Nevada Cannabis Board Disqualifies 60% Of Social Equity Lounge Applicants, Citing Residency Issues

The Nevada Cannabis Compliance Board (CCB) disqualified six applicants seeking to establish cannabis consumption lounges under the state's social equity category. This decision affects several entities that had hoped to gain a foothold in Nevada's cannabis sector in locations across Southern Nevada, including Las Vegas and Clark County.

CCB Audit Exposes Flaws In Equity Applications

The CCB’s decision came after an internal audit that revealed discrepancies in the eligibility of these applicants under stringent social equity criteria. The audit, called for by CCB executive director James Humm shortly after his appointment in December 2023, identified errors in the residency documentation required under the social equity provisions, as noted in a CCB press release dated July 2. These provisions were designed to benefit individuals and communities disproportionately impacted by previous cannabis prohibition laws.

"Eligibility requirements have been known since 2022," Humm said, according to The Nevada Independent, adding the applicants didn't meet the social equity [qualifications] as defined in the statute. The Social Equity Eligibility Worksheet released by the CCB in 2022 stipulates that to qualify as a social equity applicant, individuals must meet criteria related to ownership, residency in disproportionately impacted areas, and history with cannabis-related offenses. The requirements were based on data from the Neighborhood and Opportunity Atlas, focusing on areas affected by high poverty and arrest rates.

Humm, who has been at the helm of the board since January 2024, expressed his commitment to maintaining the integrity of the licensing process. “I wanted to make sure we got it right. This has been extraordinarily long, a lot longer than they would have anticipated.”

Six Nevada Cannabis Applicants Disqualified

The disqualified entities include NV Cloud 420 Lounge LLC, Lyxe Consulting LLC, and Royal Tree TLC LLC, all of which had proposed locations in Las Vegas. Two more, GGGCPA SE 3 Inc. and City Lights Production LLC, sought to operate in unincorporated Clark County, while GGCPA SE Inc. aimed for a spot in Nye County. Despite their preparation and anticipation, these applicants were found not to meet the necessary criteria outlined in the 2021 legislation aimed at rectifying the harms of past law enforcement disparities.

Read Also: Las Vegas’ Pioneering Cannabis-Friendly Hotel, The Lexi, Quietly Hits The Market Again

Four Las Vegas Firms Advance In Licensing

Meanwhile, four other applicants from Las Vegas successfully passed the audit and will continue in the licensing process. These applicants were MEDSnSIN, Sunflower Compassionate Company, Greenwood Investment Group LLC and N&D Enterprises LLP.

As the state progresses with its licensing, the CCB said it would refund the $2,500 application fees to all 20 applicants who are not advancing. The CCB plans to contact other eligible applicants to fill the six available spots.

First Cannabis Lounge Licensed In Nevada

In February, Nevada’s cannabis landscape reached a milestone when Smoke and Mirrors in Las Vegas became the first licensed cannabis consumption lounge. Located on Sammy Davis Jr. Drive as part of Thrive Cannabis Marketplace, it exemplifies regulatory compliance and serves as a benchmark for upcoming licenses under social equity provisions.

Read Next:

• The Road To Legal Cannabis: Unpacking Three Pillars For Success

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