City of Reno looks to make more money off pot sales

Reno's four marijuana dispensaries altogether pulled in $21 million during Nevada's first six months of recreational marijuana sales, and the city of Reno wants to capitalize on their success.

The Reno City Council this week reviewed a proposed set of permanent regulations that would have the city collect 3 percent of dispensaries' gross revenue, rather than about $19,000 from each per quarter. All retail marijuana dispensaries in Reno — including Mynt, Blum, Sierra Wellness and the Dispensary — currently are operating under the city's temporary regulations.

If sales remain consistent, the city would collect about $1.2 million a year from dispensaries, not including additional general business licensing fees, according to Scott Gilles, the city's legislative relations program manager. Under the current fee structure, the city would be collecting about $300,000 a year from the dispensaries altogether.

The council is expected to vote on the permanent regulations in March and, if approved, they would go into effect July 1.

"Of course they would (make more money), as they should. They stand to make more money, but I don’t think that anyone is in opposition either because this is about the community making more money off of something they weren’t making money off of before," said Jeff Grossman, manager of the Dispensary.

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The new regulations would change the rules not only for local dispensaries but also establishments licensed to cultivate, produce and test retail marijuana. Establishments besides dispensaries have been paying approximately $5,000 a quarter.

Currently, Reno is home to four dispensaries, eight cultivation centers and five production facilities, Gilles said. Other likely changes to the city's regulations include:

The city will establish a temporary cap of eight retail marijuana dispensaries, despite the state's allowance for 10 in a city the size of Reno.

Marijuana establishments would be prohibited in specified zones in the South Reno area as well as "gateway" areas, namely near Verdi, where visitors enter Reno and first see the city.

Dispensaries would be limited to operating between 8 a.m. and 11 p.m.

Licensed dispensaries could deliver recreational marijuana only to private residences, but no more than 5 ounces per trip and no more than 1 ounce per customer.

Outdoor cultivation would be prohibited.

Marijuana lounges, or locations that allow marijuana consumption outside of private residences, would be prohibited.

Signage would be limited for dispensaries, and other establishments will not be allowed signage.

Council members mostly agreed to defer to state law when it came to regulations, but local governments can tighten regulations on licensing and zoning within the boundaries of state law. Local governments, for example, cannot tax the establishments any more than 3 percent of their gross revenue.

Some of the council members disagreed, however, on where marijuana establishments should be within city limits.

Councilwoman Jenny Brekhus advocated for more dispensaries near residential areas so that patrons would not have to drive so far to attain product, but Councilwoman Neoma Jardon suggested that home delivery services could fulfill those customers' needs.

Currently, marijuana dispensaries in Reno are clustered on the outskirts of downtown Reno and in Midtown. Mynt is the only dispensary located in downtown, and city officials are considering prohibiting new dispensaries in downtown.

"I knew why we worked so hard for that location. We’re happy with where we’re at," said Joey Gilbert, co-owner of Mynt.

He said that the proximity to downtown was a major perk for the business.

The city is also considering a distance requirement between dispensaries to avoid too many in one area.

"Just like I wouldn’t want to see tattoo parlors or 7-Elevens or Starbucks on every corner, I would not want to see dispensaries on every corner. I’m part of this community too," Gilbert said.

Cultivation and production centers tend to be in industrial areas since the smell of the facilities is often pungent and security is a concern, so there will likely be few changes as to where those facilities can be located.

The state also is working on its own permanent regulations, which the Nevada Department of Taxation is looking to adopt on Jan. 16. The state's regulations address industry standards for licensing, labeling, security, storage, delivery, testing, etc.