On Fremont Street or the Strip, you might be confused because there are businesses that appear to be cannabis dispensaries.
The fact is, real dispensaries are illegal near casinos.
So what are they? They aren’t cannabis dispensaries. Instead, they sell CBD and hemp products, which can look like real cannabis to customers, but they don’t induce the same effect as real cannabis. And some of the edible products may be synthetic cannabis in disguise.
It’s gotten to the point that the City of Las Vegas now forces those businesses to post signs saying they don’t sell cannabis. And the Nevada Legislature had to prohibit the sale of synthetic cannabis, which is legal in some other states, and also looks just like the real thing.
So how are they still in business?
CBD, unlike its psychoactive sister, THC, doesn’t require regulation, which is why it’s sold in offbeat places like gas stations. And thanks to a 2018 federal farming law, hemp also can be sold anywhere sans regulation. It’s not only the reason these products can be freely sold anywhere, it’s also why the psychoactive synthetic cannabis compound Delta-8, which can be made from CBD and hemp, is catching on, especially in places where recreational marijuana is illegal. However, experts say the chemicals needed to synthesize the compound to make products like edibles may be harmful.
“I see it as like a hot dog,” says Benjamin Adams, staff writer for cannabis-lifestyle website High Times. “It gets you by. But if people knew how it was made, they probably wouldn’t consume it.”
Layke Martin, executive director for the Nevada Cannabis Association industry advocacy group, shares Adams’ concerns about CDB/hemp-derived products -- and , by extension, these tourist-reliant shops that sell various forms of them.
“As a state, we should be concerned about these products because it's inconsistent with the legal system -- the well-regulated, tested, tracked and taxed licensed cannabis industry,” says Martin. “And then we should be concerned for public safety. We don't know what's in these products. … It's created by mixing chemicals with hemp products to create psychoactive products to create intoxicating products. And so it's totally unregulated. … And also, there's no restrictions on how these are marketed and packaged. So in the licensed market, you can't have packaging that looks like candy. You can't have packaging that looks like snacks or fruit, or looks like it's marketed toward children. In this unregulated Delta-8-type world, none of those restrictions exist.”
In other news, progress continues, albeit solely, for consumption lounges. Regulations set last year by both the state and municipal governments suggested the first non-tribal lounges could open this year. But none have done so yet.
Martin says one reason is some license holders are waiting to see what happens when the first ones open. But there’s another issue: money.
“It is very difficult to get financing for businesses in the cannabis industry,” says Martin. “You can't get regular loans from your regular bank. And so that restricts the amount of capital that's available, making it very challenging for any new or existing business to expand. And so that has hindered the growth of a lot of cannabis businesses, including lounges.”
Adams says that lounges that opened in the Los Angeles area have seen mixed success, mainly because locals haven’t fully supported them yet. “These lounges, they require you to make a purchase,” he says. “And when you combine local and state taxes, it can rise to over 30%. And so the locals aren't going to the lounges because they know where to get it cheaper. But these lounges are primarily catering to tourists. Obviously, I can see how that might play out in Las Vegas, which relies even more on tourism.”
Guests: Benjamin Adams, staff writer, High Times; Layke Martin, executive director, Nevada Cannabis Association
