As of April 1, 2014, Nevada law will permit a limited number of medical marijuana dispensaries to operate in the state. The law will also allow cultivation facilities, testing labs, and producers of edible marijuana products to operate in the state as well.
In this article our Nevada medical marijuana attorneys explain how to open and run medical marijuana dispensaries, cultivation facilities, and related businesses. The application procedures and operating rules are very strict. Breaking the law could result in civil and criminal prosecution.
Patients seeking information on how to obtain medical marijuana should refer to our article on Nevada medical marijuana laws.
1) Is it legal to sell medical marijuana in Nevada?
It will be as of April 1, 2014 under very limited circumstances. Starting then, the Nevada State Health Division may issue a limited amount of licenses to open dispensaries for the purpose of selling medical marijuana to registered medical marijuana cardholders.
Note that the state may also issue a limited amount of licenses to open other medical marijuana establishments besides dispensaries such as:
- cultivation facilities,
- businesses that produce edible medical marijuana products and marijuana-infused products (such as foodstuffs, extracts, oils, ointments, and tinctures), and
- independent testing labs for medical marijuana.1
2) How can people apply to open a medical marijuana establishment in Nevada?
The application processes for opening a dispensary, cultivation facility, edible marijuana production facility or testing lab are the same. The applicant obtains an application from the Nevada State Health Division. The application asks for the following information:
- The name of the prospective medical marijuana establishment
- The physical address of the prospective medical marijuana establishment as well as the address of any associated medical marijuana establishments
- Evidence that applicant controls at least $250,000 in liquid assets to pay for initial expenses and compliance
- Evidence that the applicant either owns the property or has permission to use the property for a medical marijuana establishment
- The names, addresses and dates of birth of each prospective owner, officer and board member
- Fingerprints of the medical marijuana establishment's prospective owners, officers and board members as well as their permission to submit to a FBI background check
- The names, addresses and dates of birth of each prospective employee
- Prospective operating procedures of the medical marijuana establishment regarding its safety, security, electronic verification system, and inventory control system
- Prospective operating procedures for selling or delivering marijuana (if applicable)
- A letter from the local government showing that the prospective medical marijuana establishment would be in compliance with local ordinances, land use rules and zoning rules
The Nevada State Health Division will respond to applications within 90 days. If accepted, the medical marijuana establishment will be issued a random 20-digit identification number. Registration certificates are good for one year and may be renewed.
Note that there are only 10 business days a year that the Nevada State Health Division accepts applications for medical marijuana establishments.
Also note that any medical marijuana establishment registration certificate is considered "provisional" until the establishment is in full compliance with local rules and has a business license.2
3) How does the government determine whether to grant a medical marijuana establishment registration certificate in Nevada?
The Nevada State Health Division looks at the following factors when deciding whether to allow a new medical marijuana facility to open:
- The applicant's financial resources,
- The previous business and non-profit experience of the prospective, owners, officers and board members,
- The education and expertise of the prospective owners, officers and board members,
- The convenience of the proposed location and its impact on the community
- The adequacy of the size of the proposed establishment,
- The proposed plan for the care, safekeeping and quality of the medical marijuana, and
- The amount of taxes paid and contributions made to Nevada (or its political subdivisions) by the prospective owners, officers and board members.3
4) How can people qualify to work at medical marijuana establishments in Nevada?
Owners, officers, board members, employees and volunteers all must receive an "agent registration card" from the Nevada State Health Division in order to work at a Nevada medical marijuana establishment. The application for the agent card asks for the following information:
- Name, address, date of birth, and social security number,
- A pledge not to give medical marijuana to anyone not legally allowed to have it, and
- Fingerprints and authorization to submit to an FBI background check,
In addition, prospective workers must fit all of the following requirements:
- The applicant is over 21 years old.
- The applicant is not in violation of a child support order, and
- The applicant has no past convictions for drug felonies or violent felonies. (Violent felonies involve the use, threatened use, or substantial risk of using force against the person or property of another.) Note that this does not include convictions for which the case was closed at least ten (10) years ago.
- The applicant never had a previous agent registration card revoked, and the applicant has never previously been an owner, officer or board member of a medical marijuana establishment that had its registration revoked.
If the applicant does not hear back within 30 days, he/she is considered to have a conditionally valid agent registration card until further notice. Agent registration cards are good for one year and may be renewed upon application and acceptance.
Note that if an employee or volunteer stops working at a medical marijuana establishment, the Nevada State Health Division must be notified within 10 days.
Also note that owners, officers and board members do not need to resubmit all their information in order to get an agent registration card as long as they already submitted their information in the original application to open a medical marijuana establishment.4
5) Can medical marijuana establishment registration certificates be sold or given to another business? How about medical marijuana establishment agent registration cards?
No, they are both non-transferable. Anyone looking to open a medical marijuana business has to apply for and receive its own unique registration certificate. And anyone interested in working at a medical marijuana business is required to apply for and receive his/her own unique agent registration card.5
6) Can medical marijuana establishments lose their registration certificates in Nevada?
