Nevada
General
Oct 2022
3 min

Nevada Cannabis Consumption Lounge Rules Summary

Did you know that even though it's legal to purchase cannabis in dispensaries in Vegas, that it is illegal for consumers to actually consume their products anywhere other than in private residences or properties? Crazy. Now, with the passage of the social consumption lounge regulations, consumers will soon have places to consume their products safely and legally. The exciting thing is that this has never been done before in Nevada and seeing what concepts new cannabis lounges come up with will be half the fun. There is a limited number of licenses available and a lot of rules about who gets the licenses, how to get a license, and how to open and operate the lounges. Here, we've outlined and summarized the Nevada cannabis consumption lounge regulations so you can see what's required to get in the game.

Frequently Asked Questions

Who regulates cannabis consumption lounges?

Nevada Cannabis Compliance Board

What are the regulations?

Nevada Cannabis Compliance Board Regulation

NRS Chapter 678A

NRS Chapter 678B

What types of consumption lounges are allowed in Nevada?

Independent Consumption Lounge

A consumption lounge owned by an applicant that is not a retail cannabis establishment owner.

Retail Cannabis Consumption Lounge

A consumption lounge owned by a retail cannabis establishment (dispensary) and is attached or immediately adjoined to the retail cannabis establishment.

How many consumption lounge licenses will be issued in Nevada?

Number of Independent Cannabis Consumption Lounge Licenses to be Issued: 20 (at least 10 issued to social equity applicants)

Number of Retail Cannabis Consumption Lounge Licenses to be issued: unlimited

How many cannabis consumption lounge licenses can a person or entity own?

Initially, each applicant selected will only be able to receive 1 (one) license.

WHEN can I apply?

October 14th-October 27th, 2022

5 Stages of The Licensing Process Described

Before you start you should know the multi-step process that's involved. Many things happen from application to receiving a final license and most people won't make it to stage 2. Here we describe the 5 key phases involved in being able to open a Nevada cannabis consumption lounge. Think of it like a game with challenges to complete in order to advance each level.

1. Complete Application and Submit to the State

First, you have to apply. In this step, you must complete the cannabis consumption lounge application within the announced time frame, complete all application requirements (listed blow under "How to get Started"), submit electronically to the Cannabis Compliance Board.  Then it's in the hands of the Nevada Cannabis Compliance Board.  They will review and score the applications. In order to advance to stage 2, an application must receive at least the minimum score standard.

You'll need this Diversity Plan to meet the requirements of this stage of the application process.

2. Application Selection Lottery

Applications which meet the minimum score standard will be entered into a lottery for selection. If selected, advance to stage 3.  If not selected, this is where it ends.

3. Provisional License

Once an application has been selected in the lottery the applicant is issued a provisional license.  There are many more requirements to be met within a 120-day time frame in order for the applicant to move on to the next stage of receiving a conditional use license.  These requirements include a lot of information, documentation, and planning. This as known as a "suitability investigation."

If a provisional license holder FAILS to pass the review, it's the end of the road (unless they appeal the decision).  If a provisional license holder PASSES the suitability investigation, there's still more to go before stage 4. To pass stage 3, owners and board members of the company will have to attend a public Board meeting and be prepared to answer any questions the Nevada Cannabis Compliance Board may have for them. If approved, advance to stage 4.

4. Conditional License

Woohoo!  Almost there. At this stage an applicant has satisfied the requirements of Stage 3 and now has a conditional license.  The challenge? Get the lounge set up and approved for operation within 12 months. Ready...GO!

5. Final License

It's been 12 months or fewer.  The lounge is set up and ready to go.  Time for final inspection.  Pass the inspection and the lounge is good to go.  Fail the inspection and there will likely be a list of reasons why, and a follow up inspection will have to be scheduled once you fix the issues.  If you don't pass the follow-up inspection...get your act together.

Step-by-Step Process Overview

The license selection is a process, as described above.  It's geared toward making the selection as equitable as possible while also requiring the expertise and knowledge needed to operate a lounge. Here is a step-by-step version for you to carry around in your pocket like a checklist ;).

