To diversify Nevada’s economy, lawmakers push for study on developing hemp industry

A man in a plaid shirt and blue baseball cap standing in a field of hemp

Nevada lawmakers focused on the ever-present task of diversifying the state’s economy are considering a novel way to help jumpstart Nevada's economy — conducting an interim study on the state’s hemp industry. 

For 70 years, hemp cultivation was illegal in the United States until the passage of the Agricultural Improvement Act of 2018, Sen. Roberta Lange (D-Las Vegas) said during a presentation on the study proposed as part of SCR4 to the Senate Committee on Legislative Operations and Elections on Thursday. 

Despite the ban, the U.S. remained one of the largest importers of the plant, and a previous iteration of the Farm Bill allowed states such as Nevada to start their own limited pilot program of legal hemp growth.

But approval of the 2018 federal legislation didn’t solve all of the budding hemp industry’s problems overnight. Lange said by launching the study, Nevada can develop a market that can increase jobs and boost the state's economy.

"This is something that is made for Nevada, something that we can use to diversify our economy to put more people back to work," Lange said. "We have lots of land; we have lots of vacant buildings, buildings that we can put indoor grow houses."

The study proposes examining the available funding sources for research on the plant and reviewing current trends in the hemp industry along with researching innovative methods and legislation to spur industry growth. It would also focus on programs designed to promote economic development in coordination with hemp cultivation businesses and the production and sale of hemp products.

Hemp is best known for CBD production, but CBD is just one byproduct of the plant. Hemp seeds can serve as a source of food, and the plant's stalk can be used in various textiles, biofuel and construction materials.

State lawmakers approved creation of a hemp pilot program in 2015, and the industry has since blossomed; growing from 13 registered growers in 2016 to 116 in 2018, along with corresponding increases in outdoor and indoor growth spaces registered with the state.

Former legislator and Clark County Commissioner Tick Segerblom, who sponsored the hemp pilot program bill in 2015, testified in support of the bill, noting that he can walk faster by using CBD oil in the morning and that hemp would benefit Clark County's agricultural community.

"We're intending to ... bring hemp into Clark County to let people study it, grow it in some of the neighborhood gardens that the university participates in and it's just a win-win," Segerblom said. "It's an incredibly valuable product."

Segerblom, who has a strain of cannabis named after him and led the crusade to legalize pot in the state, said that his only regret about the bill hearing was that he was not at the Legislature on April 20.

"I'd say the saddest day of my life was not being there on Tuesday for 4/20," Segerblom said. "I really did miss it."

Lawmakers look to allow cannabis consumption lounges for economic growth, diversifying marijuana industry

Nevada lawmakers hope this session will be the one where they resolve a “vexing” problem that has lingered since 2017 — it’s legal to consume marijuana recreationally, but not in a public place.

AB341, presented Friday in the Assembly Judiciary Committee, would authorize the creation of cannabis consumption lounges. The businesses would function like bars for marijuana use, allowing people to legally consume outside of a private home.

“More than 40 million tourists visit Las Vegas every year,” said bill sponsor Assemblyman Steve Yeager (D-Las Vegas). “Many of those are interested in trying cannabis, but there's nowhere they can legally do so. They can't bring it into their hotel rooms. They can't consume outside. As a result, many of them end up breaking the law.”

Lounges would be restricted to people 21 and over, and public consumption would still need to be out of sight of passersby. Customers might bring their own products in, or the venue can sell “ready-to-consume” products, although not in quantities that would make it a de facto retail cannabis dispensary.

Proponents have big dreams that the bill could unleash a new wave of tourism, as well as fine dining experiences featuring cannabis-infused food and drink. They described concert and comedy venues where cannabis was allowed, and one public commenter proposed a mind-body wellness center akin to a yoga studio where people could use cannabis as they work through trauma.

“We are confident that a diverse group of operators will have the creative vision to build lounges that are experiential and fun,” said Nicole Buffong, the western regional director of Minorities for Medical Marijuana.

Supporters see lounges as a key tool in diversifying an industry with ownership and board membership that skews heavily male and white, in part because of high financial barriers to entry. The bill includes a preference for “social equity” applicants, defined as those who have been “adversely affected by previous laws and criminalized activity relating to cannabis.”

“As a minority woman and a disabled veteran, even with the financial freedom to start my own business, I could not afford and did not have the political connections to get a license in the early rounds of licensing in Nevada,” said Christina Thomas, director of veterans voices in the Chamber of Cannabis, a Las Vegas nonprofit dedicated to a more inclusive cannabis industry. “We must find better ways to be more inclusive to veterans, disabled members of the community, BIPOC [Black, indigenous and people of color] communities, and those disenfranchised by the War on Drugs.”

But some lawmakers raised questions about whether the bill provides a viable pathway to the leadership classes of the industry, or leads entrants into a financial dead end. The bill envisions two types of licenses: one for a retail consumption lounge that is adjacent to a dispensary, and one for a standalone, independent lounge that may or may not sell products on site.

“We all know that there's a cost associated with the inventory controls, et cetera, that go along with selling cannabis — the [point of sale] that goes along with that, security measures,” said Scot Rutledge, a lobbyist representing the Chamber of Cannabis. “And so there was flexibility for somebody who was entering into this, wanting to open up an independent cannabis lounge, but may not want to start with selling cannabis.”

Proponents described scenarios where lounge owners would set up venues so attractive that they would earn a national reputation and gain the wherewithal to afford a dispensary license. Skeptics wondered aloud whether that would leave minority entrepreneurs opening up bring-your-own-cannabis establishments and making little, if any, money.

