The iconic sign that greets visitors to Las Vegas. (Ryan Jerz, courtesy of TravelNevada)

“Amsterdam on steroids”: Las Vegas dreams big in new era of legal marijuana

LAS VEGAS — The crowd shouted, “Freedom!” as a local politician made Nevada’s first recreational marijuana purchase, his eyes glassy with tears of joy.

State Sen. Tick Segerblom, whose decade-long advocacy for marijuana legalization inspired a local medical strain named “Segerblom Haze,” purchased his flower at Reef Las Vegas dispensary and then addressed the assembled media.

“This is the entertainment capital of the world. It’s a perfect complement to what we do,” he said. “We’re going to be like Amsterdam on steroids.”

Nevada launched recreational marijuana sales on Saturday, July 1, and as it often does in Las Vegas, the party started at midnight. While Reef budtenders in “Day 1” hats served their first customers, an estimated 500 people waited outside for their chance to buy bud. Green fireworks sprouted from the rooftop, music thumped and food trucks selling fried chicken and chocolate cookies hummed by the curb. Twirling spotlights beaconed cabs, ride-shares and party buses arriving from The Strip.

As the weekend stretched towards Independence Day, dispensaries across the city saw lines snake out waiting room doors around buildings and into parking lots. With temperatures reaching 110 degrees, some shops set up tents, fans and water misters so customers wouldn’t pass out from heat exhaustion before they reached the front door.

By the close of business on July 4, the state’s dispensaries had racked up $3 million in sales revenue and about $500,000 in tax revenue from recreational marijuana sales, according to the Nevada Dispensary Association. At this pace, the industry group reckons that the state could realize an estimated $30 million in marijuana sales revenue over the next six months.

Nevada officials estimate tourists — more than 42 million viva Las Vegas every year — will make up 63 percent of recreational pot sales.

Even when medical marijuana cards were required to purchase pot, The Grove, a dispensary situated near the airport and The Strip, saw 80 percent of its business come from out-of-town visitors, said owner Demitri Kouretas. Now, he expects an even larger share of customers to be tourists.

“Vegas already has its sins — your liquor, your gaming — now we can add legalized cannabis to the equation,” Kouretas said. “We’re the most regulated state in the country, so we understand how to run these types of businesses — and we’ll do it well.”

Outside of Pisos, a dispensary near the University of Nevada, Las Vegas campus, a line of diverse cannabis consumers included off-duty casino limo driver Shawn Shaemaker. He said many of his clients have been asking when and how they can legally buy marijuana.

“I’ve already driven people with (medical marijuana) cards to dispensaries, so I know it will be big,” he said. “There’s no reason they shouldn’t (consume marijuana) here of all places — they allow people to drink. Hopefully it cuts down on that, because that can’t be any worse.”

Sin City’s stature as a global vacation destination could also translate to an outsized influence on future legalization efforts, said Scott Rutledge, who managed the 2016 campaign in support of Ballot Question 2 legalizing the use and possession of up to one ounce of marijuana flower or up to one-eighth ounce of concentrates.

“A lot of these people have been coming to Vegas for years for conventions or conferences, and now they have a chance to purchase legal cannabis,” he said. “It might not be the reason they come here, but it’s one of the things they’ll be able to do, and I think that will help change people’s hearts and minds about cannabis.”

Nevada voters legalized medical marijuana in 2000, but the state legislature didn’t pass a law allowing for dispensaries until 2013. Of the state’s 66 medical marijuana dispensaries, 44 applied for and received recreational licenses. In preparation for a larger customer base, many of those stores stockpiled inventories to last for as long as two months of recreational sales. But based on the first holiday weekend of sales, demand may exceed their expectations.

“One place I talked to was selling like $5,000 an hour,” Segerblom said. “At that rate they’re going to burn through whatever they have in a couple weeks,” he said.

Due to a quirk in the way the ballot question was written, only alcohol distributors can be licensed to transport cannabis from cultivation facilities to retail shops — the language was included to ensure that taxes aren’t evaded. Now, cannabis companies that grow and sell pot in the same building need a third party to move product from the back-end to the storefront. Nevada cannabis companies are battling the alcohol industry in court to revise the law, but as it stands, the current system will complicate dispensary efforts restock inventory.

Ironically, the zone most hostile to cannabis use in Las Vegas is the one famously associated with tourists, parties and consumption. Strip resorts donated millions to Super PACs denouncing cannabis legalization in the run-up to last year’s election. The Nevada Gaming Commission has warned casinos that they risk losing their gambling licenses if they allow marijuana use on their properties since that would violate federal law. Marijuana use is banned in all resort-casinos, and in any case there are currently no state regulations in place allowing for cannabis consumption inside any business.

That leaves tourists without a place to legally consume cannabis. They could face a $600 fine if caught smoking on a sidewalk or other public place.

“We have to figure that out,” Segerblom said. “It’s what Millennials want, and that’s who we’re trying to attract.”

Segerblom, a Democrat in his second state senate term, sponsored a “marijuana lounge bill” in the last legislative session that would have allowed city and county governments to issue cannabis smoking permits for businesses and events, but it failed to garner enough support to pass. He envisions marijuana nightclubs adjacent to casinos; cafes attached to dispensaries; permits for concert venues, parks and hotels; and even a dedicated street for cannabis businesses.

“One thing about Vegas: If there’s a demand we’ll figure out how to do it,” he said.

Dan Hernandez is a journalist based in Las Vegas. His work has appeared in the Guardian, the New York Times, Vice, and other publications. Follow him on Twitter @danielgene.