Yes. Medical marijuana establishments can lose their registration certificates by disobeying the law. Usual grounds for revocation are:
- Providing medical marijuana to a person who is not legally eligible to have it, or
- Receiving medical marijuana from unlawful sources.
Note that all medical marijuana establishments are subject to inspections by Nevada State Health Division authorities at any time.
Also note that if a court orders a marijuana establishment to suspend its activities, the Nevada State Health Division must revoke its registration certificate within 30 days unless the Division receives a compliance notice first that the establishment fixed whatever was wrong.6
7) Can medical marijuana agents lose their registration cards in Nevada?
Yes. Medical marijuana agents such as owners, officers, board members, employees or volunteers may have their registration cards revoked at any time for not following the rules. Typical grounds for revocation are:
- Giving medical marijuana to someone not legally allowed to receive it,7 or
- Committing a felony drug crime or violent crime.8
8) How much does it cost to apply to open a medical marijuana establishment in Nevada?
The application fee is $5,000 plus processing costs. This is a one-time nonrefundable fee.9
9) After the application is accepted, how much does it cost for a registration certificate to open a medical marijuana establishment Nevada? How about renewal fees?
The Nevada State Health Division collects different registration and renewal fees depending on the type of medical marijuana facility:10
10) How much does it cost to get an agent registration card to work at a medical marijuana dispensary or other establishment?
The fee to obtain a medical marijuana agent registration card is $75. there is also a yearly $75 renewal fee.11
11) Do dispensaries pay taxes on medical marijuana in Nevada?
Yes. Nevada imposes a two percent (2%) excise tax on each wholesale or retail sale of marijuana and marijuana products. This tax applies regardless of whether the purchaser is a medical marijuana establishment or a patient cardholder.
Note that this two percent excise tax is in addition to any applicable state, local and use taxes.12 Las Vegas medical marijuana attorney Michael Becker gives an example:
Example: John owns a dispensary in Reno and orders a batch of marijuana brownies from a Henderson edible marijuana production facility for $100. But in addition, John would also have to pay a state sales tax (8.1% in Reno), which would come to $8.10 ($100 x .081). Finally, John would also pay the medical marijuana excise tax of 2%, which would come to $2.00 ($100 x .02).
Therefore the total price John would have to pay would be $110.10 ($100 base price + $8.10 sales tax + $2.00 medical marijuana excise tax).
12) How many medical marijuana establishments are allowed in Nevada?
Regarding medical marijuana dispensaries, there are a limited number of registration certificates that the Nevada State Health Division allots per county:
Note that there cannot be more than 1 dispensary per every 10 pharmacies in a county. However each county is permitted at least 1 dispensary even if there are less than 10 pharmacies. And in counties of 100,000 or more, there cannot be more than 25% of available dispensaries in any one locality unless local need dictates otherwise.
Also note that in counties of 100,000 people or more, no one person can have more than one medical marijuana establishment registration certificate or 10 of the county's available registration certificates (whichever is greater).
The Nevada State Health Division still has yet to determine how many other types of medical marijuana establishments are allowed per county.13
13) Can Nevada medical marijuana establishments sell marijuana to anyone?
No. Nevada medical marijuana establishments have a very limited legal customer base:14
14) Can dispensaries sell to all card-holding medical marijuana patients in Nevada?
No. Each medical marijuana patient cardholder specifies only one dispensary to buy from. In other words, each patient is matched with one dispensary. But note that patients may change designated dispensaries once within a thirty-day period.15
15) Can Nevada dispensaries sell medical marijuana to non-Nevada residents?
Sometimes. Nevada dispensaries may sell medical marijuana to out-of-state residents if all of the following conditions are met:
- The non-resident has a valid, non-expired medical marijuana card from his/her home state, and
- The non-resident's home state exempts cardholders from criminal prosecution for medical marijuana use, and
- The law of the non-resident's home state requires that physicians advise patients that medical marijuana use may help their symptoms as a precondition to the state issuing patients a medical marijuana card, and
- The non-resident's home state maintains a database through which Nevada authorities may verify his/her card's validity. (NRS 372A)
Nevada medical marijuana dispensaries may not sell a non-resident more medical marijuana than legally allowed in Nevada. This rule holds even if the patient's home state permits patients to possess greater quantities of medical marijuana than Nevada does.16
16) What requirements must medical marijuana establishments abide by in Nevada?
All medical marijuana establishments must adhere to the following rules:
- The medical marijuana must be stored in enclosed, locked facility that is accessible only by agents of the establishment and repairmen that they allow inside.
- The medical marijuana must be stored in a secure, locked device, display case, cabinet or room within the enclosed locked facility. They must be protected by a lock that meets security ratings established by Underwriters Laboratories for Key locks.
- Only a medical marijuana establishment registered agent employed by or volunteering at the facility may remove the marijuana and only for the purpose of dispensing it; furthermore, they may not remove it until immediately before it is dispensed.
- The establishment must maintain an inventory control system approved by the Nevada State Health Division that records the chain of custody of the marijuana from seed to sale including names, dates, quantities and potency. The medical marijuana patient cardholders' names should remain encrypted and private.