  1. Submit a completed application before the application deadline
  2. Applications will be reviewed on a rated based on a merit system
  3. Applications must meet a minimally viable score on the application
  4. Applications that pass review will be separated into their license categories (Retail, Independent, Social Equity)
  5. Each category of license will enter its qualified applications into a lottery.
  6. Applicants are then selected via lottery for each category
  7. Provisional licenses issued to selected applicants
  8. Within 120 days the selected applicants must provide operational plans and budgets
  9. Nevada Cannabis Compliance Board conducts a suitability investigation for every applicant selected in the lotteries.  
  10. After passing a suitability investigation, the owners and board members of the applicant company will then have to attend a public Board meeting for questioning
  11. Conditional licenses issued to applicants who pass the suitability investigation and board meeting.
  12. Run!!!! 12-months to set up shop.
  13. Final inspection.
  14. Woohoo!!!!!  Now you celebrate.  It's time to operate.

Getting Started - Application

The cannabis consumption lounge application process is the first hurdle to get over before you can even consider the fun stuff.   This is a necessary step that has specific requirements, time frames, and steps. Check this overview of what's required and what you can expect when applying for a cannabis lounge in Nevada.

Application Fees

  • Retail Lounge: $100,000
  • Independent Lounge: $10,000
  • Social Equity Qualified Applicant:  $2,500

Application Timeline

The Nevada Cannabis Compliance Board will announce an application time frame which is expected to take place sometime before the end of 2022. The window will last 10 business days.

Categories of Consumption Lounge Licenses

Before jumping in you'll need to know which type of license you qualify for. There are technically 2 categories, but the Independent lounge category has 2 parts.

  • Independent Consumption Lounge: A consumption lounge owned by an applicant that is not a retail cannabis establishment owner
  • Independent Consumption Lounge (Social Equity Qualified): A consumption lounge owned by an applicant that is not a retail cannabis establishment owner, and qualifies as a social equity applicant
  • Retail Cannabis Consumption Lounge: A consumption lounge owned by a retail cannabis establishment (dispensary) and is attached or immediately adjoined to the retail cannabis establishment.

Location Requirements

  • Licenses are jurisdiction specific
  • Must indicate in which jurisdiction you want your lounge to be
  • Must provide location address (which may change prior to opening)
  • Must secure evidence the location is owned by the applicant, or that the landlord has provided applicant with permission to use the location for a lounge.

Location Distance Requirements

  • Cannot be within 1,000 feet of a public or private school (K-12)
  • Cannot be within 300 feet of a community facility
  • Cannot be within 1,500 feet of an establishment that holds a nonrestricted gaming license

Check with the jurisdiction in which you apply! Some jurisdictions may have their own distance requirements which exceed the requirements of the state. Unincorporated Clark County for instance has their own distance requirements.

Ownership, Officer, and Board Member Info Required (for owners of %5+)

  • Federal background check
  • 21+ years of age
  • Provide name, address, and date of birth
  • Statement signed asserting that he or she has not previously had a cannabis executive agent registration card revoked
  • Financial information (possibly)

Ownership, Officer, and Board Member Qualifications

  • Must have business competence and experience for assigned role or position.
  • No affiliation with unsuitable (shady) people
  • Adequate proposed funding for the nature of the proposed lounge
  • Must have suitable source(s) of funding
  • Any individual owner may not hold 5%+ ownership in more than 1 lounge

How to Qualify as a Social Equity Applicant

Social equity applicants receive some benefits such as reduced application fees and a set amount of licenses set aside just for applicants who qualify. This qualification requires that a person have been impacted disproportionately by the war on drugs. This is measured via proof that the applicant was convicted of a cannabis related crime or that a close member of their family was convicted of such a crime. Additionally, the social equity qualification is measured by the region of residency of the applicant. Here's some more details about how to qualify and what documentation will be needed for the application.

Ownership

The social equity qualified team member must have at least 51% ownership in the business

Residency

The social equity qualified team member must have resided in one of the following places for at least 5 years:

  • A census tract with an Area Deprivation Index score of seven (7) state-only decile or higher
  • A census tract that has an incarceration rate in the 90th percentile at the time of the 2010 Decennial Census.

