LAS VEGAS (KLAS) — A total of 100 applications for pot lounges were submitted to the state before the application window closed on Thursday, according to the Nevada Cannabis Compliance Board (CCB).
Does that mean there will be 100 new places to toke up legally on Jan. 1? Far from it. Here’s a breakdown of the 100 applications and what happens next:
- 20 “retail” applications: Retail pot lounges — cannabis consumption lounges in business-speak — are attached to existing licensed cannabis businesses. If the application is approved, the license is issued. Dispensaries have paid $100,000 to apply for these licenses. There’s a good chance that all 20 will be approved, and then the companies will need to go through channels where they want to open the lounge.
- 80 “independent” applications: All applications must be reviewed before the next step, and it’s high stakes for smaller businesses for three reasons. First, only 20 independent licenses are available. Second, 10 of the licenses are reserved for “social equity” applicants — minority-owned businesses. Third, the eligible applications will be put into a lottery.
Let’s break it down some more:
- 50 “independent” applications: These applicants paid a nonrefundable $10,000 fee. If all pass review, the odds are 5-to-1 to be chosen in the lottery.
- 30 “social equity” applications for “independent” lounges: These applicants paid a nonrefundable $2,500 fee. If all pass review, the odds are 3-to-1 to be chosen in the lottery. The goal of dedicating 10 licenses to social equity applicants is to add opportunities for minorities in the business. Minorities were largely shut out of the process as cannabis businesses took root in Nevada, and there are several reasons. But the biggest is about money. Big business had an enormous advantage over minority-owned businesses as licenses for dispensaries, cultivation facilities and distributors were issued. Nevada was criticized for failing to include minorities as the industry grew.
“The CCB anticipates the first lounges to be licensed and able to open in early 2023,” according to a Monday news release.
“The CCB anticipates conducting two drawings via a random number selector in early December to determine the issuance of independent cannabis consumption lounge licenses for non-social equity and social equity applicants,” the news release said.
After a license for a pot lounge is secured, local government is the next hurdle to clear. Business licenses, zoning considerations and other local regulations at the city or county level must be met.
And some cities aren’t even considering pot lounges at this time.
Clark County and the City of Las Vegas locations are eligible. Half of the state’s counties and nine cities opted out. In Southern Nevada, Henderson, North Las Vegas, Boulder City and Mesquite are not eligible. Elsewhere in Southern Nevada, Nye County and Pahrump are eligible. In Northern Nevada, Washoe County and Reno are eligible.
If pot lounges are a success, people who failed to win in the lottery will be clamoring for the next opportunity. Will Nevada quickly move to open up new opportunities for pot lounges in the future? No one knows for sure.
And what might shake out in the lottery? Will lawsuits change the game? For example, what would happen if half the licenses go to Northern Nevada businesses — just by the luck of the draw. Would businesses challenge the fairness of a lottery system?
Stay tuned for what happens next.