“Your model for no sales or ‘bring in’ does not appear to be an intentional model,” said Assemblywoman Shondra Summers-Armstrong (D-Las Vegas). “It seems aspirational and, to me, destined to fail.”

Some lawmakers raised concerns about how to prevent visitors to a cannabis lounge from leaving the premises and then driving home impaired. Marijuana and its psychoactive ingredient THC works through the body differently than alcohol, producing a delayed high and eluding clear-cut measurements of impairment such as blood alcohol content. 

“Somebody could get 100 milligrams and feel completely fine, while another person can have 10 milligrams and be completely floored,” said Chris Sayegh, a Los Angeles-based chef focused on cannabis-infused fine dining. 

Bill proponents say the issue can be addressed through training staff to recognize impairment in consumers, or for arrangements such as partnerships with ridesharing services to ensure customers are more likely to hand over the keys if they are not fit to drive. Ultimately, though, it’s up to consumers to be responsible.

“Everybody has free will, and of course if they want to go to a bar and have a few beverages, it is within their right to already do that,” Sayegh said. “The only time that the staff is liable that they see that somebody is completely inebriated, and they don't do anything to prevent it.”

The chances of success for the business model remain uncertain. Presenters acknowledged that some states that have tried the concept have imposed so many restrictions on lounges — including on food and beverage inside — that the end product has been unappealing to customers. 

They say that shouldn’t deter Nevada from trying it.

“I think the concerns about what has happened in other states are legitimate concerns,” said John Hudak, who works for the Brookings Institution but co-presented in his personal capacity. “But I think the tourism model in particular in the state of Nevada adds to what is an existing resident demand for these types of establishments in the state.” 

The bill is still a work in progress, with one and maybe more amendments potentially on the way. But Yeager hopes this will be the year to take the leap.  When the concept was floated in the 2019 session, lawmakers pumped the brakes with a clear ban on the lounges to allow more time to consider the idea.

“The bottom line is we simply cannot wait another two years to get this right,” Yeager said. “The time is now.”

Tensions over 2018 marijuana licensing resurface with bill that would give losing companies chance to expand

A table of packaged marijuana for sale

An acrimonious battle over the distribution of coveted marijuana dispensary licenses in 2018 spilled over into the Legislature on Thursday, with sharp opposition to a measure that would allow applicants who lost out on the licenses another chance to open new stores.

SB235, sponsored by Sen. Dallas Harris (D-Las Vegas), includes a provision giving “social equity” applicants who have been adversely affected by the War on Drugs a leg up when applying for a Nevada marijuana license. The bill’s most controversial element by far would create a new path for additional dispensaries in the dog-eat-dog cannabis market.

“First, it will allow better access for patients to obtain their medicine. Second, it will address the major flaws in the last licensing process. Third, it will give local Nevada cannabis businesses the opportunity to help Nevada get back on its feet,” said supporter John Ritter, who is affiliated with the marijuana company The Grove and has long been fighting the licensing procedures from 2018.

Unlike most other business types, retail cannabis stores are capped in number by government. A 2018 round of licensing doled out 61 dispensary licenses to 17 different companies even though 127 businesses applied. That drew almost immediate backlash from those who didn’t win; they argued the state’s process was riddled with problems. 

After lengthy and complex litigation, Judge Elizabeth Gonzalez concluded last year that certain actions by the Nevada Department of Taxation, the state agency that issued the licenses, created “an uneven playing field because of the unequal information available to potential applicants.” But she said neither monetary relief nor new licenses should be doled out as a result.

A proposed amendment to SB235 allows applicants unsuccessful in 2018 a route to finally getting permission to expand by allowing those dispensaries, if they have both retail and medical licenses, to spin off the medical marijuana license into a completely new license and double their number of stores. 

Cannabis Compliance Board Executive Director Tyler Klimas said the bill could potentially yield new dispensaries for the 110 businesses that didn’t get a license in 2018. But attorney Mark Fiorentino, representing the Grove, a company that missed out on licenses in 2018, said the number of new dispensaries that might result from the bill was probably closer to 20 because of requirements such as dispensaries having local approvals. 

There are currently 81 dispensaries open statewide, and another 50 are expected to open by a February 2022 deadline.

Proponents commissioned an analysis from RGC Economics that projected the state could support up to 1,283 additional dispensaries. Nevada’s marijuana market grossed nearly $700 million last fiscal year and is on track to break that record this fiscal year.

But opponents cited another study from a different Nevada-based analyst, Jeremy Aguero of Applied Analysis, that concluded adding more licensees would dilute revenue for existing stores. They also say it would go against a settlement with the Cannabis Compliance Board that called for a study on whether new licenses are needed to serve Nevada.

They say licenses should be doled out in a competitive, merit-based process, arguing that inferior applicants are looking for a back door to get a license, and that bill proponents should go through proper channels when a future application window opens up.

“SB235 is clearly an end run around Judge Gonzalez’s decision in an attempt to award licenses to those that were unsuccessful, both in 2018 in obtaining licenses as well as unsuccessful in the litigation,” said attorney Rusty Graf, who represented Clear River LLC, which won three licenses in 2018.

The hearing, in the Senate Revenue and Economic Development Committee, also exposed an internecine conflict that has riven the industry. Nevada Dispensary Association (NDA) Executive Director Layke Martin indicated that an unnamed board member went behind the backs of association leaders, neglecting to give them a heads up about the provisions of the bill before it was introduced.

