News - May 14, 2021 - by Ray Hagar

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A leading lawmaker in the Nevada Legislature said on Nevada Newsmakers that the state's cannabis industry needs help in cracking down on black-market marijuana sales.

Assemblyman Steve Yeager, D-Las Vegas and the chair of the Judiciary Committee, said the lack of attention on the lucrative illegal marijuana industry has to do with manpower and priorities.

"What we can do with the Cannabis Compliance Board is to step up the enforcement of that," Yeager told host Sam Shad.

"I think there has just been a lack of enforcement on the illegal side," Yeager said. "And rightfully so. When we have limited resources, it is probably not the No. 1 issue. But I think it is important that the Cannabis Compliance Board should really get into that space and make sure we are trying to crack down on those (black market dealers)."

The black market in marijuana produces almost $20 million in tax-free revenue in Southern Nevada, Josh Garber, detective for the Las Vegas Metro Police Department, told the Nevada Current earlier this year.

In 2020, Las Vegas Metro busted just 17 illegal growing operations, down from 111 in 2013, the Current reported.

The reduction in growing-operation arrests was down mainly because Las Vegas Metro does not still have a full-time team focused on marijuana enforcement, Garber told the Current.

Total cannabis wholesale and retail tax collections by the state for fiscal year 2000 was $105.8 million, up from $99 million in 2019, according to state treasury documents.

"I'm a little surprised that the numbers are where they are," Yeager said, adding black-market marijuana also may pose a health risk.

"And not just on the revenue side," he said. "You don't know what you are getting in that market. And at least with our products in this state, they have been tested and if there is an issue, they will be pulled off the shelf."

The issue of Nevada's cannabis enforcement came up in a discussion of Yeager's bill in the Legislature to legalize marijuana consumption lounges. Recreational marijuana is legal in Nevada but tourists have no legal place to consume it because state law stipulates it can only be consumed inside residential homes. Nevada's tourism industry frowns on guests smoking marijuana in hotel rooms. A similar bill was not approved in the 2019 Legislature.

If the consumption lounges are allowed, the Cannabis Compliance Board would need about $3 million to fund about 30 new officers to regulate the lounges, according to the Nevada Independent.

"The bill is in the Ways and Means right now because there's fiscal notes attached to it and these are legitimate fiscal notes because the Cannibals Compliance Board is going to need to ramp up their staffing," Yeager said. "The attorney general is going to ramp up staffing to advise the Cannabis Board. So I'm hopeful."

The bill, however, is squeezed for time since the final weeks of the 2021 Legislature are ticking away and lawmakers still must approve major budgets to keep the state running, Yeager said.

"So what we are seeing now is that they are getting all of the budgets out of the way," he said of fellow lawmakers. "They are working on the education budget and I think once those budgets start to fall, I'm very hopeful we'll get a hearing out of Ways and Means and I am hopeful the Senate will see it the same we do because it is well beyond time for this to happen."

Because of the fiscal note, the bill will need a two-thirds majority for approval, according to the Nevada Independent. Some Republicans may oppose pot lounges because they fear people driving after consuming cannabis products, according to the Independent.

"So the bill is in a very nice place but it is just sort of sitting there, waiting for a couple of dominoes to fall first," Yeager said.

"I'm leaning on chair (Maggie) Carlton on Ways and Means Committee to help me through that process on how we can satisfy those fiscal notes because I think this is really going to be a benefit to the state, not just on the revenue side but also on the social side," Yeager said.

Although the bill allows the cannabis lounges statewide, local county and municipal governments will have the final decision on allowing them inside their geographical boundaries, Yeager said.

"If the bill passes, it does allow them statewide," he said. "But it is going to be up to the local governing body to decide whether to have them, particularly county commissions.

"So if we are being realistic about it, I think you would look at where dispensaries are currently located in the state and those are probably the places where they are going to have consumption lounges, if they so choose," Yeager said.

"So you think about Washoe County, Clark County, some in Elko County, up in Wendover," he said. "They have a dispensary there (Wendover), too. So it will (hinge) of the local ability to decide if they want them or not."

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