Nevada’s Experiment With MMJ ‘Reciprocity’ Could Pay Big Dividends, Create Huge Market

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By John Schroyer

In a few months, Nevada will set a new bar for the medical marijuana industry with a provision in the law state legislators passed last year allowing dispensaries to set up shop.

The provision allows any legally registered MMJ patient from anywhere in the world to purchase marijuana in any of those dispensaries.

It’s called “reciprocity,” and only a few other states in the country have it, but to varying degrees. Maine, for example, allows for reciprocity, but requires confirmation from a doctor. And in Rhode Island, it’s legal for out-of-state MMJ patients to possess up to two and a half ounces, but they’re not allowed to purchase marijuana at dispensaries. But Nevada is something of a test case, because their dispensaries will likely target out-of-state MMJ patients as a market.

, Nevada’s Experiment With MMJ ‘Reciprocity’ Could Pay Big Dividends, Create Huge Market

“You show us your card, you show us your ID, you sign an affidavit, and you can participate in our program,” said state Sen. Richard “Tick” Segerblom, D-Las Vegas, one of the prime sponsors of the measure to establish MMJ dispensaries in the state (Senate Bill 374).

International Market

Though MMJ was first approved in Nevada in 2000, the only way patients could obtain it is by growing it themselves. Dispensaries remained illegal until Senate Bill 374 was signed into law in June of 2013, and it took until this year for the state to finalize regulations.

Many of the finer points of reciprocity still have yet to be worked out by the Nevada Department of Health and Human Services, such as the exact wording of the affidavit. The state also will issue up to 66 dispensary licenses, which must obtain approval from local jurisdictions as well.

Segerblom said he’s hoping that the first dispensaries will open sometime in January, but a central point for him is that there’s no good argument against a policy such as reciprocity.

“We knew that a lot of people coming here have cards back in their home state, and we’re a tourism state. We get 40 million visitors a year, so we felt that there’s no reason not to allow people that have cards in other states to come here and partake in our program,” Segerblom said.

After dispensaries open, even patients from other countries that have MMJ programs – such as Canada – will be able to buy their medicine in Nevada.

Patients in Nevada – including qualifying tourists – are allowed to possess up to two and a half ounces within a two-week period.

Avis Bulbulyan, a California-based cannabis industry consultant, said the openness of the market combined with the state’s tourism industry could equal immense sales numbers.

“They (dispensaries) are going to be targeting anyone and everyone they can get,” Bulbulyan said. “It’s going to be fairly huge. I wouldn’t be surprised if it accounts for 30-40% of sales for a given dispensary.”

Depending on how it all shakes out, the Nevada medical cannabis market could be in the tens of millions or stretch above $100 million if it becomes an MMJ tourism hub, according to estimates from Marijuana Business Daily.

And given that Nevada isn’t requiring its MMJ industry to all be locally owned, that could change marketing strategies for whichever firms wind up getting dispensary licenses, Bulbulyan suggested.

“If they’re able to control production and products, as well as dispensing it, and knowing that their audience is coming from out of state, they’re going to pay a little more attention to that national market and try to get their brand out there,” Bulbulyan said. “But at the same time, you can’t really do a national marketing campaign, because how often is the average person going to Vegas on vacation?”

Bulbulyan surmised that most of the medical cannabis tourist business Nevada captures will be from those who fly to Las Vegas or Reno – rather than from California patients who want a change of scenery. He chalked that up to two simple reasons: price and convenience.

“In California, the average eighth is about $35-$40. In Nevada, it’s going to be more expensive, like $65-$70 an eighth,” Bulbulyan said. “Most of the people who are going to fly in, they’re not going to risk flying with any kind of product on them, so it’ll be easier to just bring a (doctor’s) recommendation.”

California patients, Bulbulyan predicted, will more likely just drive and bring their medicine with them.

The problem with that, however, is that patients don’t necessarily have any legal protection until they sign an affidavit from a MMJ dispensary, said Chris Lindsey, a legislative analyst with the Marijuana Policy Project. And until a final draft of the affidavit is produced by the state, other legal questions still swirl around the issue.

“The law is in effect, but it doesn’t look like the department has jumped through all the hoops yet,” Lindsey said.

Model for Other States?

The concept of reciprocity is long overdue, said Leslie Bocskor, the founding chairman of the Nevada Cannabis Industry Association.

“Reciprocity, which seems like an abnormality, really should be the norm,” Bocskor said. “It will become a trend (in other MMJ states) if reason wins out and good sense wins out, because if a state believes that marijuana is medicine… it doesn’t stand to reason that they would say, ‘Well, this is medicine, but we’re not going to allow anyone who’s traveling to our good state to get their medicine while they’re in our state.’ It’s ridiculous on its face.”

Not just that, but there’s potentially millions in tax revenue for states to consider.

“There’s too much money on the table not to do it,” Bulbulyan asserted. “I think a lot of states are going to follow suit.”

Florida might be a logical next state to institute reciprocity, Bulbulyan suggested, if the Sunshine State’s medical marijuana ballot measure passes this November. Like Nevada, Florida also relies heavily on tourism, he pointed out.

“If you’re going to go through with a medical marijuana program, you might as well take advantage of all the different angles,” Bulbulyan said.

Though its reciprocity law might make Nevada something of a pioneer in the MMJ industry, Segerblom won’t be satisfied until his state joins Colorado and Washington in legalizing recreational adult use. Medical marijuana, Segerblom said, is a steppingstone to full legalization.

“The reality is that recreational use is what we’re going for,” Segerblom said. “Because that really will, with 40 million tourists, it’s going to blow up right away. That’s going to be our savior.”

John Schroyer can be reached