Nevada officials visit San Francisco to explore how marijuana lounges are run

SAN FRANCISCO — A high-stakes NFL Monday night football game lights up an 82-inch television on the wall. Swing music plays in the background as about two dozen people sit around the TV eating pizza still steaming hot from a neighboring restaurant.

As fans of both the St. Louis Rams and Kansas City Chiefs prepare for kickoff, others in the cozy indoor facility sit on a side couch in front of their laptops, placed on one of five small coffee tables. A woman in her 20s reclines peacefully in a heap of pillows on another sofa, with wireless headphones covering her ears.

The scene of a legal marijuana consumption lounge in 2018 varies greatly from what previous generations may have associated with legalized pot, said Tom Powers, the guest service manager at Harvest dispensary. When Powers and college friend Marty Higgins purchased the dispensary three years ago, its attached consumption lounge — filled with old, tie-dye curtains and a dirty carpet floor that reeked of the plant — attracted drug addicts and “unsavory” clientele, he said.

Now, after a complete interior makeover that includes the installation of four chandeliers, a wood-grain panel wall, a large tile floor, bright blue wall paint, a large array of modern furniture and a state-of-the-art ventilation system that all but completely removes the scent of the plant, Powers’ facility attracts primarily women, seniors and millennials of all cultures and backgrounds.

“There’s so many misconceptions about the industry still,” Powers said. “But this is the reality of our business. It's a slow process."

Harvest was one of two consumption lounges toured Monday by Nevada legislators, in town on a one-day fact finding trip with San Francisco marijuana officials and business owners to learn best practices for implementing the consumption lounges back home. Clark County and Las Vegas officials have explored the possibility of such lounges as far back as September of last year, and San Francisco is the only major U.S. city to offer full-scale facilities where the plant can legally be smoked, vaped, dabbed or eaten.

State senator and Clark County Commissioner-elect Tick Segerblom led the seven-member Nevada group, which also featured five members of the Nevada Assembly — Steve Yeager, William McCurdy, Daniele Monroe-Moreno, Chris Brooks and Sarah Peters — as well as North Las Vegas Councilman Isaac Barron. Segerblom said he hoped to bring the lounges to the county as early as January when his term begins, while Yeager wishes to establish minimal ventilation and taxation requirements at the state level. Barron, who takes credit for making North Las Vegas the home of the valley’s first 24-hour dispensaries, said he wants to follow suit as soon as consumption lounges are up-and-running in other area jurisdictions.

Monday morning started with a two-hour conference with San Francisco’s Office of Cannabis. At that meeting, agency director Nicole Elliott told the Nevada cohort that local government’s lead allowed lounges to take a trial-and-error approach to entering California’s legal weed industry as far back as 2008. Since then, as state law has evolved to accommodate, as many as seven lounges across the city operate successfully with only three being shut down earlier this decade by federal authorities.

While San Francisco authorities have allowed the pot lounge industry to thrive, they’ve essentially warned business owners to operate at their own risk, Elliott said.

“We warn them that the state might not always see eye-to-eye with us,” she said.

Unlike in Nevada’s proposed ordinances, consumption lounges in San Francisco are either attached to a dispensary, or the lounges and the dispensaries are one in the same. Elliott said first-generation dispensaries that have been grandfathered into recent ordinance passages feature shopping areas where customers can openly imbibe in the plant.

Modern facilities, like Harvest, feature attached lounges where dispensary customers enter a separate room to consume their weed purchases. Harvest charges a $15 one-day membership fee for its customers to use its lounge, or a $50 monthly fee that includes the rental of a cubby-style locker where pot purchases can be stored and smoked at a later date.

To prevent illegal pot from entering its consumption lounges, San Francisco officials require that only marijuana purchased in the same dispensaries owned by consumption lounge proprietors can be used in the respective lounge.

That ordinance has allowed Barbary Coast, whose downtown dispensary opened in 2013, to add a consumption lounge to its facility last year. Unlike Harvest, which credits 90 percent of its business to local weed consumers, Barbary Coast considers 60 percent of its buyers to be tourists and offers the use of its lounge for free.