“There’s a reason for that,” she said, pointing to a portion of the amendment that creates a new pathway for unsuccessful applicants to expand. “The award of licenses as set forth in section 2 of the amendment threatens the strength and integrity of the industry at large, and it's not something that the NDA would ever support.”

Bill co-presenter David Goldwater, a board member of the dispensary association, said the five-member board is stacked against smaller operators who didn’t win a license in 2018, such as his business, Inyo Fine Cannabis Dispensary. 

“This is a unique situation where the association took a position on a bill that the members had a differing of opinion,” he said. “I look forward to working with the sponsor on seeing if we can improve this bill.”

Bill would overhaul marijuana DUI law, considered ‘unscientific’ predictor of whether driver is impaired

Legislators are looking to update Nevada laws that could lead to people being convicted of driving under the influence of marijuana even if they were stopped by police long after they last consumed.

Assemblyman Steve Yeager (D-Las Vegas) on Monday presented AB400, which would remove from the law specific “per se” limits for cannabis metabolites that can be in a person’s blood to trigger a DUI. Proponents of the bill say such thresholds are a poor reflection of how impaired a person is because of how cannabis is metabolized by the body differently than alcohol, and argue they were set at a time when no amount of marijuana was acceptable.

“These limits have nothing to do with either science accurately determining impairment or promoting public safety,” Paul Armentano, the deputy director of marijuana legalization advocacy group NORML, told members of the Assembly Judiciary Committee. “These arbitrary limits were enacted at a time when Nevada imposed blanket prohibition on the possession and use of cannabis for any purpose. This is not the case any longer. Hasn't been for some time.”

While alcohol can be completely eliminated from the body in a matter of hours, THC — the psychoactive ingredient in marijuana — remains detectable for days after a person last consumes, even if the person is no longer high.

Armentano, who was co-presenter with Yeager, said he believes the thresholds came about because they were the “lowest levels of quantification” at the time the law was enacted — in other words, the smallest amount of THC that technology at the time could detect with precision that would be acceptable by a court. He compared the levels to a blood alcohol content of 0.01 percent, which would be detectable in a blood test but well below the legal driving limit.

But the bill faced significant opposition from police, prosecutors and employers worried about the implications for workman’s compensation insurance, who said it would make it more difficult to hold people accountable for being under the influence of marijuana.

Las Vegas Police Detective Dwaine McCuistion, who investigates fatal traffic accidents, gave the example of a woman who drove her Camaro 100 miles per hour into a school zone, striking a car and killing the children inside. When she was taken to the hospital and her blood was drawn, the test showed cannabis in her system.

“If we were to remove the per se that we have right now, there would be no way for me to prosecute this case. What would I tell the family members at that point?” he said. “I'm sorry I can't prosecute the person who killed your family members. I'm sorry that Nevada law prevents me from bringing you justice.”

John Jones of the Nevada District Attorneys Association said that in serious crashes, police often don’t have a chance to conduct a field sobriety test or observe the driver’s behavior because they have been disoriented or are being rushed to the hospital.

“This bill as currently written would really hinder our DUI marijuana prosecutions,” Jones said. “We don't have the ability to make all the physical observations and perform all the physical tests to prove a DUI beyond a reasonable doubt in the absence of blood results.”

Yeager countered that in the Camaro example, the driver could be prosecuted for other crimes during the incident, such as excessive speed. And he said that toxicology results could still be used in a case, although they could not be the sole piece of evidence on which someone is convicted of DUI.

Opponents also raised concerns about how removing the per se limits from law might make it difficult for an employer to prove that a worker was impaired by marijuana when an accident happened on the job. That means the employer could be on the hook in a worker’s compensation claim even if the worker was at fault for consuming cannabis.

“Many of these workers are operating heavy machinery and conducting hazardous jobs and endanger the safety [of their coworkers] by being under the influence,” said Shaun Meng of the Nevada Self Insurers Association.

Yeager said that he was open to working on the portion of the bill that dealt with workman’s compensation. That portion is connected with the DUI statute in Nevada law, something Yeager said was likely an effort to ensure laws on impairment were consistent with the latest science.

Another criticism came from trucking interests, who say that taking the thresholds out of law could put Nevada out of compliance with regulations that prohibit commercial truckers from using marijuana. If Nevada cannot revoke a commercial driver’s license if someone is found to have used marijuana — which is still considered a Schedule 1 controlled substance at the federal level — the state might lose federal grant money, several people testified. 

Lt. Don Plowman, manager of the Nevada Highway Patrol’s Motor Carrier Safety Assistance Program, suggested the bill exclude commercial drivers, who are held to a higher standard than regular drivers because their vehicles are generally larger and more potentially lethal. 

Armentano said he didn’t understand the concern because most states do not have per se limits in their law for marijuana DUIs and do not seem to have problems issuing commercial driver’s licenses.

Yeager, who chaired an interim committee studying marijuana DUIs that did not finish its work because of the pandemic, pointed out that even Clark County District Attorney Steve Wolfson has publicly acknowledged Nevada law is murky around marijuana intoxication and needs to be reviewed. Wolfson’s employee, Jones, testified against the bill and wanted the interim committee to do more work before changing the law.

“Impaired driving will continue to remain illegal in our state, doesn't matter what the substance is,” Yeager said. “My main concern with this bill is to make sure that drivers aren't being unfairly convicted of impaired driving when they're not actually impaired.”