How to provide evidence of residency

If selected for a conditional license, must provide evidence of applicant's residency within 120 days by providing 2 of the following:

  • Receipt from the rent or lease of a residence located in an approved residence
  • Lease of a residence located in an approved area in the past 5 years
  • Record from a public utility for an approved residence address within the past 5 years
  • Bank or credit card statement from the past 5 years showing an approved residential address
  • Stub from an employment check showing an approved residential address
  • Document from a state or federal court in the past 5 years showing an approved residential address
  • Document issued by an insurance company/agent (insurance card, binder or bill) sent to an approved residential address
  • Record, receipt, or bill from a medical provider indicating an approved residential address
  • Tax records for the most recent tax year, excluding property taxes, showing an approved residential address
  • Statement or bill from the past 5 years, other than a bill from a medical provider, indicating an approved residential address
  • Record of property taxes assessed or paid for the most recent tax year for an approved residential address
  • Deed of trust or other documentation of a current mortgage for an approved residential address
  • Record from an educational institution in a qualifying area which establishes that the applicant is currently enrolled in the educational institution
  • Identification card issued in the past 5 years by the educational institution in a qualifying area that shows the address where the applicant resided
  • Receipt from a hotel, motel, recreational vehicle park or campground located in an approved area, for at least 30 days of consecutive residency within the past 5 years
  • Voter registration card issued to the applicant in the past 5 years  
  • Documentation of receipt of benefits under any state program of public assistance to an approved residence within the past 5 years
  • Leave and Earnings Statement, or an equivalent or successor form, from the past 5 years showing the approved residential address, of an applicant who is a member of the military and who is deployed outside of Nevada on active duty
  • Notarized statement from the owner of a residence located in an approved residence showing that the applicant lived/lives at the residence within the past 5 years
  • Documentation indicating that the applicant is a person for whom a fictitious address has been issued
  • Form approved by the Board as proof of the applicant’s residence in an approved residence

Cannabis Conviction

The social equity applicants must be included in at least one of the following categories:

  • Convicted of a non-violent felony and/or misdemeanor cannabis offense
  • Their immediate family member (parent, sibling, or child) was convicted of a felony cannabis offense and who lived in or currently lives in: A census tract with an Area Deprivation Index score of seven (7) state-only decile or higher, OR a census tract that has an incarceration rate in the 90th percentile at the time of the 2010 Decennial Census

In order to show that the applicant qualifies based on the cannabis conviction criteria, provide evidence of the conviction with one or both of the following:

  • Certified copy of the Judgment of conviction
  • Proceedings sheet and/or court minutes

Lottery Winner! - Provisional License

Imagine that you apply for a license, excitedly await the results of the lottery, and then get the news that your application has been selected in the lottery.  What then?  Celebrate?  Not quite yet.  Next up you have to submit an array of information and documentation within a 120-day time frame, and undergo a character investigation of the entire team, plus attend a public meeting where anyone on the team can be questioned by the Board. Fun!

All plans submitted will need to be fully compliant with regulations.  Here's the bulleted list of plans required, followed by a more detailed description for each one:

  • Proposed Hours of Operation
  • Financial Info
  • Security Operating Procedures
  • Inventory Control Operating Procedures
  • Cannabis Product Handling Operating Procedures
  • Ownership Information
  • Personnel Info
  • Business Plan
  • Diversity Plan
  • Ownership Resumes
  • Financial Statements
  • Business Plan

Proposed Hours of Operation

Choose these wisely, you'll have to stick to them.

Financial Information

The Cannabis Compliance Board wants to know that, should an applicant be awarded a license, they will be able to operate the lounge.  Operating a cannabis consumption lounge requires capital, as does any business.  Here's the financial info you'll need to have prepared.

  • $250,000 liquid capital (to be shown within 120 days of receiving a conditional license)
  • Suitable funding for the type of operation
  • The source of business funding must be a person of good character, honesty, and integrity (i.e. not shady or potentially embarrassing to the State)

Security Operating Procedures

Security plan including:

  • Equipment
  • Personnel
  • Response Plans
  • Access Control
  • Communication with local authorities
  • Product safety
  • Employee training
  • Employee safety
  • Customer safety

Inventory Control Operating Procedures

Inventory control, including, at least:

  • Tracking
  • Packaging
  • Acquiring cannabis from other cannabis establishments
  • Disposing of unusable waste containing cannabis or unconsumed cannabis and cannabis product rendered unusable
  • Returning for a refund of cannabis or cannabis products to the cannabis establishment from which the cannabis or cannabis products were acquired.
  • Cannabis consumption lounge may only acquire products from a cannabis dispensary

Cannabis Product Handling Operating Procedures

Required food and product handling certifications for certain employees.

