Since Nevada legalized recreational marijuana use more than a year ago, there’s been little progress on solving a key conundrum — that tourists can buy the stuff, but essentially have no place to legally use it.
But Ricardo Baca, The Denver Post’s first-ever marijuana editor who now leads a cannabis public relations agency, believes those days are numbered. He foresees Las Vegas overcoming its fraught relationship with cannabis and turning it into a major money-making opportunity in the same way the city has revolutionized the nightclub scene.
“I think Vegas has the opportunity to completely turn this on its head,” he said in a recent interview with The Nevada Independent. “I wouldn’t be surprised if three years from now we can order a 10 mg shot of CBD in our Jamba Juice or if we have pre-rolls in the mini bar waiting for us in a nice glass tube. I think that the possibilities are endless.”
There are currently political roadblocks. A bill that would have explicitly allowed for public businesses where marijuana is consumed died in the Legislature after Gov. Brian Sandoval signaled he would probably veto it, and the Gaming Policy Committee he chairs recently declared in no uncertain terms that gaming establishments can’t mix with marijuana enterprises. That means no dispensaries on casino properties, but also bans less obvious arrangements, such as gaming licensees having any financial stake in marijuana businesses.
In town for the Nightclub and Bar Convention and Trade Show, where he was moderating a panel featuring business people who run marijuana tour companies and throw cannabis-infused dinner parties, Baca spoke about what the future of public consumption might look like in Nevada should local and state governments pursue regulations for the industry.
The Indy: Some in the marijuana industry haven’t pushed too hard for consumption lounges because it would entail opening up a space for people to smoke, but probably wouldn’t involve making sales within the venue like a bar. Is there a viable business model for a marijuana consumption lounge?
Ricardo Baca: It is tough in that regard because most of the U.S. states that are going to be doing this are going to have the kind of model where the sale can only happen in the regulated retail environment and that’s not the consumption lounge, that’s not the tasting room. Depending on the legislation that’s in various stages in statehouses throughout the country, there are some models where the tasting room could be connected to the retail environment, so you buy, you go next door, you consume.
California has probably the most progressive model in the U.S. right now. I was just out there three weeks ago speaking at The San Francisco Chronicle and right across the street there’s a beautiful shop. I think it’s called Barbary Coast … and you walk in, a decent shop, lots of [point of sale] stations … You make your purchase and then on the way out you pass another door and right next to the shop is a lounge, leather booths, kind of lovely, and there’s a haze hanging in the air. You can rent vaporizers, borrow glass, borrow rigs, and you can actually buy dabs at the dab bar next door in the lounge. Very progressive model, probably the most progressive model in the world when it comes to social use and public consumption.
Because we can look to other models and really speak to the failures of how we’ve tried to legalize cannabis. The Dutch and the Netherlands are right now just trying to escape this impossible conundrum that they’ve created where consumption and sales are legal, [but] growing is illegal. So right now the Netherlands’ government is trying to push that through because of course their coffee cops can sell it but it manifests itself somehow miraculously because it’s illegal to grow. It’s illegal to import.
In Canada, or course it’s all black/gray market … But one thing I did notice in Toronto that’s similar to the model that will most likely exist eventually in Nevada and Colorado is vape lounges aren’t selling product, but they are charging a cover. They are selling food. They are selling [merchandise]. They’re just trying to get you at every potential entry point so they can actually cover their bills, because they can’t legally sell product and even what they’re doing is already mostly not really savvy with the law.
So it’s going to be tough. It is going to be brutal for these businesses to figure out how to make a profit margin, but hopefully regulators are understanding and leave open avenues, like the ability to have a kitchen. That’s substantial, but I know that some regulators in Colorado, that makes them nervous because people are handling food, there’s the consumption of the substance, whatever, but I think so long as some of those avenues are left open, that some will figure out a way to make this work.
Indy: What concerns regulators about having food in places where marijuana is consumed?
Baca: I think it’s more about food safety, the cleanliness of the environment, things like that. Colorado is kind of leading this conversation and following it in many ways because we passed Initiative 300 in 2016 in Denver County and that’s the world’s first permit basically for social use, because, of course, all of these legislators created a legal market where consumption isn’t legal, which is kind of ridiculous and it’s absurd to force people into their own homes to consume the substance that they’re buying legally in stores.