The hearing was the first major step for the bill. The committee did not vote on the measure.

New data shows cannabis executives are mostly white and mostly male, cannabis board will look to improve industry diversity

Group of pedestrians outside Essence Cannabis Dispensary

Marijuana business owners and board members in Nevada are disproportionately white and male, while the industry workforce is made up of a greater proportion of people of color, according to a new demographic report on the state’s cannabis industry.

Tyler Klimas, executive director of the Cannabis Compliance board, said there is an issue with the lack of diversity in the industry and that the report could potentially help with creating new license types aimed at social equity, including licenses for social consumption lounges, which will be discussed during the legislative session.

“If something like that moves forward, then that right there is an opportunity to to bring some new people into the industry and focus on diversity if we're going to issue new license types,” said Klimas.

Klimas also said that the first subcommittee of the Cannabis Advisory Commission he will appoint will be one focused on social equity, diversity and inclusion. He added that that committee will draw from best practices from other states and work to figure out what steps will help increase diversity in the industry.

The report, released by the board at the end of January and required by AB533 from the 2019 session, found that 73 percent of license owners, managers and board members identified as male, while 65 percent of that group identified as white. The Census Bureau estimates that 48 percent of Nevadans are White alone, not Hispanic or Latino, and that 29 percent of Nevadans are of Hispanic or Latino origin, whereas only 16 percent of owners, managers and board members identified as being of Hispanic, Latino, or Spanish origin.

“What was sort of striking was the lack of diversity in some of the leadership levels,” Layke Martin, executive director of the Nevada Dispensary Association, said in an interview. “And it shows that we have a lot of work to do there, looking at the executive board, and the board of directors.”

Martin noted that the racial disparities were more pronounced among board members than among owners. The report found that 63 percent of owners identified as white compared to more than 75 percent of board members.

The report also found that industry employees, not including executives, comprised a more diverse population, as 40 percent of employees identified as female, and 26 percent of employees identified as being of Hispanic, Latino, or Spanish origin.

The statistical results came from a survey sent to all 9,890 active agent registration card holders in the state, a group that includes employees, contractors, volunteers, owners, officers and board members of a cannabis business, including any cultivation and production facilities, testing laboratories and dispensaries. The board received responses from approximately 56 percent of the industry and nearly 100 percent of industry executives.

Klimas said one reason for the lack of diversity is the high bar to enter the industry, including the capital needed to start a cannabis establishment. An application fee for a license is $5,000, while the actual licensing fee can be as high as $30,000, depending on the facility type.

Those fees have resulted in fewer cannabis licenses for the communities of color, “who were disproportionately targeted or affected by... decades of drug policy, like the war on drugs,” Klimas said.

Sen. Dallas Harris (D-Las Vegas), who sponsored a bill last session that called for a diversity study, called the report a first step towards making change in the industry.

“The CCB has the tools, I think, that it needs to move the industry,” Harris said on Tuesday. “In AB533, the enabling legislation, I think it gave the CCB plenty of authority to ensure that the industry was diverse and address these issues. And I hope that with this report, these things will stay in the forefront of their mind.”

This survey marked the first time that demographic data had been collected on the state’s cannabis industry. Martin said the data will serve as “a baseline” that the Cannabis Advisory Commission can use to make recommendations to the board.

Since the board took over the regulation of the industry in July, there have been no additional opportunities for people to seek strictly limited dispensary licenses, but new licensing rounds in the future could allow for the diversification of ownership in the industry.

Other communities have taken steps to encourage participation in the cannabis industry among communities of color, including those most affected by enforcement of cannabis laws in the past. In 2017, the city of Oakland launched a cannabis equity program aimed at “prioritizing the victims of the war on drugs, and minimizing barriers of entry into the industry.” And in 2018, Maryland expanded its medical marijuana industry, while creating a new award process aimed at improving diversity.

As cannabis business continues to grow in Nevada, Harris emphasized the importance of making diversity a vital component of the $700 million a year industry.

“It's a new industry, this is our chance to get it right from the beginning,” said Harris. “How often do you start a brand new industry in your state, right? And so why not get it in, baked in, into the mentality from the ground floor… As long as I'm here, I'm gonna push for equity and try and make things better for Nevadans.”

Confronting a rise in youth vaping, experts strategize on actions for prevention

Man vaping

Public health officials have set their sights on raising the minimum legal sale age of tobacco products to 21, providing clearer labeling for cannabis products, improving youth education on cannabis and vaping and gathering more data on cannabis use. 

The strategies emerged from the Nevada Public Health Cannabis and Vaping Summit, a three-day virtual gathering of research and regulatory experts, policy makers, and others convened by the attorney general’s office and state health officials. The summit has come at a pivotal moment in the state’s public health efforts, with youth vaping on a significant rise and the Cannabis Compliance Board established less than eight months ago to improve regulation of marijuana.

The approximately 200 strategies crafted by the expert speakers and summit participants will form the foundation of an action plan that will be submitted to the Division of Public and Behavioral Health (DPBH) on Feb. 15 and will not include specific goals, but instead, will provide a set of tactics segmented by the five main tracks of the summit, which focused on cannabis prevention, tobacco products, cannabis and vaping regulation, law enforcement, and special populations. 

“This is intended to be a menu for you and for all of the stakeholder groups, so that you can identify needs and opportunities and use the action plan in whatever way serves you or your organization,” said Kelly Marschall, president of Social Entrepreneurs, Inc., who served as the primary moderator during the summit.

