On April 19, the Assembly Committee on Judiciary recommended passage of Assembly Bill 341, which would allow and regulate cannabis consumption lounges in Nevada. The bill has been exempted from legislative deadlines and contains something you don’t see everyday in a piece of legislation—guidelines for inclusion and social equity. The most notable: A first-time license for a cannabis lounge will cost up to $20,000, but a “social equity applicant,” can receive a discount of up to 75 percent.
So, how did it come to be that a new law will aim to help diversify the industry it regulates?
“I think that really has to do with the fact that, until recently, this was a criminal activity,” Assemblyman Steve Yeager, the bill’s primary sponsor, told the Ally.
“Years ago, I was a public defender in Las Vegas,” Yeager said. “The amount of clients I would see getting arrested and cited for possession of small amounts of marijuana—it was disturbing to see that. … The studies showed the consumption use was pretty much the same regardless of where you live or your demographic, but [the laws] were just enforced very unfairly.”
Before widespread legality, according to the FBI’s Uniform Crime Report data, Black people were arrested at three times the rate of white people for cannabis use, nationwide. The disparity in arrest rates has continued in states where adult use is still prohibited.
Thinking through how to regulate a new branch of the industry
The process of designing AB 341 began two years ago.
“A few of us traveled out to San Francisco to look at their consumption lounge model because we were thinking about trying to do something potentially in the 2019 session about it,” Yeager said. The group included state senators, assembly members, and commissioners, among them Clark County Commissioner Tick Segerblom, who had led the initial charge to legalize cannabis in the state.
Yeager recalled that, at first, “We all kind of agreed that the easiest way to do a consumption lounge would just be to allow existing dispensaries to open them.”
But there was a problem with that.
“One of the criticisms of the industry, at least in Nevada, was that it really lacked diversity,” Yeager said. “The barriers to entry to get in initially were so high that it mainly was just wealthy people and mostly white people who were the current owners of the dispensaries.”
A survey of Nevada’s 232 cannabis entities, published by the state’s Cannabis Compliance Board in January, makes the exact same observation.
“In thinking about this bill, we thought, ‘Well, how can we do this in a way that recognizes the investment that the existing players of ours made, because that’s obviously important, but also opens up the door for so-called social equity applicants” Yeager said.
While the bill text defines a “social equity applicant” as one who’s been adversely affected by previous laws criminalizing cannabis, Yeager is in favor of applying a broad reading to that definition, including not only people who have been disproportionately arrested, but also communities that have been over-policed.
A Southern Nevada activist has been bringing the issue to light for years
One of the state’s most vocal critics of the cannabis industry’s lack of diversity over the years has been A’Esha Goins.
“I don’t want to work for THE ONLY African American dispensary in Nevada,” she blogged in 2015, when she was assistant manager at Nevada Wellness Center in Las Vegas, the rare Nevada dispensary whose owners and board are almost exclusively Black. (The top name on the staff page is Frank Hawkins, former NFL running back and former president of NAACP Las Vegas.)
“I want to be part of a network of African American dispensary owners in Nevada,” Goins wrote. Since then, she’s founded two organizations that promote public policies to address the damage done to people and communities of color by the War on Drugs—Black Joy Consulting and the Cannabis Equity and Inclusion Community.
“I worked hard with the sponsors of [the new cannabis lounge] bill to draft the language as close to equity—offering an opportunity for those social equity applicants as I could—and they didn’t turn anything down that I asked,” Goins told the Ally in a phone interview.
In 2015, Ally editor Brian Bahouth visited Cheryl and David Fanelli, owner/operators of Club Ned, a cannabis consumption lounge in Nederland, Colorado.
Music heard in this report was on a radio during recording. Excerpts added for continuity and reported through the Public Radio Exchange.
Goins is still concerned, however, that even with a deep discount, breaking into the industry can still be prohibitively expensive. “[The] licensing fees, they’re going to reduce by 75%, which is awesome,” Goins said. “That person will still need to have money in reserves to be able to be considered”—enough money to run a business for a year, she said.
She’s been working on a solution. It’s a pop-up portable cannabis vendor bill that would allow entrepreneurs without a brick-and-mortar location to sell small amounts of cannabis at events. The bill is AB 322. Assembly members C.H. Miller, Cecelia González, and Edgar Flores introduced it to the legislature in March.
Nationwide, there are already a few precedents for cannabis microbusinesses. New Mexico is considering a law that would offer growers with 200 or fewer mature plants a low licensing fee of $1,000 to $2,500. And Goins said that California and Illinois have effective microbusiness models for sellers.
For aspiring applicants, now’s the time to get your ducks in a row
It’ll be a while before all of the details are worked out and the first consumption lounge opens its doors, but with lounges on the horizon and pop-up microbusinesses possibly to follow, Assemblyman Yeager offered his advice for potential social equity applicants: “You need to collect as much documentation as you have that might show that you were somehow personally affected. … And you can put in your own words, in a couple of pages, how you believe you’ve been adversely impacted and why you’re a social equity applicant. I would encourage them to start putting this stuff together now.”
Kris Vagner is editor of arts magazine Double Scoop and a regular contributor to the Ally. Support her work.