But then, it’s taken a long time to implement 300, if you’ve been paying attention. There’s two permits out, neither business is opened. One is a spa, one is a coffee shop, and they’re kind of talking about the business plan functionality that you’re asking about, and that’s, ‘How do we do this? How do we make a profitable margin while we cannot sell the substance?’ But at the very least, it’s a start.
Indy: How is California addressing this issue of public consumption?
Under Prop 64 (California’s 2016 recreational marijuana initiative), state fairgrounds are open consumption spaces and I believe they’re kind of the only ones right now other than the occasional permitted lounge, which have to agree with local municipality rules. So I think this summer we’ll be seeing a lot of music festivals, art festivals, outdoor events, in state fairgrounds throughout the state because you can legally consume there. Promoters can encourage it and be okay with it.
Indy: What have been your observations about Nevada, where we have tens of millions of tourists but nowhere to consume?
Baca: We’ve been dealing with the same thing in Colorado so I understand a lot of the frustrations. … I remember I was walking downtown early 2014, Denver, and I saw a guy in a suit, clearly well off, in the alley behind the new Four Seasons smoking a joint and we just kind of made awkward eye contact and he’s like, “Hey man, you seem cool. I don’t know where the hell I can consume this. I’m not from here. Obviously, I’m staying here. They told me that they could charge me $350 if I smoked in the room.” And so I don’t think this is legal, using out in the alley behind the Four Seasons, but that’s where he was forced to do it and I was like, “If I were you, I’d be in the same exact place.”
It’s embarrassing that Colorado is so far behind on this conversation. I’ve talked with multiple regulators about this issue … I’ve even heard back from very high-ranking regulators that they don’t consider it a problem, and to their credit, they’re like taking on … making sure that edibles were readily identifiable outside of packaging and they were regulating single serving sizes and things like that, really important things. But this is also important and I think by brushing it off, they’ve just opened up an opportunity for Nevada and California to really take the lead in a conversation that we’ve been leading since 2010, 2009, when we regulated medical marijuana.
Indy: Why do you think regulators don’t see this as a top priority right now?
Baca: Delivery is also a big concern and certainly something that’s being debated here in Denver and California.
I do understand the plight. There are more important issues, pressing issues. They look at it and they don’t care, but I also look at it as such a glaring omission. It’s like, you legalized this for everything. We can grow, possess, use, and I’m thankful to own a home because if I didn’t, my own use would be dictated and mandated by the apartment complex or the government agency running my subsidized housing or whatever it might be, and that’s understandable. They should have their right to do that, but there should be alternatives and it’s … ridiculous that there aren’t.
Indy: So, is it profitable to have a business where customers are just sitting there at a lounge consuming cannabis?
Baca: There’s a decent markup on any cannabis product on the retail side … when you walk in they give you one of those restaurant buzzer things that tells you your table’s ready and they’re like, if we get busy, you have an hour or an hour and a half at your table, so I’m guessing there are times when they get busy and there’s turnover so they have to kick people out so they can sit somebody new at your booth.
I think it has potential for wild success, and of course, the double standards that are brought up in this conversation about, ‘well how will these stoned people get home’ kind of ignore the fact that we have a mostly operational bar system throughout the country and most other countries that’s not without fault, of course, because DUIs are killing plenty of people every year and how do we prevent that? Just from my own personal anecdotal experiences, I know that I generally make more sound responsible decisions when I’m stoned versus when I’m drunk. And that’s not to say that there won’t be people who get behind the wheel while intoxicated on THC, because that happens daily.
Indy: Do you foresee alcohol being served at places where people are consuming cannabis?
Baca: You know, this is about baby steps … The next baby step is definitely a cannabis only space. Scientists and regulators are concerned about the potential interaction of cannabis with other substances and I think they should be, because so much of the negative impacts that we have seen of marijuana really comes when you’re mixing cannabis with alcohol and maybe it’s a substance, maybe it’s a mental illness, maybe it’s some sort of other condition. It’s rare. Ninety thousand people die every year in this country from alcohol and the federal government, the CDC, FDA, DEA all agree that zero people are killed every year by cannabis. So these are facts coming out of the national, the federal government.
So you know, there hasn’t been much legitimate research right now on the combination of alcohol and cannabis, but I think they’re just cautious and so they’re moving slowly forward. I had this conversation last night with a colleague who is also in town for this convention that I’m speaking at and he has a book on cannabis cocktails and he and I were talking. In our own experiences, the combination of cannabis of alcohol is kind of a beautiful thing in the same way that cannabis and food can be beautiful in the way that it enhances the experience and takes you out of your normal routine and encourages you to try something you’ve maybe never tried before. So we know this anecdotally but we know we’re relatively responsible about not overconsuming on one or the other and we’re also veterans by this time. I think easing into this part is generally a good idea.