The action plan could potentially help get Nevada back on track with some of its efforts to curb youth vaping, as the state had been focused on combating the increasing uses of e-vapor products prior to the pandemic. That included joining an investigation into vape-maker JUUL over whether the company targeted youth.

Many of the strategies identified as higher priorities during the summit were focused on helping youth, including providing more mental health support for youth as a way to prevent and combat use of cannabis and vaping. 

Education also remained a popular strategy for prevention of cannabis use. Some popular education strategies included improving the perception of cannabis as a harmful substance, particularly among youth, and creating clearer product labeling so that consumers can better understand dosage and potency.

With all of those strategies in mind, Marschall hopes the action plan created from the summit will provide similar changes to the ones launched out of the statewide opioid summit in 2016.

“Once we had developed that action plan, even though it was a broad set of strategies and didn't specifically have goals per se, the state was able to use that,” said Marschall. “For example, the Southern Nevada opioid advisory committee actually emerged out of that opioid summit and then took some of the action plan items in that action plan and ran with them.”

Marschall also acknowledged the level of collaboration throughout the summit and said that it should create a better product with the final action plan.

Attorney General Aaron Ford opened the summit Tuesday by calling for a strategic plan to address problems emerging from the new legal cannabis industry and vaping, which has grown in popularity in recent years.

“Nevada, along with other states across the nation, is seeing troubling trends in morbidity associated with the use of e-cigarettes, vape juice, e-liquids, such as liquid nicotine, additives, and cannabis,” said Ford. “Together we’re going to identify priorities and strategies related to legal adult use, public safety, regulation, prevention, treatment, and oversight of cannabis and vaping products in Nevada.”

Data and trends

Across multiple measures, the survey data presented at the summit showed significant increases in vaping and cannabis use among Nevada high school and middle school students.

From 2017 to 2019, the percentage of high school students who used e-vapor products at least once in the past 30 days increased from 15 to 22.5 percent. For middle school students, that number increased from 6.7 to 12 percent over the two year span.

The survey data from 2019 also revealed that Nevada eighth grade students were far more likely to have used cannabis at least once in their life compared to those at the national level, with more than 22 percent of Nevada eighth grade students reporting some lifetime cannabis use compared to only 15 percent of eighth grade students nationwide.

Data that focused on special populations revealed that high school and middle school students who had depressive symptoms or identified as lesbian, gay, or bisexual were significantly more likely to have used cannabis across all surveyed measures, including past 30-day use and frequent use.

In 2019, 6.7 percent of Nevada high school students who identified as lesbian, gay, or bisexual reported having used cannabis at least 20 times in the past 30 days, compared to only 3.5 percent of those who identified as heterosexual.

Jennifer Pearson, an assistant professor at the University of Nevada Reno, also brought up the stark differences between urban and rural students in daily use of e-vapor products.

“We also see that living in rural Nevada is related to risk of being a daily vaper in middle school and high school students,” said Pearson. “So for example, 2.4 percent of urban high school students in Nevada are daily vapers and that's compared to 8.7 percent of rural high school students.”

The data and trends presented primarily came from the 2017 and 2019 Youth Risk Behavior Surveys (YRBS), which used data collected by the Centers for Disease Control and UNR from a random sample of high schools and middle schools across the state. The data was also weighted at the state and regional levels based on sex, race and ethnicity, and grade level.

Despite the emphasis on the data already being used, strategies also emphasized a need to collect more data. Many summit participants voted for and discussed strategies that focused on completing more research and making more decisions based on available data.

The state is already taking steps in this direction. During the opening session of the summit, Ford announced that Nevada now has a cannabis epidemiologist to assist in collecting data. Ford also said this data collection would focus on the trends such as an increase in lung injuries linked with the use of nicotine and cannabis products.

Regulation

Speakers at the virtual summit also discussed the current regulations and the future goals and challenges for vaping products. In the 2021 legislative session, advocates are looking to propose raising the minimum legal sale age of tobacco products from 18 to 21. 

Public health experts also aim to protect the gains achieved in 2019, particularly to defeat the effort to repeal how vapor products are taxed as “other tobacco products” and preserve vaping prevention and control funding. 

“Buckle up, it’s going to be a little bit of a wild ride,” said Democratic state Sen. Julia Ratti, chair of the state Senate Health and Human Services Committee. “Because there's just an awful lot of uncertainty and fluidity when it comes to this budget and we're going to have to start the process by making the cuts and assuming that we're not going to have the revenue of a recovering economy.” 

The Cannabis Compliance Board (CCB) also faces some uncertainty in the face of some of the statewide budget cuts.

During the summit, CCB board member Riana Durrett said the agency is currently preparing a report on approaches to handling the illegal market. Durrett thinks the report could prompt legislative action during the upcoming session. 

Although budget cuts could restrain any new action taken to regulate the illegal cannabis market in Nevada, there were strategies introduced at the summit to improve regulation of the legal cannabis market.

One was to ensure clearer product labeling. Many experts at the summit emphasized that there is a general lack of perception about the harmful effects of cannabis, and some said that creating more consistent product labeling and including more product warnings could help raise awareness.

The CCB already has a number of regulations in place aimed at product marketing and packaging, and many of these regulations are intended to prevent youth use of cannabis products.

Under existing rules, advertising may not be false or misleading, depict actual consumption or depict someone who appears to be under 21 or be placed near a school, playground, or sporting event. Pictures of toys, cartoons, mascots or anything appealing to children is also not allowed. 

