Cannabis consumption lounges are on track to set up shop in Nevada by mid-2022 and shake up the state’s marijuana industry after the Interim Finance Committee greenlit new funding on Wednesday that will help the Cannabis Compliance Board (CCB) oversee a brand new breed of business. 

Legal consumption at locations outside the home comes more than four years after Nevada legalized recreational cannabis use. Lounges were effectively authorized in July under AB341, legislation that prioritized diversity among new entrants in the predominantly white industry and made the CCB (the state agency that regulates Nevada’s legal marijuana businesses) responsible for licensing and regulation.

With Nevada now among seven states where lounges are legal, proponents say providing residents and tourists with bars, restaurants and other places to consume cannabis products onsite will attract a wider market of consumers, benefiting the economy. Fifty-nine adult-use dispensaries have already expressed interest in applying to open their own.

At the interim committee — which determines spending outside of Nevada's 120-day normal legislative session — lawmakers unanimously approved three items that will provide the CCB with funds to hire more staff, work with the state attorney general’s office to hammer out regulations, and direct cannabis revenue toward education funding. 

CCB Executive Director Tyler Klimas said the items passed by the Interim Finance Committee would direct $10.9 million to fund 23 new full-time employees at the regulatory agency. Klimas added that those would include positions responsible for cannabis lounge licensing, pre-opening and ongoing compliance checks, background checks, lounge suitability determinations and criminal investigations

“To implement a program of this size and this complexity, it touches all aspects and all core functions of the agency,” Klimas said to lawmakers. “So that is administration and licensing. That’s audit and inspections. That’s investigation and that’s enforcement.”

Klimas added that the hiring of that staff would be staggered to save costs. To finalize cannabis lounge regulations that CCB staff will carry out, $304,000 was approved for the board to work with the attorney general’s office.

Klimas said the cannabis lounge program is also projected to add nearly $9.2 million in new revenue that will be directed to the Pupil-Centered Funding Plan — the new K-12 funding formula adopted by lawmakers earlier this year —  at the end of the 2022 fiscal year.

The proposal drew widespread support from lawmakers at the meeting.

“This is going to be an industry that is going to pay for itself, and then hopefully be able to fund education in a way that I think we’d all like to do here in the Legislature,” Assemblyman Steve Yeager (D-Las Vegas), who introduced AB341, said.

With funding now approved by the Interim Finance Committee, the CCB hopes to meet sometime at the end of this year to vote to adopt regulations on lounge applications and licensing and bring the establishments to fruition.

“All goes as planned, we’re looking at — at least the first quarter, or the first half of 2022,” Klimas said. “Not only to see the lounges open, but then also the first part is where we would start to realize that revenue.”