New rules aim to stimulate Nevada’s nascent medical marijuana market

David Zalubowski / AP

It's been two years since the Legislature approved a new law establishing a system of dispensaries and growing facilities to make medical marijuana more accessible to patients, but so far not a single bud has been sold.

That could change in the coming weeks with the planned opening of the Euphoria Wellness dispensary in Las Vegas, but there's no denying there have been growing pains as the industry struggles to launch.

Many of the issues stem from unintended consequences arising from the way the 2013 law was written, and Sen. Tick Segerblom, a leading marijuana advocate, made it a priority during the recently ended legislative session to fix as many problems as possible.

"When you grow (an industry) from scratch, there's all kinds of issues you never thought about," Segerblom said. "Basically all these things we're dealing with are things we've learned over the last two years."

The session got off to a rocky start, with the Republican-controlled Legislature quickly passing on a bill that would have legalized recreational marijuana in the state and showing little interest in various bills proposing tweaks to existing medical marijuana law.

"It looked pretty hopeless," Segerblom, a Democrat, said.

But Segerblom found an ally in Republican Sen. Patricia Farley, and the two were able to push through several bills that could have an immediate impact on medical marijuana businesses.

"I think we made major improvements," Segerblom said.

Senate Bill 276 is intended to give medical marijuana entrepreneurs more flexibility with their businesses, allowing investors to sell or transfer their interest in a dispensary, lab, production or growing facility to another party, something that wasn't allowed under the previous law. The change will allow medical marijuana businesses to bring on new investors to raise capital or to cash out shareholders who no longer wish to be in the medical marijuana business. The law also allows marijuana establishments to change locations, so long as they stay in the same jurisdiction for which they're licensed and receive local government approval.

A different bill, Senate Bill 447, made various tweaks to criminal statutes surrounding marijuana and medical marijuana that deal with things like counterfeit patient registration cards and the production of cannabis concentrates. The bill also deals with noncriminal matters, most importantly allowing the use of certain pesticides in cannabis growing operations, something that's common in states like Colorado and California but wasn't allowed in Nevada.

Assembly Bill 70 also started out with a narrow focus — this time dealing with taxes on medical marijuana — but was expanded to help out businesses by allowing third party vendors to be used in operations. Previously, any nonpatient stepping foot into a dispensary or growing facility had to be an employee or volunteer of the establishment and register with the state. The new law will allow third party contractors to be hired by multiple businesses at a time, so long as the contractor is registered with the state.

"Everyone realizes (medical marijuana) is here, so now it's become how can we make the business better?" Segerblom said. "It's more of a mentality about helping businesspeople as opposed to making marijuana more available."

The goal, Segerblom said, is to get the businesses up and running in advance of the 2016 election, when Nevada voters will decide whether to legalize recreational marijuana in the state.

"We want the voters to see what it's like," he said, "so we need to get these things out there so folks can see these are not bad operations."

With states like Colorado and Washington already bringing in hundreds of millions of dollars through their recently launched recreational marijuana markets, Segerblom said expanding access in Nevada would be a major revenue generator for the state.

"We are perfectly situated to take advantage of this for all kinds of reasons. For us not to have marijuana tourism when Colorado and Washington have it just makes no sense," he said. "The reality is they're already (smoking) it, we're just not getting any tax revenue."

Sun reporter Kyle Roerink contributed to this story.