Packaging must be childproof and may not be packaged or marketed as candy. 

Aside from advertising regulation, the CCB also extensively monitors product quality from “seed to sale,” as explained in the summit. The board examines and tracks the growth of the cannabis plant and the pesticides used to treat the plant. It also reviews all the ingredients and verifies that everything is safe for ingestion. 

Even with this strict regulation in place, there is still an extensive illegal cannabis market in Nevada, and youth cannabis use is on the rise.

After the summit’s action plan is submitted to the DPBH in February, the Legislature and other stakeholders from the event will have an opportunity to act on the recommended strategies.

Sisolak names former marijuana trade group leader, Reno doctor to Cannabis Compliance Board

A cannabis bud in a gloved hand

The former head of the most prominent marijuana trade association in Nevada is one of the final two members named to the board regulating the state’s legal marijuana industry.

Gov. Steve Sisolak announced on Monday that he had appointed Riana Durrett, the recently departed executive director of the Nevada Dispensary Association, to the Cannabis Compliance Board. He also named Dr. Bryan Young, a Reno physician, to the five-person panel.

“These final appointments to the CCB each bring their own unique expertise and insight to the table,” Sisolak said in a tweet. “I am confident their contributions to this board will only amplify the sound judgment and strong regulation carried out by the CCB.”

Durrett had been executive director of the dispensary association since 2015 until the group announced late last month that Layke Martin, a lawyer and the wife of state Treasurer Zach Conine, would take over. Durrett has a law degree from UNLV’s Boyd School of Law and is pursuing a master’s degree in gaming law and regulation.

She represented the industry as a lobbyist through major shifts, starting when the first medical marijuana dispensaries were opening in Nevada in 2015, to the legalization of recreational marijuana in 2016 and numerous changes to law and regulation since. She is married to Democratic state Sen. James Ohrenschall.

Young worked as a physician in Las Vegas and has spent the last 12 years practicing in the Reno area. He has his medical degree from the University of Nevada School of Medicine.

Other members of the board include former Gaming Control Board chair Dennis Neilander and Las Vegas banker Jerrie Merritt. The board is chaired by former Nevada Supreme Court Chief Justice Michael Douglas.

The bill authorizing the board requires that the panel include a cannabis industry expert, an attorney, a doctor, a finance expert and someone with law enforcement or investigation training.

The board took over cannabis industry regulation duties from the Nevada Department of Taxation on July 1 with a vision of bringing Nevada’s “gold standard” gaming regulation protocols to the marijuana industry. In its first few months of operation, the board has adopted new regulations on the industry, lifted a freeze on license transfers, and levied complaints and record-setting fines against companies accused of violating state rules.

Board members, who are appointed by the governor, work part-time and are paid annual salaries ranging from $20,000 to $27,500. 

Officials hope changes to rental assistance applications will ensure aid meets anticipated mountain of need

The city of Las Vegas operated The Courtyard provides day shelter in the homeless corridor on Foremaster Street

Even with residential eviction moratoriums extended through the end of the year, more than a third of Nevada renter households will be at risk of losing their dwellings by the end of the calendar year amid a slow economic recovery and bottlenecked rental assistance programs, according to new projections.

The COVID-19 Eviction Defense Project and the Aspen Institute published a report in August that shows 181,966 Nevada households, or 418,523 individuals, will be vulnerable to evictions by the end of December.

That’s an increase from an earlier report assuming 118,000 to 142,000 households could struggle to pay rent by September. The consequences of that were largely averted by state and national eviction moratoriums that provide protection through the end of the year. 

Those dire figures indicate an eviction cliff that state leaders are trying to avoid, in part through the fine-tuning of federally funded rental assistance programs that must be expended by the end of the year. Only about 10 percent of the $70 million initially allocated toward rental assistance by the state and Clark County has been paid out, despite the programs launching months ago and the state still logging near-record high unemployment levels.

Nancy Brune, head of the nonpartisan Guinn Center for Policy Priorities think tank, thinks the updated scenarios concluding 37 percent of Nevada households could be at risk of eviction are based on solid methodology based on hard data rather than projections. With little evidence of additional financial aid coming from the federal government in the near term, Brune said that makes the worst-case eviction scenario much more likely.

“At some point it will be lifted and because our economy is still recovering slowly, we will see that spike in eviction simply because we have … some folks who are waiting on more federal assistance,” Brune said. “That doesn't look like it's coming anytime soon.”

The Aspen Institute report relies on data from the Census Bureau’s Household Pulse survey, deeming respondents “housing insecure” if they have slight or no confidence they can pay next month’s rent on time, or couldn’t pay the last month’s rent on time. It assumes no economic recovery, with report authors citing accelerating job losses.

It’s a somewhat different methodology than the one used earlier to gauge eviction risk. The initial model incorporated job loss scenarios, enhanced unemployment payments and assumed an economic recovery — that 25 percent of unemployed renters would return to their jobs, based on Congressional Budget Office projections.

The Guinn Center said the evictions would come in three phases — first when moratoriums phase out, then when federally enhanced unemployment benefits lapse, then when renters run out of savings and credit. And the think tank’s research has also highlighted other unsettling trends — that the eviction crisis is likely to fall harder upon communities of color, and the economic effects are likely to be felt most dramatically by people who are already making lower wages.

“I know that we are qualified for the additional $300. But I don't think it’s as much as people were expecting,” Brune said. “The states haven't received more federal assistance and so the support that we've been able to use to stabilize folks in their homes will disappear at some point.”