Ownership Information

  • Experience with operating a consumption lounge
  • Experience with operating a compliant cannabis business in any state
  • Education
  • Life Experience

Personnel Info

  • Experience of key personnel to be hired for operations
  • Role descriptions, including responsibilities

Diversity Plan

Objectives, timetables, and evaluation metrics and steps an applicant will take to ensure that the cannabis consumption lounge will promote the meaningful inclusion of diverse groups. Diversity refers to minorities, women, and people of other backgrounds which are disproportionately underrepresented. However, the inclusion of other underrepresented groups, including, but not limited to veterans, persons with disabilities, and LGBTQ+, is encouraged.

  • Demographic information of each owner, officer, board member, employee, and independent contractor as currently known
  • Strategies for obtaining a diverse group of owners, officers, board members, employees, including executive positions, management, and independent contractors
  • Employee hiring and retention diversity goals
  • Plan for diversity related outreach or events the applicant will conduct to support its diversity goals in ownership, investment, management, employment, and contracting
  • Materials from the applicant on its mentoring, training, or professional development programs for diverse groups
  • Proposed timelines and benchmarks for achieving the diversity goals outlined in the Diversity Plan, or in the alternative, a narrative describing the applicant’s ability to record and report on the components of the Diversity Plan
  • Any other information that demonstrates the applicant’s commitment to diversity in ownership, investment, management, employment, and contracting

Resumes

A timeline of experience, and itemization of qualifications for each:

  • Owners
  • Officers
  • Board Members

Financial Statements

Last two fiscal year financial statements (or a statement explaining why the financial statements are not available), including:

  • income statement
  • balance sheet
  • earnings before interest, taxes, depreciation, and amortization (EBITDA)

Business Plan

A detailed, cannabis consumption lounge business plan including at least:

  • 2-year business plan
  • First year operating budget

Company History

A narrative description of the company's story, including things such as:

  • Why the company was founded
  • Mission, vision, values
  • Year founded
  • Brief founder profile
  • Turning points
  • Accomplishments

Passed Review! - Conditional License

Time to set up! Now you have to work closely with state and local governments and officials to meet all necessary requirements to receive the final license.  These requirements will include, at a minimum, the following:

  • Compliance with the zoning and land use rules adopted by the local government in which the establishment will operate
  • Issuance of a permanent or temporary business license for the operation of the cannabis establishment by the local government
  • Completion of a pre-opening final inspection of the cannabis establishment by the Board that results in a statement of no deficiencies or approved plan of correction
  • Establishment and implementation of any and all other requirements as required by the specific regulations that governs the cannabis establishment license type awarded as well as any other requirement of the Board or local government
  • Full payment of all annual license renewal fees and outstanding time and effort billings

NOW You're Licensed to Operate!!!

Let's get to the good stuff. There is a lot to know in order to operate.  Here are some of the key things to know before going into the process.  We've included rules about the products that lounges are allowed to sell, and policies and procedures that lounges must have in place to properly operate within the state regulations.  We've shortened the description of the policies required for brevity.  The full requirements can be found here.

Products

There will be limits on products permitted, product serving sizes and potency limitations.  These will have to be followed to a T when operating cannabis lounge and were developed in order to mitigate the risk of overconsumption.

Products Permitted

Cannabis consumption lounge shall only offer for sale:

  • Single-use cannabis products
  • Ready-to-consume cannabis products
  • Cannabis paraphernalia
  • Cannabis-related accessories
  • Products containing CBD
  • Products containing industrial hemp which are related to cannabis

Consumption Lounge Cannabis Product Categories

The 2 categories of products are ready-to-consume, and single-use, described below.  Each of these categories encompassed multiple types of products and the categories have more to do with the way the products are presented, packaged, handled, or dosed.  Lounges can only purchase products from dispensaries (cannabis retail establishments), not directly from wholesalers (cultivation and processing facilities).

Ready to Consume Products

Ready-to-consume cannabis products include, but are not limited to, edible cannabis products that have been pre-washed, precooked, or otherwise prepared for consumption and do not require additional cooking or preparation, including portioning. Menu items must be submitted to the Cannabis Control Board and approved before they can be sold at a lounge. Preparation of all ready-to-consume cannabis products must comply with FDA food code and any other local health code as enforced by locality.

Each serving of a ready-to-consume cannabis product must be individually dosed, and:

  • Prepared and/or infused on the premises of a cannabis consumption lounge
  • Presented in the form of a food or beverage
  • Sold in a heated or unheated state
  • Intended for immediate consumption
  • Each ready-to-consume cannabis product must include the notice “THC may not be evenly distributed throughout this product.”

