On Dec. 20, 2022, the Clark County Board of Commissioners approved changes to the codes regulating cannabis to regulate consumption lounges. Here is what license holders can expect.
Application Requirements
Applications for lounges must be accompanied by several plans previously submitted to the Nevada Cannabis Compliance Board pursuant to NRS 678D.455. The plans must include: (1) adequate security and lighting at the lounge and adequate security at each entrance and exit, (2) protocols and procedures to deter customers from driving under the influence of cannabis, (3) protocols and procedures that ensure there is no unauthorized selling or distributing of cannabis and cannabis products, (4) a ventilation and odor mitigation plan pursuant to NCCR 15.055, and (5) an employee training plan pursuant to NCCR 15.045.
Duties
Consumption lounges also have several affirmative duties to operate. Lounges are subject to the same duties as other cannabis-related businesses as laid out in Clark County Code 8.65.160. However, lounges must also provide all menu items approved by the CCB to the department or keep them on site for review during inspections. Further, and in addition to pre-existing disposal requirements, cannabis lounges must dispose of and document all solid waste generated by its products including those products purchased but not fully consumed by its customers as customers may not leave the premises with any products purchased inside.
Unlike a bar on the Las Vegas Strip, customers cannot leave the lounge with what they bought and peruse the streets. This may lead to over-consumption by customers who do not want to dispose of a product they purchased. Lounges are required to train employees on overconsumption, pursuant to NCCR 15.055(2)(b), and lounge owners should pay particular attention to the risk of overconsumption considering this regulation.
What remains to be seen is what happens after a customer leaves the consumption lounge. Will the streets surrounding the lounge become hot points for law enforcement to patrol? What liability falls on the consumption lounge for a customer who leaves intoxicated and is thereafter injured or causes another to be injured? Do the employees have a duty to stop the customer from leaving? Order an Uber? Take their car keys? Call law enforcement?
Limitations
Further, commissioners amended the code to create several limitations on the operation of consumption lounges. These lounges must not allow: (a) The consumption of cannabis or cannabis products at any place which is within view of a public place; (b) The entry of any person who is less than 21 years of age to the cannabis consumption lounge; (c) The consumption of any cannabis or cannabis product in the cannabis consumption lounge that is not a single-use cannabis product or ready-to-consume cannabis product; (d) A single-use cannabis product or ready-to-consume cannabis product that was purchased at the cannabis consumption lounge to be removed from the premises of the cannabis consumption lounge; (e) Any vehicle to be towed from the premises of the cannabis consumption lounge for at least twenty-four (24) hours after it is parked on the premises, except in limited cases; or (f) The sale of any cannabis or cannabis products within two (2) hours of the close of each day’s business, if applicable. Further, the lounges may not permit consumption of cannabis products purchased outside of the lounge.
Some limitations were of concern during the public comments period. Layke Martin, Executive Director of the Nevada Cannabis Association, expressed concerns about the unintended negative consequences of the 2-hour last call requirement and the 24-hour no tow policy. Particularly Ms. Martin expressed concern about revenue during the final two hours of business operations and the hardships that may be posed by finding properties willing to abide by the no-tow policy. Of further concern is the “except in limited cases” language provided in the no-tow policy. The contours of these limited cases appear to be ambiguous at best, leaving consumption lounges in a predicament if a vehicle that needs to be towed falls within the 24-hour window.
Sales and Consumption
Finally, the Codes lay out what may and may not be sold within both retail lounges and independent lounges. A retail lounge is attached or immediately adjacent to a cannabis retail store, and an independent lounge is not. Both types of lounges are permitted to sell food and non-alcoholic beverages, other items consistent with NCCR 15.030, and provide live entertainment with a permit from the director. Retail lounges may only sell single-use and ready-to-consume products from the store to which it is attached or immediately adjacent. Independent lounges will need to enter a contract with one or more retail cannabis businesses to sell cannabis products that are single-use and ready-to-consume.
While the code permits the sale of food, how will local health codes and the current ban on smoking indoors at a restaurant impact lounge operation? The Nevada Clean Indoor Air Act currently prohibits smoking e-cigarettes, vapor products, and tobacco in indoor areas of restaurants. But does the act extend to cannabis consumption lounges? While most restaurants that allow smoking have outdoor patio areas, the Clark County codes specifically prohibit the consumption of cannabis in areas within view of the public.
The views and opinions expressed in the article represent the view of the authors and not necessarily the official view of Clark Hill PLC. Nothing in this article constitutes professional legal advice nor is it intended to be a substitute for professional legal advice. Should you seek legal advice particular to your needs, do not hesitate to contact abarnum@clarkhill.com.