Indy: Is there concern among folks in the bar industry, in the liquor industry, that cannabis consumption could encroach on their businesses?
Baca: Oh, a lot of these bar and nightclub owners are terrified. There’s this quiet tension because, of course, they want to capitalize on it. How can we make money on it? How can we monetize this? And going back to the tasting rooms and the lounges, chances are they won’t be able to sell infused products anytime soon. Eventually I do believe that will happen. We’ll have cannabis-infused beverages. We already do, but I don’t think we’re that far off, five, ten years, from those being behind the bar next to a Heineken, but in the meantime, I think that they’re moving forward conscientiously for a reason.
Years ago, before Initiative 300 in Denver … activists were putting forth a measure … that was going to have some sort of social use component, and I called 15 or 20 local restaurants, bars, just well-known people … Everybody except for one individual said they would not support such a bill, because the stakeholders were looking for other stakeholders in the surrounding industries to support them and sure enough, they were having a hard time finding bars and restaurants to support them because they really felt at the core that if they had onsite consumption of cannabis they’re going to have smaller bar bills and that’s absolutely true. We know that to be true. And so I think they should be aware of that.
At the same time, they might have larger food tickets because of munchies or whatever that might look like, but yeah, I think there’s certainly a quiet tension in the room. But they also are curious because they think if people are in the nightclub industry they generally understand. They understand intoxicants because they’re surrounded by them and they also have legitimate concerns in this new world because a bar or a restaurant or a nightclub can get in trouble for over-serving somebody, and so if they are not the ones doling out the servings, then how can they be held responsible for it when somebody mistakenly or stupidly eats 100 mg of a chocolate bar and ends up on the ground.
Indy: So what do you envision for Vegas in terms of how could we uniquely approach social use?
Baca: I think you guys are going to be the ones to blow the roof off this. Social use, public consumption, whatever we want to call it, it’s really primed for somebody just to run with it. It’s absurd that we don’t have a more robust infrastructure in any of these markets … I think Vegas has the opportunity to completely turn this on its head and to show how it can be done responsibly, especially because you guys here are the kings and queens of regulated industry and substance and vice and how can we legalize this because it’s probably the right thing to do from a humane perspective, but also how can we monetize this, and I really see that happening in Nevada.
I think about 420-friendly blackjack rooms. I think about fine dining from A-list, known chefs that are infusing meals. Maybe it’s once a week, maybe it’s every day or maybe it’s just an option on the menu. Infuse this fettuccine or anything else for $20 per 5 mg. I think you guys really will be the ones to figure this out and it’s thrilling. And I also wouldn’t doubt that it’ll be done responsibly, because as I mentioned, you guys have experience with all this stuff.
Indy: Marijuana is totally off-limits for casinos right now. Do you see that as a major roadblock?
I don’t know if I would call it a major roadblock … I mean, Vegas has such a history of corruption that when you have a very valuable new legal substance, maybe you do want to put some guardrails around that.
I don’t think that will be a forever kind of thing. I think it’s them nervously just throwing up a safeguard and then they’ll inevitably look at it in the years to come to see if it’s legitimately needed.
I think inevitably we’re coming out of prohibition and it’s uncomfortable and it’s awkward and slow and kind of painful to watch at times, but we still just accomplished something monumental when you think about it because inevitably the legalization of cannabis is the biggest drug policy shift in any of our lifetimes and I think that it’s truly just the tipping point for what we’re about to see in the next five, ten years with MDMA and Psilocybin, LSD and other substances.
But I inevitably think that we are just starting slow and we’re just taking these baby steps forward and that’s kind of how we got here … What we’re already starting to see in Colorado is the lifting of regulations. It’s not like they’re lifting them willy nilly, but inevitably they’re recognizing that, oh, when we wrote these regulations — I mean, their favorite thing to say at the time was that they were flying the plane as they were building it, at the same time. Nobody had ever done this in the modern world.
Regulating cannabis, especially at the adult use level, never been done, and so they were freaking out and inevitably they overacted because they wanted to protect the kids, they want to protect the adult, and inevitably, I think we are starting to see the shrinking, the pullback of some of those regulations.