Marijuana In Nevada: An Inevitable Change with Inevitable Benefits.

-Tyler J. Morgan, Esq. 

This past November marked the beginning of the medical marijuana craze in Nevada when state and local officials awarded licenses for dispensaries, cultivators and production facilities. Although a select few licenses were granted throughout the state, the vast majority of those licenses were issued to businesses with plans to operate medical marijuana establishments in Las Vegas. What does this mean for the future of Las Vegas? Potentially, exorbitant amounts of tax revenues, increased employment and spikes in tourism if we just look at some of the other states with existing medical and recreational laws in place. Unfortunately, there is still a cloud over the future of the industry as the federal government still prohibits marijuana use.

Marijuana Legalization: Federal & State Positions:

Although marijuana is still prohibited under federal law, states are realizing the economic benefits of its legalization and are rapidly changing their laws contrary to federal opinion. Today, twenty-three states and the District of Columbia have medical marijuana programs allowing individuals to purchase marijuana with a doctor’s recommendation. More states are expected to follow. In 2016, as many as ten states will consider following in the footsteps of Colorado, Washington, Oregon and Alaska in seeking full legalization; Arizona, California, Delaware, Hawaii, Maine, Maryland, Massachusetts, Montana, Nevada, New York, Rhode Island and Vermont. One would certainly think if more and more states adopt legislation allowing for recreational use of marijuana then the federal government will have no choice but to adjust its stance. This is likely the case, but how the federal government will adjust its stance and when are the major looming questions throughout the industry.

The federal government is currently remaining uninvolved with state medicalization and legalization. Many proponents of marijuana use are hopeful of full federal decriminalization in the near future, but whether or not that happens is dependent on several factors such as who the next president will be in 2017, and whether that president is in favor of change or in the alternative orders the attorney general to enforce the current law. Realistically, it would likely be political suicide if a president decides to make a bold stance and demand strict enforcement of the law seeing as the vast majority of Americans are in favor of full legalization – current Gallup polls have nearly 60% of Americans in favor of legalization. So, it appears that change is inevitably on its way but now the question of how is still a bit cloudy.

The federal government really has two likely options: national medicalization through changes in the Controlled Substance Act or just removing it altogether from federally regulation and allowing the states to individually regulate it as they see fit. Marijuana is presently listed as a Schedule I substance under the Controlled Substance Act. Thus, marijuana is in the same class as other drugs such as heroine and LSD that have “a high potential for abuse […] no currently accepted medical use in treatment in the United States […] [and] a lack of accepted safety for use.” Seeing as the vast majority of Americans don’t believe marijuana should be classified in such a harsh category; the likeliest action for the federal government to take would be to simply shift towards medicalization and just downgrade it to Schedule II. Under Schedule II, marijuana would be recognized as still having “a high potential for abuse,” but would be recognized as having an “accepted medical use in treatment” thereby allowing doctors to prescribe it. This change would still keep regulations on its use, but would allow for the medical community to more easily conduct research on it and begin using it for treatment of conditions it has been proven successful – seizures, chronic pain, Crohn’s disease, nausea from chemotherapy, stress, Alzheimer’s and multiple sclerosis.

Medicalization by the federal government appears to be the most feasible option and is really just a form of “back-door legalization.” Alternatively, The federal government could scratch marijuana from the Controlled Substance Act altogether and just let the states rule however they choose over its use and availability. The federal government could still impose “sin taxes” as they do with alcohol to increase tax revenues. What the federal government will do is completely unknown at this point, however, at the end of the day medicalization and legalization are still a better options than prohibition.

The Economic Impact of Legalization:

Current estimates project tremendous growth in the marijuana industry and legalization could make it one of the largest industries in the country. A report by Greenwave Advisors, a financial advisory group for the marijuana industry, projects revenues of $35 billion by 2020, if full federally legalization is accomplished. Even without full legalization, Greenwave has set projections at $21 billion.

These numbers may seem overly high to some, but Colorado alone has seen over $45 million in tax revenues in 2013, from its local marijuana industry. So much tax revenue that the state has actually considered refunding some of it! Estimates from Arcview Market Research, a research firm for the cannabis industry since 2011, project first year retail sales in Oregon alone of nearly $200 million. With these types of statistics it’s no wonder why so many states are moving toward legalization of marijuana.

Las Vegas holds an inherent advantage in the marijuana industry: tourism. The Las Vegas Strip was the most visited tourist attraction in the world last year attracting nearly 40 million tourists. Nevada legislature recognizes this advantage and wrote the marijuana laws to recognize full reciprocity meaning people with medical marijuana cards from other states will be able to buy marijuana in Nevada without having to get a new prescription or card. Individuals will only need to sign an affidavit when they enter their first dispensary and stick with that dispensary, exclusively for at least one month. This means a visitor from another state doesn’t have to worry about boarding a plane with marijuana – transporting marijuana across state lines is still prohibited and heavily enforced by TSA. Instead, upon landing in Las Vegas that person can just go pick up enough marijuana for their stay from a local dispensary here in town. The inherent benefit of this is getting more people to purchase marijuana here locally to help drive up revenues for the city and state. Some businesses holding marijuana dispensary licenses in Las Vegas are already making plans to offer shuttle services for visitors to get to and from dispensaries when staying in hotels on the strip. In the end, marijuana could bring more revenues to Las Vegas, as well as create new job opportunities within the industry on both the retail and medical research sides. If Nevada can one day bring in revenues similar to Colorado or Oregon then we will most definitely see a boom in the economy. A boom that will allow us to shift more funding towards important needs such as education and drug abuse programs.