- The establishment also must maintain an electronic verification system approved by the Nevada State Health Division that records all the names and card information of the medical marijuana patients who purchased from it within the last 60 days. It must also include the names and card information of agents and volunteers who work there. (Note that Nevada medical marijuana establishments may share this information with each other, and the information must be accessible to the Nevada State Health Division.)17
- The medical marijuana establishment must be located in a commercial or industrial zone or overlay.
- The medical marijuana establishment also must be located in its own separate building or facility.
- The medical marijuana establishment must comply with local rules regarding land use, zoning, and signage.
- The exterior must be professional and traditional of medical establishments. And the signage must be discreet.18
In addition, dispensaries and production facilities of edible marijuana product and marijuana-infused products must adhere to the following rules:
- The marijuana must be clearly and unambiguously labeled as medical marijuana.
- The marijuana must not be packaged in a way that is appealing to children.
- The marijuana must be regulated and sold on the basis of THC (delta-9-tetrahydrocannabinol) concentration and not by weight.
- The marijuana must be labeled so as to allow tracking by the establishment's inventory control system.19
Finally, medical marijuana dispensaries specifically must follow these rules as well:
- All marijuana products must show the weight, concentration and content of THC in clear and accurate labels.
- Dispensaries cannot sell a customer more than two and one-half ounces of medical marijuana within a fourteen-day period.
- The dispensary must post a sign stating the legal limits of medical marijuana.
- The dispensary must have a single entrance for patrons.20
17) Are there places where medical marijuana establishments may not exist in Nevada?
Medical marijuana establishments cannot be within 1,000 feet of a public or private school (pre-K through 12thth grade). They also cannot be within 300 feet of a:
- day care,
- public park,
- public pool,
- a religious building, or
- a recreation facility for kids or teens.21
18) Can someone own different types of medical marijuana establishments at the same time?
Yes. One business may include dispensaries, cultivation facilities, and/or facilities that make edible marijuana products or marijuana-infused products. The one exception is independent testing facilities-they may not be co-owned with other medical marijuana establishments. This rule is meant to ensure that they remain impartial.22
19) Can people use medical marijuana at dispensaries in Nevada?
No. Nobody may use or consume pot on the premises of any medical marijuana establishment in Nevada. This goes for employees, patients, and anyone else.23
20) May dispensaries buy unused pot from patients in Nevada?
Medical marijuana patients (or their registered designated caregiver) may sell unused pot to dispensaries one time. (This would typically occur when the patient's medical marijuana card expires, and he/she has leftover pot.)
Otherwise, patients (or their caregiver) may give unused pot to dispensaries for no money.24
21) May cultivation facilities buy unused pot plants from patients in Nevada?
Medical marijuana patients (or their registered designated caregiver) are allowed to sell unused pot plants to cultivation facilities one time. (This would usually happen when the patient leaves the medical marijuana program, and he/she still has plants leftover.)
After that, patients (or their caregiver) may donate unused pot to dispensaries as long as they receive no money in return.25
22) What is the purpose of medical marijuana independent testing laboratories in Nevada?
Independent testing labs report on the quality, potency and content of the marijuana products sold at licensed Nevada dispensaries. Specifically, independent testing labs test for:
- Concentration of THC and cannabidiol in marijuana,
- Whether the material is organic or non-organic,
- The presence and identification of molds and fungus, and
- The presence and identification of fertilizers and other nutrients.26
23) what is the penalty for breaking laws related to Nevada medical marijuana establishments?
It depends on the circumstances of the incident:
At a civil and administrative level, the state may revoke the establishment's registration certificate or the workers' agent registration cards and impose hefty fines.27
At a criminal level, workers may face such charges as marijuana possession, possession with intent to sell, selling, or even trafficking. Penalties range from small fines and no jail to large fines and several years in prison. For more information see our articles on:
- Nevada crime of marijuana possession
- Nevada crime of marijuana possession with intent to sell
- Nevada crime of selling marijuana (or doing other unauthorized acts such as growing or transporting)
- Nevada crime of trafficking marijuana
24) Does federal law outlaw medical marijuana?
Yes, though it is not a high priority for the government to raid dispensaries.
25) Can medical marijuana patients grown their own marijuana?
Under certain circumstances. See our page on the Nevada crime of growing marijuana.
Interested in opening a dispensary in Nevada? Call an attorney....
If you would like to open a medical marijuana dispensary or other establishment in Nevada, call our Las Vegas criminal defense attorneys at 702-DEFENSE (702-333-3673) for a consultation. We can guide you through the application process as well as maintenance of your business so it always adheres to Nevada law.
We represent clients throughout Nevada, including Las Vegas, Henderson, Clark County, Washoe County, Reno, Carson City, Laughlin, Mesquite, Bunkerville, Moapa, Elko, Pahrump, Searchlight and Tonopah.
For information on how to open a medical marijuana dispensary in California, read our article on how to open a medical marijuana dispensary in California.