CCB’s approval of the three conditional licenses is among the last steps required to open a consumption lounge.

But it appears operators are still far from launch.

When pressed to lay out Planet 13’s vision, a company representative told regulators that plans remain in the concept phase.

When Nevada regulators approved consumption lounges a year ago, they agreed to issue up to 65 licenses.

Of those, around 40-45 licenses would be attached to existing cannabis shops.

Another 20 were expected to go to independent lounges – including 10 for social equity applicants, or those with a nonviolent marijuana conviction and who live in a designated disadvantaged area.

The board this week also signaled it might adopt further changes regarding air-quality standards at consumption lounges at its July meeting, but those changes are not expected to be major.

The CCB next month might also approve other conditional consumption licenses.

Chris Casacchia can be reached at chris.casacchia@mjbizdaily.com.