What Are the Cannabis Licensing Requirements in Nevada? (April 2024)

Nevada has been at the forefront of cannabis legalization, offering both medical and adult-use marijuana programs. Since the legalization of medical marijuana in 2001 and the subsequent approval of adult-use marijuana in 2017, the state has developed a comprehensive regulatory framework. In this article, we'll explore the cannabis licensing requirements in Nevada, covering the key aspects of both medical and adult-use cannabis regulations, recent legislative changes, and what the future holds for the cannabis industry in the state.

Medical Marijuana in Nevada

Nevada's medical marijuana program is governed by Chapter 453A, known as the “Medical Use of Marijuana” in the Nevada Revised Statutes (Nev. Rev. Stat. §§ 453A.010 to 453A.810). To qualify for a medical marijuana prescription, a patient must have a “chronic or debilitating medical condition.” This encompasses a wide range of conditions, from cancer to severe nausea.

Key Restrictions for Adult-Use Marijuana:

• Users must be 21 years of age or older.
• Marijuana can only be purchased from licensed businesses in Nevada.
• Selling or providing marijuana to individuals under 21 years of age is illegal.
• Driving under the influence of marijuana is also illegal.

Medical Marijuana Licenses

For those interested in operating a medical marijuana establishment, licenses are available for various purposes, including independent testing laboratories, cultivation facilities, production facilities (for edibles and other products), and dispensaries. To obtain a license, applicants must submit a comprehensive application and pay the required fee. Additionally, applicants must demonstrate control of at least $250,000 in liquid assets to cover initial expenses and provide evidence of property ownership or permission to use the location for the proposed medical marijuana establishment. There is a limit on the number of licenses issued, based on county population.

Licensing Requirements

Nevada has a well-established regulatory framework for both medical and adult-use marijuana establishments. To navigate this complex landscape, it's crucial to understand the four primary types of medical marijuana establishments and the various requirements associated with them. In this article, we'll break down the different types of marijuana establishments in Nevada and delve into the licensing fees, application processes, and regulatory considerations.

The Four Types of Medical Marijuana Establishments

Nevada law recognizes four distinct types of medical marijuana establishments, each with specific activities permitted by their respective licenses:

• Medical Marijuana Dispensary

  • Allows the purchase of marijuana from licensed cultivation and edible facilities.
  • Dispensaries cannot source marijuana or marijuana-infused products from unauthorized out-of-state facilities.
  • Only dispensaries are authorized to make sales to individual patients and customers.
  • The number of dispensary licenses is limited by state law, and new licenses may only be issued if the law is amended.

• Medical Marijuana Cultivation Facility

  • Permits the cultivation of marijuana.
  • Cultivation facilities can acquire initial plants from authorized patients.
  • They can sell cultivated marijuana to production facilities and dispensaries after passing Nevada's rigorous testing procedures.
  • Subject to strict regulations regarding safety, security, and cleanliness.

• Medical Marijuana Production Facility

  • Allows the production of marijuana-infused products, including edibles and extracts.
  • Production facilities may only purchase marijuana cultivated at licensed facilities in Nevada.
  • They can sell their products to licensed dispensaries or other production facilities.
  • Stringently regulated to ensure product safety and security.

• Independent Testing Laboratory

  • Enables the testing of marijuana grown at licensed cultivation facilities or products produced at licensed production facilities.
  • Testing labs must maintain true independence, with no ownership ties to other marijuana licenses.
  • Ensures objective analysis of marijuana products' quality and safety.

Retail Marijuana Licenses

With the legalization of adult-use marijuana, Nevada introduced a separate set of licenses for retail or recreational marijuana establishments. While some facilities hold dual licenses for both medical and retail operations, these licenses are treated independently. The types of retail licenses include:

• Retail Marijuana Store

  • Permits the purchase of marijuana from licensed cultivation and edible facilities.
  • Similar to medical dispensaries, retail stores cannot source marijuana from unauthorized out-of-state facilities.
  • Authorized to make sales to individual customers.