When preparing and serving ready to consume items, the lounge:

  • May separate pre-measured single-dose concentrated cannabis procured from a cannabis sales facility for the purpose of individually dosing each ready-to-consume cannabis product in its final state
  • Clearly mark ready-to-consume cannabis products with the cannabis dose in the dish when being served to consumers
  • Must notify the consumer as to which part of the dish is infused
  • Must include allergen information on the menu
  • May not encourage sharing of ready-to-consume cannabis products

Single-Use Products

Single-use cannabis products include, but are not limited to, items that are designed for use in a single sitting. Single-use cannabis products may be provided in bulk to a cannabis consumption lounge for later portioning prior to sale to consumers. All Single-use cannabis products must be prepared at a licensed cannabis establishment and may not exceed the allowable serving size (no products that the customers have to be in charge of figuring out the dose.  ie, no brownie with 50mg that they have to separate out in to 10, 5mg pieces). Items must be sold as a single serving and labeled in accordance with the regulations.

Product Potency Limitations - Maximums

A cannabis consumption lounge is not allowed to sell any cannabis products which exceed:

  • 3.5 grams of usable cannabis
  • 300 milligrams THC for inhale-able extracted cannabis products
  • Topical cannabis products containing not more than 400 milligrams of THC
  • 100 milligrams of THC for transdermal patches
  • 10 milligrams of THC for an edible, capsule, or tincture

Required Product Warnings

If the single-use cannabis product contains more than 10 milligrams of THC, it must include a written warning: “Caution- This product is very potent and is not recommended for inexperienced users”

If the single-use cannabis product contains more than 1 gram of usable cannabis, it must include a written warning: “Caution- This product is very potent and is not recommended for inexperienced users”

All single-use cannabis product sold as an inhale-able extracted cannabis product must include a warning, “Caution- This product is very potent and is not recommended for inexperienced users”

Rules for Products Sold

  • Edible cannabis products in liquid form must be homogenized prior to portioning and must be dispensed and sold to consumers utilizing a certified commercial scale
  • May only sell products which have been obtained from an adult-use cannabis retail store in this State
  • Hemp and hemp derived products must be accompanied by a certificate of analysis from a cannabis independent testing laboratory, and a copy of the hemp grower’s certificate
  • Hemp and hemp derived products must be labeled with the amount of THC and state, “this product does not contain cannabis” in at least 8-point font.
  • Lounge must offer low dose options of cannabis products containing no more than 2mg THC in a cannabis product or 0.5 grams of usable cannabis
  • Lounge may allow any cannabis products to be removed from the lounge
  • Lounge must inform the consumer that removing such products from the lounge is illegal
  • Lounge many not sell any product that contains tobacco and/or nicotine, or vape liquid that is not produced by a licensed cannabis production facility
  • Lounge may not sell any product that contains alcohol if the product would require the cannabis consumption lounge to hold a license to sell alcohol
  • Lounge may not sell single-use cannabis products or ready-to- consume cannabis products without first communicating with the end-use consumer
  • Employees of the lounge must inquire about and assess a consumer’s usage and needs
  • Lounge may not knowingly recommend products to persons who are pregnant or breastfeeding

Leaving with cannabis

A cannabis consumption lounge shall not allow a consumer to leave the licensed premises with any unconsumed cannabis in accordance with the requirements of Nevada law. Lounges have to create and submit a written plan that either prohibits or provides a way to store and return any cannabis or cannabis products previously purchased by a consumer.

Required Operating Policies and Procedures

Food Handling

Cannabis consumption lounges will have to comply with any federal, state and local applicable laws or regulations related to on-site food preparation, including required certification for some employees.

Record Keeping

Required logs that must be maintained for a minimum of two years.

  • Consumer illness log for illnesses reported after consumption or overconsumption.
  • Employee illness log.
  • Visitor

Designated Smoking Room

All indoor cannabis smoking or inhalation must be confined to a designated smoking room.