Assistant Clark County Manager Kevin Schiller said that based on all projections, the crisis will be far from over by the end of the year when aid must be expended, and existing rental relief funds might help 15,000 to 20,000 households — a fraction of those considered at risk.

“I think we're in for a wave of continued need across all social services and rental assistance is obviously one of the most costly,” he said. “We are actively trying to look at how we can continue to provide some level of service in this category and others because obviously diversion is much more cost efficient than reacting to somebody who's been evicted.”

Rental Assistance

While the federal Centers for Disease Control and Prevention did extend the eviction moratorium until the end of the calendar year — beyond the state’s moratorium ending Oct. 14 — the state’s rental assistance program continues to trickle out funds relatively slowly.

Statistics from the state show that about $5.8 million in rental aid had been provided in Clark County through Sept. 25. Housing programs in the other counties have distributed about $1 million combined. 

But the $7 million disbursed so far statewide is only 10 percent of the $70 million the state and Clark County have put toward paying back rent. The federal funding behind the programs must be expended by the end of the year.

State Treasurer Zach Conine, whose office is involved in managing the programs, said he wasn’t satisfied with those statistics.

“We'll be satisfied when we spend all of the money,” he said. “And when we work with the federal delegation to get more money, so that we can try and keep as many Nevadans as possible in their home.”

Conine said he expects the housing authorities to move to a quicker, less document-intensive process that will rely more on the attestations of the applicants than the confirmation of all the information provided. In Washoe County, for example, only 26 percent of applications have been finalized, with the majority stuck in a back-and-forth sending documents to the authority.

“It's not because the need’s not there. It’s because the process is too hard,” Conine said. “The more complexity we add, the more falloff we have.”

Meanwhile, a state website for accepting applications says Clark County is paused for new applications, as it has been since mid-August, while administrators try to work through a backlog of more than 40,000 inquiries.

The system is administered by 14 separate agencies, but Schiller said the county is moving to bring on an outside vendor in the next few weeks to handle the inquiries and process the applications through a centralized system. 

The fragmented arrangement was intended to spread the housing assistance work more broadly and to connect people in need with agencies that could possibly address needs even beyond paying rent. But it’s prone to duplicate requests from people who have filed in multiple locations, and a centralized portal is aimed at at least making it easier to identify duplicates. 

“Given the new process, we're pretty confident we're gonna expend all those dollars,” Schiller said of the $50 million Clark County has to give.

One solution that doesn’t appear possible is having landlords apply on behalf of tenants. Renters must confirm that they have fallen behind on rent for a COVID-19-related reason to qualify for the federal aid, but a landlord cannot do that for them.

The state, however, is working on ways that landlords of multiple units could bulk-submit applications with cooperation from tenants so agencies could pay them in a single installment.

Another criticism of the program is that it is helping tenants temporarily catch up on their overdue rent, but not providing a longer-term solution, so renters are immediately falling behind again.

“Of the money that has gone out to landlords, it has not necessarily prevented eviction cases from still coming before the court, and the associated health and safety risks of trips to the courthouse,” said Bailey Bortolin, who represents legal aid providers, in a hearing about an eviction mediation program. “Many of those people don't know where to go from here and have already fallen behind on rent again. There's a long line of applications and many of those are duplicates. At the rate it's being handled, many people may face eviction before they've been able to have their applications processed.”

Conine acknowledged the problem, and he hopes that a forthcoming eviction mediation program authorized by the Legislature will help landlords and tenants determine whether unpaid rent is a temporary problem, or a structural issue that is unlikely to improve and might require a solution such as downsizing.

In a victory for tenant rights advocates, the Nevada Supreme Court’s regulations on the program — expected to take effect on Tuesday — have few barriers to entry. Either tenants or landlords can request mediation when an eviction looms, and tenants are not required to have tried to seek rental assistance before being accepted to the program.

Representatives for apartment companies had sought such prerequisites to prevent tenants from using the program if they had stopped paying their rent for reasons unrelated to the pandemic. The court did concede to their request to put a sunset date on the program, at the end of May, but indicated it would extend the program for good cause.

Conine said he still believes the state can get all the aid out the door before the deadline for spending, but at the same time has been calling for more time to meet the requirements of the CARES Act.

“One of the most consistent asks … has been for additional flexibility, inclusive of having a little bit more time to spend the money,” he said.

In ruling critical of state’s oversight, judge says even smallest owners of marijuana companies should have been background checked

An employee prepares cannabis for planting in the propagation room at Reef Dispensaries

A Las Vegas judge has ruled that marijuana license winners that have not had background checks on all of their part-owners — even ones with small shares — cannot use the license to open a dispensary unless they correct the issue.

District Court Judge Elizabeth Gonzalez issued a permanent injunction on Thursday, bringing a level of closure to many major issues in a drawn-out legal case so large it’s sometimes called “World War Weed.” Her order gave credence to many of the complaints brought by plaintiffs who did not win coveted and limited dispensary licenses in 2018 and argued the state’s process for vetting applications was marred by favoritism and shifting standards midway through the process.

Certain actions by the Nevada Department of Taxation, the state agency that issued the licenses, created “an uneven playing field because of the unequal information available to potential applicants. This conduct created an unfair process for which injunctive relief may be appropriate,” Gonzalez wrote.

In the 2018 licensing round, 127 companies submitted 462 applications for licenses that would have given them a rare chance to expand their business in the strictly limited world of legal marijuana. Of that, 61 licenses were distributed among only 17 different companies, and many who missed out cried foul.

