Learning from Las Vegas: 5 lessons from 5 years of legal weed in Sin City

Published on July 27, 2022
Las Vegas has enjoyed five years of legal cannabis stores, but the industry still has room to grow (bluejayphoto/iStock)

It’s hard to believe five years have passed since Nevada state Sen. Tick Segerblom stood at a Reef Dispensary podium and welcomed the world to “Amsterdam on Steroids.” On the eve of launching adult-use cannabis sales back on July 1, 2017, Segerblom hyped Las Vegas as a legal marijuana paradise unlike any other.

Las Vegas boasts drive-thru purchasing and the world’s two largest weed stores, but casino opposition has delayed the opening of consumption lounges.

“People will come from every corner of the world to experience this,” he promised.

As Sin City celebrates its fifth anniversary of adult-use cannabis sales this summer, some of Segerblom’s prophecy has come true. Las Vegas no doubt stands out from other legal markets. The world’s two largest dispensaries operate within a 10-minute drive of one another; weed store drive-thrus let partiers across the city buy flower, edibles, and cartridges like fast food; and the famed Vegas Strip at times smells like a giant four-mile hot box.

Room for improvement

Still, in some aspects the Vegas cannabis industry still has a long way to go. Nevada has given the green light to legal cannabis consumption lounges, but bureaucratic hiccups and resistance from the almighty gaming industry continues to stall progress on giving people a legit place to consume the plant. Only a small tasting lounge on tribal land serves a few dozen customers each week. The other tens of thousands of cannabis-buying tourists still risk being cited and owing hefty fines when lighting up in their hotel rooms or in public.

Vegas’ cannabis journey has been anything but smooth sailing. Corruption scandals involving dispensary heads, testing labs and state regulators have marred an otherwise successful industry that has raised about $560 million in taxes in the past half-decade and given over $250 million of that money to public education.

With both its successes and struggles in mind, here are our five biggest lessons from Sin City’s roller coaster ride through five years of legal weed.

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1. Staying open 24 hours actually deters crime.

An unoccupied dispensary is a dispensary begging to be burglarized. Believe it or not, thieves tend to gravitate toward empty buildings with tens of thousands of dollars cash inside. Until Uncle Sam legalizes the plant federally and more cannabis businesses can bank like the rest of the world, dispensaries will continue to be prime targets for crooks — especially when they’re closed.

Las Vegas Police reported that nearly half of the 45 Las Vegas Valley dispensaries selling recreational weed fell victim to theft, burglary, or robbery within one year of the adult-use sales launch. That was back when local ordinances forced just about all cannabis stores to close between 3 a.m. and 6 a.m.

Las Vegas and Clark County officials slowly did away with the restrictions. Not surprisingly, more than a third of dispensaries are now open 24 hours and burglaries have since declined.

“Criminals look for the path of least resistance to get cash and other items of value,” explained Las Vegas Police spokesman Larry Hadfield. “Having people inside the dispensary is a deterrent to them.”

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2. Cannabis taxes are a big win for public schools.

The marijuana windfall first hit Vegas schools in 2019 when the state legislature passed a law to use tax funds once reserved for Nevada’s Rainy Day fund instead for education. Legal cannabis taxes added a whopping $159 million in the two years since then to some $100 million in legal weed taxes contributed to schools in the early days of adult-use. This year’s cut will be similar to last year’s, as the latest state figures show comparable tax proceeds in fiscal year 2022 through April.

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3. Multi-state operators dominate in Vegas. But there’s still room for independents.

The early days of adult-use cannabis sales in Las Vegas featured almost exclusively local owners. Then multistate operators — think Curaleaf, Green Thumb, Cresco, Verano, and Ascend — began taking over within a couple years.

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Out-of-town corporations now own the lion’s share of Sin City weed companies. But a handful of locals have remained at the helm of their original boutique stores.

Among them, Kema Ogden was the first Black woman to own a dispensary in Nevada when she opened Top Notch THC as a medical cannabis store back in 2015. A former fitness trainer, Ogden took Top Notch THC into adult-use in 2017 and has continued to operate the dispensary ever since. It’s one of the few marijuana stores located on Vegas’ urban east side, and serves mostly local residents.

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Former Nevada Assemblyman David Goldwater leads a small group of locals who own and operate Inyo, just a few blocks away from where the MSOs and Planet 13’s megastore battle for tourists around the Strip. Like Ogden, Goldwater and company opened in 2015. He estimates some 80% of his customers are Nevada residents.

4. Fighting the gaming industry is a losing endeavor

The sole reason Las Vegas hasn’t yet realized Segerblom’s “Amsterdam on Steroids” promise is because the gaming industry has fought tooth-and-nail to stop legal weed from encroaching on its territory.

The lucrative casino resorts want to stay in line with federal law, and they don’t want marijuana operators luring away their tourists. While a cannabis consumption lounge makes perfect sense to everyone else, gaming operators see it as a threat to their casino bars, restaurants, concert venues, and nightclubs. Tourism and gaming are by far the state’s largest industries, and that clout is reflected in their political donations. Just about every elected official on the state and local levels — including Gov. Steve Sisolak — is motivated to heed the industry’s demands.

The casino resorts helped stop Nevada cannabis lounge bills in 2017 and 2019 — the latter even after local officials in Vegas gave the green light to open shop. A state bill finally passed during last year’s legislature, but regulators still haven’t issued any permits for lounges to open anytime soon.

“You can never count gaming out,” said Frank Hawkins, owner of the Nevada Wellness Center dispensary in Las Vegas whose consumption lounge has been ready to open for more than three years. “Just when you think everything’s on track, they step in to shut it down.”

Nevada marijuana laws

5. Rule breakers gonna break rules; state regulators need the power to stop them

Among countless scandals and major rule violations in the past five years include the lead cannabis regulator scheming with an industry attorney to rig a contest for nearly half of Nevada’s current dispensary licenses, Eastern Europeans attempting to bribe political candidates in exchange for weed store permits, testing labs endlessly inflating THC levels to appease their grow house clients, and tax heads misplacing tens of millions of dollars in weed money.

Look, it’s Las Vegas. A certain amount of rule-bending and -breaking has always gone on here—and few states have as much experience regulating high-money industries as Nevada.

That said, the state’s young cannabis industry has hatched more than its share of creative schemes and legal complications. In the past five years we’ve seen the lead cannabis regulator scheming with an industry attorney to rig a contest for nearly half of Nevada’s current dispensary licenses; Eastern Europeans attempting to bribe political candidates in exchange for cannabis store licenses; testing labs endlessly inflating THC levels to appease their grow house clients; and tax heads misplacing tens of millions of dollars in cannabis excise tax receipts.

Federal legalization would certainly prevent much of the corruption and chaos. Until then, states are on their own to somehow convince modestly paid regulators and employees that legal shenanigans in this expanding lucrative industry don’t pay.

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Chris Kudialis
Chris Kudialis
Chris Kudialis is the media’s authority on cannabis in Nevada, and author of the 2024 book Weed and Loathing in Las Vegas. Chris began covering the beat as a reporter with the Review-Journal in 2015, then moved to the Las Vegas Sun before starting with Leafly.
View Chris Kudialis's articles
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