Required Signage

The following notices that must be posted within the cannabis consumption lounge in an obvious location:

  • “HEALTH WARNING: Pregnant or breastfeeding people should not use cannabis or cannabis products. Using cannabis during pregnancy or while breastfeeding may be harmful to your baby’s development.”
  • “HEALTH WARNING: This is a smoking lounge. Occupants will be exposed to secondhand smoke. Secondhand smoke is hazardous to your health.”
  • “Consumption Area – No One Under 21 Years of Age Allowed.”
  • “Must be 21 or older to enter”;
  • “Cannabis may only be consumed in designated areas out of public view”
  • “No consumption of alcohol, tobacco and/or nicotine products on site”
  • “We reserve the right to refuse entry or service for any reason including visible intoxication”
  • “It is against the law to drive while impaired by cannabis”
  • “Firearms are prohibited”.
  • Loitering is prohibited and consumption of cannabis is only permitted in designated areas out of public view (outdoor sign)

Employee Training

The employee training program shall include at a minimum of eight hours of compensated instruction time for initial training and four hours of compensated supplemental instruction time each year thereafter.

  • Proper use of security measures and controls for the prevention of diversion, theft or loss
  • Procedures and instructions for responding to an emergency
  • State and federal statutes and regulations related to the use of cannabis.
  • Methods for identifying signs of visible overconsumption of cannabis alcohol or drugs
  • Resources to mitigate impaired driving, including safe transportation options available
  • Strategies for inquiring about and understanding a consumer’s varying experience with cannabis
  • Policies for interacting with law enforcement
  • Signs of poly-substance interactions including but not limited to interactions of cannabis with alcohol, prescription, and over-the-counter medications and other substances
  • Risks and potential responses to adverse events such as overconsumption, dehydration, poly-substance use, or other similar events
  • Procedures to de-escalate interactions with intoxicated consumers
  • Development of an emergency action plan
  • Approaches for sexual assault prevention
  • Resources available for responsible cannabis use
  • Resources for understanding the difference between concentrated cannabis, topical products, and cannabis products
  • Proper methods of destruction of cannabis products sold at the lounge

Job Descriptions and Employment Contracts

  • The duties, authority, responsibilities, and qualifications of personnel
  • Supervision of personnel
  • Training in and adherence to confidentiality requirements
  • Periodic performance evaluations
  • Disciplinary actions
  • Disclosure of potential health risks involved with the performance of job duties.

Age Verification Plan

Verify the age of the consumer by checking and authenticating a government-issued identification card containing a photograph of the consumer using an identification scanner approved by the appropriate Board Agent to determine the validity and authenticity of any government-issued identification card as well as visually inspect the birthdate on the form of identification presented.

Financial Record Keeping Plan

Business records, such as manual or computerized records of assets and liabilities, monetary transactions, journals, ledgers and supporting documents, including, without limitation, agreements, checks, invoices, and vouchers.

Inventory Record Keeping Plan

Inventory management is one of the most important factors in any cannabis business type.  you must be able to track and trace inventory ever single step of the way. Lounges must have inventory control plans that includes, at least:

  • Tracking
  • Packaging
  • Acquiring cannabis from other cannabis establishments
  • Disposing of unusable waste containing cannabis or unconsumed cannabis and cannabis product rendered unusable
  • Returning for a refund of cannabis or cannabis products to the cannabis establishment from which the cannabis or cannabis products were acquired.
  • Cannabis consumption lounge may only acquire products from a cannabis dispensary

Consumer Education Plan

The State wants to make sure that consumers know what they're getting in to when consuming cannabis products.  Every lounge must come up with a plan to accomplish this consumer education. This plan must at least include:

  • The availability of different strains of cannabis and the purported effects
  • Purported effectiveness of various methods, forms, and routes of administering cannabis
  • The prohibition on the smoking or consumption of cannabis in public places, places open to the public, within a cannabis sales facility, except within licensed cannabis consumption lounges, and places exposed to public view
  • Education on how cannabis impairs a person’s ability to operate a moving vehicle and is unlawful
  • That possession of cannabis exceeding a certain quantity remains a felony with various.

Security Plan

Each lounge must submit a security plan that adheres to the security specific regulations including required equipment and standard practices and procedures.