Gov. Steve Sisolak said in a press release on Thursday that he is confident the state, which has now created and appointed a Cannabis Compliance Board to regulate the marijuana industry, “will implement lessons learned from this case.” Democratic Attorney General Aaron Ford, whose office represents the taxation agency under fire, framed the decision as one that brings clarity to a cannabis sphere divided over actions taken in 2018.

“While some litigants have characterized this long, hard fought case as a war, my office’s policy is to do justice, which in this instance means opposing this lawsuit in an open, fair manner to enable the Court to determine the legality of the 2018 retail marijuana competition,” Ford said in a statement.

Gonzalez determined that the state agency violated the will of voters, who legalized marijuana through 2016’s Question 2, by approving applications of companies without conducting background checks on owners who held a share of less than 5 percent. 

Four companies could have been blocked by the injunction: Helping Hands, Greenmart, Lone Mountain and Nevada Organic Remedies. But a court filing indicates there is a path forward for getting approval for applicants who were truthful in their application, and Ford's office said that after questions about ownership were resolved for the four companies, it "did not identify any applicant to whom such a restriction would apply."

She also faulted the former head of the marijuana enforcement division, Jorge Pupo, for deleting text messages from a personal phone he used heavily for work after the attorney general’s office had asked him to preserve the evidence.

“The Court finds evidence has been irretrievably lost as a result of his actions,” Gonzalez said, concluding that the evidence presumably would have been detrimental to the state’s case.

Gonzalez also said that an established process of funneling applicant requests through a single point of contact was circumvented, and Pupo conducted significant conversations directly with certain applicants in violation of protocol. That led to some companies having key advice on how to complete an application that never made it to other applicants.

“The (Department of Taxation) made no effort to ensure that the applicants received the same answers regardless of which employee of the DoT the applicant asked,” she said. 

While the ruling found numerous faults with the state’s process, it did not find that any monetary damages could be awarded, nor could new licenses be granted.

“With the anticipated return of tourism after the abatement of the current public health emergency, significant growth in legal marijuana sales is anticipated,” she said. “Given the number of variables related to new licenses, the claim for loss of market share is too speculative for relief.”

The ruling could have implications for a recently approved partial settlement between some of the many former plaintiffs and the state. That agreement calls for reshuffling of licenses and expedited approval of certain dispensaries, but some of the licenses in question could be unusable — at least for now — because of the injunction.

A spokeswoman for the Cannabis Compliance Board said “the CCB is aware of the order and is currently reviewing it.”

But for some plaintiffs who opposed the settlement on the grounds that it didn’t include all parties and didn’t address what they view as the central injustices in the application process, the injunction is vindication.

“We always knew it was unfair and it’s nice to have a judge confirm what we actually knew,” said David Goldwater of Inyo Fine Cannabis Dispensary in Las Vegas. “It’s not an indictment of the people who got licenses. It’s an indictment of the state and the process they went through, and it’s mismanagement on the state’s behalf.”

Updated at 8:52 p.m. to clarify status of companies potentially affected by injunction.

Cannabis board cracking down on marijuana companies that are late on taxes, license fees

Nevada’s Cannabis Compliance Board is implementing stricter procedures after holders of some 70 marijuana business licenses had past due taxes or didn’t renew their licenses on time.

Board Executive Director Tyler Klimas said that out of more than 700 marijuana licenses in the state, about 560 were due for renewal by June 30. But 11 licensees, holding a collective 22 licenses, hadn’t submitted renewal paperwork or fees well into July.

“We did not renew these licenses, and instead sent correspondence indicating that METRC access would be shut off immediately,” Klimas said at a board meeting on Tuesday, referring to the state’s seed-to-sale tracking database needed to conduct legal marijuana transactions. “This correspondence resulted in one licensee surrendering its distribution license, and the others fulfilling their financial obligations for the renewal and application submissions.”

He also said 18 licensees, who hold a collective 48 licenses, had outstanding tax debts ranging from $500 to $4 million that dated back as far as March 2019. The board sent messages indicating the companies would be cut off from the tracking database if they didn’t pay up, and all delinquent licensees have since paid their debts or are working out payment plans with the Nevada Department of Taxation.

Klimas said that moving forward, the board plans to notify businesses immediately if they miss a deadline, terminating access to the database until the issue is resolved.

“With these guardrails in place, CCB staff now has the tools to ensure licensees understand that full compliance, including any tax obligations, must be fully resolved before license renewal will be considered,” Klimas said.

Nevada cannabis businesses are subject to several taxes, including the commerce tax on gross revenue over $4 million, the modified business (payroll) tax, sales and use taxes, a 15 percent wholesale tax and a 10 percent retail tax.

The legal marijuana industry yields the state about $100 million in revenue each year just from wholesale and retail marijuana tax. Application, license and other fees yield more than $5 million for the state each year.

Late tax payments are subject to penalties and interest, and intentionally failing to file for, pay or collect tax is considered a Category 1 violation — one so severe that a person would be ineligible to receive a license.

The crackdown on tardy payments is the latest change since marijuana regulation transferred from the taxation department to the Cannabis Compliance Board, which is solely focused on marijuana rather than collecting taxes for a wide range of businesses. The board is modeled after Nevada’s gaming regulatory regime and has imposed tougher sanctions on businesses that are out of compliance with detailed regulations, including handing down a record, $1.25 million penalty earlier this summer.