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What does a highly regulated pot industry mean in Nevada? No marijuana vending machines, strict lab tests

Michelle Rindels
Michelle Rindels
Jackie Valley
Jackie Valley
Soni Brown
Soni Brown
An employee prepares cannabis for planting in the propagation room at Reef Dispensaries

UPDATED Jan. 16, 2017, 2:45 p.m.

Nevada prides itself on having the gold standard of regulation for gaming, and wants to extend that sterling reputation to its new marijuana industry.

On Tuesday, members of the Nevada Tax Commission voted unanimously to approve a 258-page set of draft permanent regulations for recreational marijuana. They flesh out the details of laws already passed by voters through Question 2 in 2016 and by Nevada lawmakers in the 2017 legislative session.

A sizeable number of attendees at the commission meeting lodged concerns about the rules, including worries that they favor large, existing, vertically integrated marijuana companies in the distribution of additional retail store licenses. Officials from some cultivation facilities that don't have stores yet said they worry if they don't get a dispensary license, they will go out of business because other dispensaries that have their own supply prefer to buy from themselves.

There were also concerns about a strict requirement that marijuana can't test positive for aspergillus, a type of mold.  Dispensary owner Dr. Nick Spirtos argued that the ban could create strains of resistant super-molds and exacerbate the problem.

Nevada Department of Taxation director Deonne Contine stood by the regulations, saying her agency needed to err on the side of public safety, especially on behalf of people with vulnerable immune systems, in banning aspergillus. She added that the license distribution model makes sense because it rewards operators who are already known and trusted to regulators. But she also noted that the regulations are likely to evolve.

So what exactly does it look like to tightly regulate the industry? Here’s a glimpse at 20 interesting rules inside the regulations:

  • Owners must maintain good standing: The Department of Taxation won’t issue a marijuana business license if an owner, officer or board member is found to have some relationship with the agency, stake in a testing lab that’s supposed to be independent or lies on the application. A license may be revoked if a key player is convicted of certain felonies or has serious violations of the Nevada Administrative Code, such as breaking the rules on the collection of an excise tax.
  • The state collects the demographics of key players: Nevada authorities request data on the race, ethnicity and gender of all owners, officers and board members of a proposed marijuana business. If the state has more qualified applicants than licenses, it may consider the business’s diversity, and other factors, in breaking the tie.
  • Show them the money: Marijuana business applicants must prove that they have enough money to cover all the expenses for one year.
  • Yes, the state gives preferential treatment to some applicants: If two qualified applicants are vying for a single license, the state will award the license to the applicant who has more civic and philanthropic ties to the community. Points are awarded to applicants who can show previous experience in the marijuana industry.
  • Registered agents are highly trained: Training for registered marijuana agents covers everything from proper use of security measures to state and federal statutes regarding marijuana use. Agents are also taught the different strains of marijuana, methods of using marijuana, how to spot signs of marijuana impairment, how to prevent and address disturbances and clinical uses of marijuana, among other information.
  • Only some people can access facilities: Unless it’s a retail store, only registered agents and inspectors can be on the premises. If a visitor is not an inspector or registered agent, he or she must wear a visitor’s badge and be escorted by an agent.
  • Strict inventory control: Every facility has to complete daily beginning inventory. This includes the plant cutting, trim, flower, seed and quantity of THC. Cultivators of the plant have to document how many plants grew to maturity and how many failed. A physical audit of the inventory must be done by an independent body. That information must be kept on file for five years.
  • Don’t expect an Uber for marijuana anytime soon: Only registered agents can deliver marijuana products directly to a consumer. There are no provisions for a third-party delivery service. If retail stores contract with a service providing digital or other platform for delivery, that platform must be approved by the department.
  • No fake IDs: Registered marijuana agents who are making product deliveries must first verify customers’ age and identity by scanning a valid and unexpired document that has both the person’s photograph and date of birth. Examples include a driver’s license, identification card issued by the state, U.S. military identification card, a passport, tribal identification card or merchant mariner credential.
  • No pot to casinos: Marijuana stores are not allowed to deliver more than a total of 5 ounces of product to all the consumers they intend to serve on a single trip, and can’t furnish more than 1 ounce to any single consumer. They are only allowed to drop off cannabis to a private residence and are strictly prohibited from delivering marijuana to a consumer at any business that has a gaming license.
  • Sniffable samples: Cultivators can provide free product samples to stores in limited quantities, but those must be placed in a jar that’s sealed off and topped with a plastic or metal mesh screen. Samples must not be left unattended.
  • See no marijuana, smell no marijuana: Plants must not be visible from outside a cultivation facility and shouldn’t be visible from any public place by “normal, unaided vision.” Unless the crop is outdoors, it shouldn’t emit any odor that’s detectable from the outside.
  • No grab and go: Marijuana products cannot be sold in vending machines.
  • Advertising rules: Marijuana-related ads can’t be within 1,000 feet of public or private schools, libraries, playgrounds or public parks. Advertising also cannot be done in a way that is false or misleading; promotes overconsumption of the marijuana products; depicts actual consumption of the products; or involves or appeals to a child.
  • Clean-hands policy: The Department of Taxation lays out a detailed hand-washing policy for people working in cultivation facilities. Every time someone enters an area containing plants, before working with the plant, after using the bathroom, after coughing or using a tissue, or before donning gloves, workers must wash their hands for 20 seconds. That includes 15 seconds rubbing the hands together under water that’s at least 100 degrees Fahrenheit, and a paper towel must be used for drying.
  • The art of packaging: Any edible marijuana product must say, in bold letters on the package, “THIS IS A MARIJUANA PRODUCT.” The packaging also cannot be presented in a way that appeals to children, so that means no cartoon characters, mascots, action figures, balloons or toys can be incorporated in the design. In addition, the regulation forbids packaging that resembles candy.
  • Lights on: Regulations are particular about the lighting in marijuana businesses. Manufacturers must ensure that the lighting is at least “20 foot-candles” or 215 lux in intensity for general areas around the business, but at least 50 foot-candles or 540 lux in places where a worker is extracting concentrated marijuana, making products or working with tools such as knives or grinders. If any area of the business is dim or unlit, there must be a written policy explaining why.
  • A tough test: Regulators call for independent labs to test marijuana for 18 different things, including moisture content, potency, salmonella, yeast, mold and heavy metals such as arsenic, lead and mercury. The regulations list specific quantities of each that constitute unacceptable levels. Testing facilities must also quantify the amount of active ingredients such as THC and CBD, and the amount of “terpenoids” — chemicals that contribute to the aroma, flavor and color of plant products.
  • Organic weed: Marijuana products cannot be packaged and labeled “organic” unless the marijuana plants and all ingredients used are produced, processed and certified in a way that meets the national organic standards established by the U.S. Department of Agriculture.
  • Pot disposal: Before a business can throw away marijuana and related products, they must take steps to keep it from dumpster divers. The byproducts must be “rendered unusable” before they are tossed, meaning they’re ground up or mixed into other trash, such as food waste, yard waste, soil or plastic. The marijuana in this mixture must account for less than 50 percent of the total volume being thrown out. And the business must note in the seed-to-sale tracking database that it is getting rid of some of its marijuana inventory.

Soni Brown contributed to this report.


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