Security Equipment

To prevent unauthorized access to cannabis at a cannabis establishment, the cannabis establishment must have:

  • One single secure entrance of the physical building
  • No visible cannabis or cannabis products from outside the establishment
  • Security equipment to deter and prevent unauthorized entrance into limited access areas
  • Interior Lighting
  • Video cameras with a recording resolution of at least 720 x 480, or the equivalent, at a rate of at least 15 frames per second
  • A video camera which is capable of identifying any activity occurring within the cannabis establishment in low light conditions
  • A method for storing video recordings from the video cameras for at least 30 calendar days in a secure on-site or off-site location or through a service or network that provides on-demand access
  • Failure notification system that provides an audible and visual notification of any failure in the system
  • Sufficient battery backup for video cameras and recording equipment
  • Immediate automatic or electronic notification to alert local law enforcement agencies

Security Policies

Each cannabis establishment must employ a security manager or director, and establish security policies including the following:

  • Restrict access to the areas of the cannabis establishment that contain cannabis to persons authorized to be in those areas only
  • Provide for the identification of persons authorized to be in the areas of the cannabis establishment that contain cannabis
  • Prevent loitering, other than consumers already admitted to a cannabis consumption lounge
  • Conducting electronic monitoring
  • The use of the automatic or electronic notification to alert local law enforcement agencies of an unauthorized breach of security at the cannabis establishment
  • Limiting the amount of money available in any retail areas of the cannabis establishment and for training employees on this practice
  • Notifying the public of the minimal amount of money available, which may include, without limitation, the posting of a sign
  • Maintaining communication with law enforcement agencies
  • Providing and receiving notifications regarding burglary, attempted burglary, robbery, attempted robbery and other suspicious activity
  • Emergency response

Employee Hygiene, Cleanliness, and Health

Each cannabis consumption lounge shall ensure that each cannabis establishment agent who is employed by or volunteers at the cannabis establishment and who is engaged packaging or holding cannabis or cannabis products:

  • Wears clean clothing appropriate for the duties he or she performs
  • Maintains proper hygiene
  • Is not showing signs of illness

Air Quality and Ventilation Plan

The cannabis consumption lounge must create and mandate work protocols and indoor or outdoor air quality standards that minimize employees’ secondhand smoke exposure, including training to employees on the proper use of Personal Protective Equipment (PPE).

A ventilation plan must be submitted, approved, with changes as necessary, and fully implemented prior to issuance of a final license.

Impaired Driving Plan

Each cannabis consumption lounge has to develop a plan to mitigate the risk of impaired driving, to include making information readily available to the consumer about transportation options. As part of this plan, each cannabis consumption lounge shall adopt practices that discourage impaired driving, with consideration of examples, including but not limited to as a 24 hour no tow policy and/or a potential partnership with ride share to offer discounted rides both to and from the premises to consumers.

Quality Control Plan

Cannabis consumption lounges are required to have a Quality Control Unit, and quality control procedures.

Each cannabis consumption lounge must have written procedures for production and process control that are designed to assure that the cannabis or cannabis products have the identity, strength, quality, and purity they purport or are represented to possess.

Packaging and Labeling Plan

Every lounge must have written procedures describing in sufficient detail the receipt, identification, storage, handling, sampling, issuance, and examination of labeling and packaging materials.

Every lounge must affix to, or include with, or supply through an approved electronic medium a label which must include all product information and warnings as listed by the regulations.

Components, Product Containers and Closures

Each cannabis consumption lounge must have written procedures describing the receipt, identification, storage, handling, sampling, testing and approval or rejection of components, product containers and closures.

Transportation Plan

A cannabis dispensary is not allowed to transport to an independent cannabis consumption lounge unless that dispensary holds a license for an adult-use cannabis distributor.  Otherwise, an independent adult use distributor will have to be utilized to transport product from a dispensary to an independent lounge.

Visibility Prevention

A cannabis consumption lounge shall ensure that the display and consumption of any cannabis is not visible from outside of its premises. There may be an outdoor area, as long as cannabis is kept out of plain sight and is not visible from a public place, the consumption area is surrounded by a sight-obscuring wall, fence, or other opaque or translucent barrier, and the height of the consumption area is higher than the surrounding area and obscures view of consumption.

Conclusion

Nevada cannabis consumption lounge ownership is an exciting prospect. With a limited number of licenses, getting one of them will truly be like winning the lottery. Our take is, why not take the shot?  The regulations aren't as expansive as they could be (for instance, it would be better if alcohol could also be served) but they may broaden over time. Being the first to have a cannabis consumption lounge in Nevada would get you ahead of the game as soon as the regulations do improve. The applications for the lounges will be coming soon (we're currently in August 2022 and looking for applications to open in September or October of 2022). Are you ready to get started? First get your diversity and inclusion plan which will be required for your application, then contact us if you need any more guidance.

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Related Sheets.
Regulatory Citations for This Article

Nevada Cannabis Compliance Board Regulation

NRS Chapter 678B

NRS Chapter 678A