• Retail Marijuana Cultivation Facility

  • Allows the cultivation of marijuana specifically for the adult-use market.
  • Similar to medical cultivation facilities, they must follow strict safety, security, and cleanliness regulations.

• Retail Marijuana Production Facility

  • Permits the production of marijuana-infused products for the adult-use market.
  • Subject to stringent regulations to ensure product safety and security.

• Independent Testing Laboratory (Retail)

  • Mirrors the role of independent testing laboratories for medical marijuana products, ensuring quality and safety.

Marijuana Distributor License

Nevada's recreational marijuana market operates on a three-tiered distribution system similar to alcohol regulation. All adult-use marijuana designated for sale must be transported by state-licensed marijuana distributors. However, this system has led to some challenges and legal disputes regarding distribution capacity and eligibility. Medical-only marijuana can still be delivered to other marijuana facilities by medical licensees.

Requirements for Opening a Marijuana Establishment

Becoming a licensed marijuana establishment in Nevada is subject to strict regulations, including:

• Control of $250,000 in liquid assets.
• No prior convictions for certain felonies or controlled substance distribution (with some exceptions).
• Submission of all relevant fees, which vary depending on the type of establishment.
• Location compliance: 1,000 feet from schools and 300 feet from community facilities.
• Ownership or written permission for the proposed property.
• Comprehensive background checks for all owners, officers, employees, and volunteers.
• Strict adherence to state and local ordinances, zoning, and signage regulations.
• A professional interior and discreet signage, consistent with traditional medical offices and pharmacies.
• One secure entrance per establishment, adhering to relevant fire codes.

Licensing Fees

Licensing fees are a significant consideration for opening a marijuana establishment in Nevada. These fees are in addition to any costs associated with forming and registering a business or corporation and local licensing fees. Here are some examples of licensing fees:

Medical Marijuana Dispensary:

• $5,000 nonrefundable application fee.
• $30,000 initial licensing fee.
• $5,000 annual renewal fee.

Retail Marijuana Store:

• $20,000 initial issuance fee ($6,600 for renewal).

Medical Marijuana Cultivation Facility:

• $5,000 nonrefundable application fee.
• $3,000 initial licensing fee.
• $1,000 annual renewal fee.

Retail Marijuana Cultivation Facility:

• $30,000 initial issuance fee ($10,000 for renewal).

These fees can vary depending on the specific type of establishment, and applicants must also cover the costs of processing applications and background checks.

Marijuana Support Businesses

In addition to marijuana establishment licenses, local governments may require marijuana support business licenses for entities that provide services to the cannabis industry. These support businesses include consultants, lighting companies, security firms, and staffing agencies.

Compliance Considerations

Marijuana establishments in Nevada are subject to strict regulations that mandate meticulous tracking of marijuana from seed to consumer. Security measures, including alarms and real-time monitoring systems, are essential for product safety and security. Violations of these regulations can result in the loss of licensure and, potentially, criminal prosecution. Consulting with an attorney is highly recommended to ensure full compliance with the complex regulatory framework.

Future of Cannabis Consumption Lounges

In June 2022, the Nevada Cannabis Compliance Board approved regulations for recreational cannabis consumption lounges. These lounges come in two categories: retail lounges, attached or adjacent to existing dispensaries, and independent lounges that stand alone and sell single-serving and ready-to-consume products. Initially, 20 new licenses will be issued for independent lounges, with the first 10 reserved for social equity applicants. Existing retailers will have access to 40 to 45 licenses for retail consumption lounges. Ownership groups are restricted to holding one consumption lounge license, encouraging broader participation in the industry.

Conclusion

Nevada's well-established cannabis programs, both medical and adult-use, offer various opportunities for individuals and businesses seeking to enter the cannabis market. The recent approval of regulations for cannabis consumption lounges represents a significant step forward, allowing for innovative cannabis-related concepts and businesses in the state. As the industry continues to evolve, Nevada remains an attractive destination for those looking to participate in the thriving cannabis sector.