Marijuana customers are limited to 30 minutes at Barbary Coast’s lounge, said executive director Nate Haas. He told the Nevada legislators that customers visibly under the influence of alcohol are issued a breathalyzer test, and normally “asked to come back another day.”

“We’ve found that alcohol and cannabis are not a good mix,” Haas said. The facility also provides customers with a handout on safety tips — which include avoiding cannabis if they’re dehydrated, driving or taking a flight that day — before they enter the lounge.

Per city ordinance, San Francisco’s lounges can’t sell food items to customers. But Powers provides his own food – like the pizza for the football game – to Harvest’s lounge members during three to four weekly events, which include education seminars and board game nights in addition to sports watch parties. Customers wanting to bring food items inside Barbary Coast’s free customer lounge are also evaluated on a case-by-case basis, Haas said.

“As long as it’s not large quantities of hot food and big meals,” he explained. “We prefer smaller snacks and munchies.”

Segerblom described the tour as “impressive,” saying San Francisco’s pot lounge policy was the best he had experienced to date. But with Las Vegas “anything is possible,” he added, citing the growth of marijuana entertainment facilities like the newly opened Planet 13 as examples of the innovation Las Vegas pot lounges could bring to the valley.

“The first dispensaries in Las Vegas looked just like this,” he said, standing in the main lobby of Harvest. “We can start small, but we don’t have to.”

Per Nevada’s recreational weed laws, separate businesses not licensed by the Department of Taxation as a marijuana establishment can’t occupy the same building as a pot dispensary. That means a consumption lounge built into the same facility as a dispensary, similar to those found in San Francisco, would be illegal.

The law, passed in the 2016 election and enacted on Jan. 1, 2017, also prohibits state legislators from altering such restrictions for three years. But Segerblom said a legal workaround, where a small walkway off dispensary property could connect to an adjacent marijuana lounge on neighboring property, would be “perfectly fine.”

Monday’s trip to San Francisco followed over a year’s worth of continuous efforts to establish venues for an estimated 42 million annual tourists to the valley to consume pot legally. While marijuana sales and possession has been legal since Jan. 1, 2017, weed users in Nevada are restricted only to private residences. That means that hotels and gaming facilities, where most tourists stay and play, are off limits.

Segerblom in 2017 proposed Senate Bill 236 at the Nevada Legislature that would have given state permission for local governments to license lounges and special events for marijuana consumption. When the bill failed to make it out of the Assembly, Segerblom in September of last year sought an opinion from the Legislative Council Bureau, which responded saying the lounges could be locally authorized as long as consumers inside the lounges didn’t possess and consume quantities over the state’s legal limit of one ounce of flower.

Las Vegas officials last December drafted an ordinance for consumption lounges and held a public workshop with a goal to begin opening the lounges in March or April. That plan was shelved when then-U.S. Attorney General Jeff Sessions on Jan. 4 eliminated Obama-era Department of Justice protections for marijuana in pot-legal states.

As consumption lounges proceeded to open in Denver and metro Boston this year, the city of Las Vegas resumed talks for the facilities, holding a second public workshop on June 27 with a proposed ordinance that would allow operators to sell weed paraphernalia, like pipes, bongs, cigarette paper and lighters, but not sell the plant itself. The owners would be able to enact a cover charge and serve food on the premises, per the proposed ordinance, as long as the food was not marijuana-laced. Alcoholic beverage sales in separate rooms on the premises would also be allowed, as long as the drinks being sold contain less than 11 percent alcohol by volume, and customers smoking inside the lounges would not be allowed to be visible to the public outside the venue, meaning outdoor patios or rooftop smoking areas would be banned.

Councilman Bob Coffin said Monday from Las Vegas that the city ordinance could be introduced at a council meeting and sent to a recommending committee by early December. Coffin said amendments to the draft were still “very likely,” given the strong opinions — both in favor and against the lounges — of leading lobbyists and industries in the valley.

The Clark County Commission since first addressing the topic in September 2017 has shelved plans for consumption lounges, and no ordinance proposals have been publicly introduced. But Segerblom said an ordinance is “in the works” and plans to release a public proposal when his term begins.