Nevada Casinos to Allow Marijuana Conventions

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Tuesday, March 27th, 2018 | Written by Shane Larson

Last Summer, Nevada made it legal to buy recreational marijuana from dispensaries around the state, providing the purchaser is 21 years or older , and holds a government-issued ID card.

While casinos are prohibited from participating or doing business with anybody in the marijuana industry, a resolution introduced by Nevada Gaming Commission Chairman Dr. Tony Alamo now allows its gaming licensees to host marijuana business conventions, opening up another potentially lucrative revenue stream for casinos. As Alamo laid out in his declaration at the beginning of the month that paved the way for marijuana conventions to take place inside Nevada’s casino resorts:

“The Committee recommends permitting licensees to host conventions, trade shows, or similar conferences that may be related to marijuana but whose focus is primarily on the fostering of business relationships between participants, exchange of knowledge related to the trade, and other trade or educational activities that do not facilitate the actual possession or consumption of marijuana.”

Lucrative Market

In 2016, the USA’s legal marijuana industry was worth $6.7 billion, up by 30 percent versus 2015, with sales now forecast to hit $30 billion by 2021. Highlighting the industry’s incredible potential, Nevada only legalized recreational marijuana in July of 2017, but the industry still generated an impressive $200 million last year, in the process producing tax revenues of around $30 million for state coffers.

Nevada has still a long way to go, however, before it catches up with Colorado’s market which recorded sales of $1.51 billion for medical and recreational marijuana in 2017, according to statistics released by the Colorado Department of Revenue. From that figure, $1.09 billion was spent on recreational marijuana and the remaining $416.52 million on its medical equivalent, with $247 million in taxes subsequently boosting state finances.

Private Consumption Only

While Nevada is just one of 46 states to have embraced the industry, both medical and recreational marijuana remains illegal under federal law, and considered a violation of the Controlled Substances Act, together with drugs such as heroin, LSD, and ecstasy. These days, however, the law is generally applied to just those persons who possess, grow, or sell large quantities of the substance.

Nevertheless, Nevada may have legalized marijuana, but in order to adhere to state and federal laws the drug can only be consumed in a private residence, meaning casino operators are not allowed to permit marijuana smoking at their venues, including at their convention spaces.

Conference Dollars

Conventions are a major driver of tourism in Nevada, and while the 42.2 million people who visited Las Vegas in 2017 was down on the previous year, convention attendance actually increased by 5.3 percent. Needless to say, conventions represent a significant revenue stream for casino hotels and resorts, with the latest move to allow marijuana conventions inside such venues receiving approval from Governor Brian Sandoval. Nevertheless, he was quick to allay the concerns of those who see the development as providing a perfect money laundering opportunity for criminals, with Sandoval stating that no gaming licensees would be allowed to participate in the marijuana industry.

Similarly, Nevada Gaming Commission Chairman Dr. Tony Alamo also pointed out that casinos would merely act as host sites for marijuana conventions, and that no cannabis would be permitted on site for either sale or consumption. According to Alamo, this will help uphold the reputation of the Nevada gaming industry, and ensure that the “gaming industry and the marijuana industry shall not meet.”

Money Laundering Dangers

While Alamo has tried to diffuse any concerns about state casinos being used as potential drug money laundering sites, one Nevadan who has expressed his concern over the development is Richard Tomasso, vice president of security and government affairs for Mesquite Gaming, who believes that it could attract the attention of federal prosecutors. Tomasso’s biggest worry is that casinos may become accessories to money laundering crimes if such conventions are permitted, stating:

“Hosting a convention for marijuana business at a casino actually provides the perfect venue for money laundering by those attending the convention.”

In addition, recommendations have been made that casino resorts should monitor any marijuana shows taking place carefully. Certain questions have also arisen about how to deal with any casino employees testing positive for marijuana use as this would be a clear example of gaming and marijuana crossing paths. However things may develop from here, though, Nevada is sure to treat its marijuana industry with extreme caution, and do its best not to pave the way for widespread pot use across the state.