Nevada launched its application window for new marijuana consumption lounges on Friday, more than a year after state lawmakers approved a new business model for lounges that allows direct cannabis sales to consumers, akin to bars, instead of forcing them to bring their own cannabis.
The application window will remain open only until Oct. 27 at 5 p.m., according to a news release from the Nevada Cannabis Compliance Board (CCB).
As of Friday morning, there was a “statewide IT outage,” the CCB wrote on Twitter, but currently there are no plans to extend the application window. Stakeholders can still file lounge applications through the Accela portal online.
The state expects to issue 60-65 lounge permits, with 20 reserved for independent operators. Of those 20, 10 permits are being set aside for qualifying social equity applicants. The other 40-45 will go to existing licensed retailers.
While all licensed retailers in the state are eligible for lounge permits, there’s a limit of one per business entity, CCB spokeswoman Tiana Bohner said, and many of the 102 operational dispensaries in the state have the same owners.
There’s already at least one operational lounge in Nevada: The Las Vegas Paiute tribe’s NuWu Cannabis Marketplace, which has featured a “tasting room” since 2019, and is exempt from state law as a Native American tribe.
It’s also not clear yet if all the eligible retailers will apply, Bohner said, which is why the state estimates 40-45 will eventually open for business.
The application fees also are not inexpensive. For already-licensed companies, the lounge application fee is $100,000, while for independent entrepreneurs the cost will be $10,000, and for social equity applicants the fee will be $2,500.
Bohner said more resources for hopeful applicants can be found at the CCB’s YouTube channel.
The new permit has the potential to transform the Nevada cannabis landscape even further, particularly given how tourism-heavy the state is, said Brandon Wiegand, president of the Nevada Cannabis Association and COO at Thrive Cannabis Marketplace. Wiegand said his company will be one of those applying for a lounge permit.
“I’m excited to see Nevada leading the pack again,” Wiegand said. “What will this look like? Remains to be seen. But the framework around consumption lounges was very loose, and that was by design.”
Wiegand said the regulatory framework allows businesses to be “creative” with how they choose to appeal to visitors.
“It could look like music venues, it could look like yoga, it could look like puff and paint,” he said. “However you want to think about it. It could be fine dining. We’re excited to see what kind of new licenses pop up.”
There are also still plenty of questions about the lounge business model and how competitive that landscape will be, however. Wiegand said he believes there are a number of licensed retailers that will stick with their existing business models.
But the bottom line, Wiegand said, is that Nevada is closing a major loophole by creating the lounges, by giving tourists a legal place to consume cannabis, since consumption is still banned by nearly all places where tourists can stay while they visit.
“It’s an exciting and important milestone in what’s been a really long process,” Wiegand said.