By Brian Bahouth

Nevada’s biennial 120 day legislative session marked its first major deadline Friday at midnight when all proposed legislation had to pass from the committee in which it was introduced or die without an exemption; and when a furious day at the Legislature was over, as many as 14 marijuana bills remain active.

Since the passage of Ballot Question 2 (BQ2) last November, state Senator Tick Segerblom (D-Las Vegas) and other lawmakers have written and sponsored numerous bills this legislative session intended to aid the smooth implementation of BQ2, which legalizes the adult possession of cannabis and mandates a system to tax and regulate marijuana businesses.  Several critical bills were granted an exemption from Friday’s deadline.

Senate Bill 302 is a key piece of legislation that would open the state’s system of medical marijuana dispensaries to the general adult public on or around July 1 of this year.  The proposed move is intended to prevent the formation of illegal markets while it is legal for an adult to possess and use marijuana in Nevada but there is nowhere to legally buy it.  The Nevada Department of Taxation has until January 1, 2018 to adopt and implement final regulations, but the bill that would enact the early start is still active and assigned to the Senate Revenue and Economic Development committee for assessment of its fiscal impact.

Senate Revenue and Economic Development is also considering Senate Bill 508, the legislative instrument that would enact the 10 percent excise tax Nevada Governor Brian Sandoval proposed in his 2017 state of the state address.  The measure would impose a 10 percent tax at the point of sale and direct the money to the state’s State Distributive School Account in the State General Fund.

Assembly Bill 463, sponsored by Assemblyman Nelson Araujo (D-Las Vegas) was voted out of the Assembly Taxation committee on April 13.  This bill is meant to implement a 15 percent excise tax as mandated in BQ2.  The 15 percent tax would be levied when a cultivator sells cannabis to a processor or retailer, and the value of the marijuana would be based on an average price or its “fair market value” as set by the Department of Taxation.  And of no small import, AB 463 also has a provision to limit the amount and terms of fees a municipality could charge for cannabis business licenses and permits.

The transfer of the Nevada Division of Public and Behavioral Health (NDPBH) of the Department of Health and Human Services to the Department of Taxation was proposed in both Senate Bill 329 and Assembly Bill 422.  According to bill sponsor Senator Tick Segerblom (D-Las Vegas), SB 329 remains active in the Senate Revenue and Economic Development committee with an exemption from the deadline, though Segerblom said the bill will be amended, and should it be amended to remove the transfer of NDPBH to the Department of Taxation, Assembly Bill 422 contains language to effect the transfer of marijuana regulation for both medical and adult use to the Nevada Department of Taxation and more.  AB 422 is an omnibus bill and would do away with the issuance of a medical marijuana card and make it so the state maintains a list of medical patients dispensaries would access.  AB 422 would also end the administrative fees associated with getting a medical marijuana authorization and make it easier for an out of state patient to use Nevada’s medical marijuana system.

Senate Bill 487 is alive and in the Senate Revenue and Economic Development committee where lawmakers and Legislative Counsel Bureau analysts are weighing the fiscal impacts of the bill that would impose a 10 percent tax on marijuana products at the point of sale and divvy the money up between a mix of the state’s Distributive School Account, local governments, and substance abuse programs.  Money from the tax would also be set aside to fund the administration of the system.

Assembly Bill 259: to vacate a court order or judgement effectively means to render in null and void, cancelled; so AB 259 would authorize a court to grant a motion to “vacate a judgment of conviction  if: (1) the judgment is a conviction for a violation of any provision of law concerning certain offenses involving marijuana and the act constituting the offense is a lawful act in this State on or after January 1, 2017; and (2) the court notifies the prosecuting attorney who prosecuted the defendant for the crime and allows the prosecuting attorney to testify and present evidence before the court decides whether to grant the motion.”

AB 259 would allow courts to depart from mandatory drug sentence minimums when hearing a marijuana case, so “if a person is convicted of knowingly or intentionally possessing a controlled substance and the penalty for such possession requires that the person serve a minimum term of imprisonment, the court is authorized to depart from the prescribed minimum term of imprisonment in certain specified circumstances.”  And those circumstances are when a person is convicted of possessing one ounce of cannabis or less or if the act is lawful after January 1, 2017, the date Ballot Question 2 went into effect.

Senate Bill 341 is an omnibus bill that would make needed additions to the dimensions of legal cannabis in Nevada set out in the language of BQ2.  The bill would allow municipalities to ask the state for more cannabis business licenses than is allowed under current law, but more, SB 341 would direct the University of Nevada School of Medicine to seek federal approval “to establish a program of research relating to the medical use of marijuana and, upon receiving such approval, establish the program of research.” The bill would also enable any institution of the Nevada System of Higher Education to seek federal approval to conduct research on the medical properties of marijuana.

Senate Bill 396 has become the hemp bill.  Lynn Hettrick is administrator of the Nevada Department of Agriculture’s plant industry division, and earlier in the legislative session he gave a presentation on hemp to the Senate Judiciary committee, and the central provisions of SB 396, as amended, were born.  SB 396 would create a pilot program intended to establish industrial scale production of hemp in Nevada, separate from the agricultural pilot program already underway and meant to build a Nevada-based hemp seed stock.  Currently hemp seed is excruciatingly expensive and tightly regulated by the US Drug Enforcement Agency, so the development of a regional seed stock is an emphasis for state agriculture officials.  The bill would also allow Nevada hemp products to be sold in Nevada dispensaries, to include hemp oil.

Senate Bill 416 would effectively authorize budtender apprenticeship programs, or more officially, SB 416 would authorize, “a medical marijuana establishment or an association of medical marijuana establishments to propose and enter into an agreement to carry out a program of apprenticeship for medical marijuana establishment agents;”

Senate Bill 236 would allow Nevada municipalities to authorize cannabis clubs and events where cannabis can be openly consumed.  SB 236 would authorize municipalities in Nevada to “require a person who wishes to operate a business in which the use of marijuana is allowed or to hold a special event at which the use of marijuana is allowed to obtain a license or permit.”  The bill is enabling legislation and does not mandate local governments do anything.  The measure would allow municipalities to license a wide variety of venues where cannabis can be publicly consumed, should a local government decide to do so.

No one under the age of 21 would be permitted in a club or event licensed to allow the open use of marijuana.  Bill language prohibits a cannabis club or event from being located within 1,000 feet of a public or private school or community facility, and cannabis must be consumed in an area, “which is not viewable from any public place.”

The bill would authorize municipalities to collect a fee for the issuance of licenses and special event permits, “which does not exceed the fee charged for other special event permits.”  And while SB 236 as written also grants municipalities wide latitude to regulate and license the time, place and manner of cannabis clubs and events, it prohibits a municipality from arbitrarily limiting the number of licenses or permits issued.

Senate Bill 236 would allow the consumption of both alcohol and cannabis in the same location, and Nevada is uniquely positioned among all the states to allow and regulate the indoor consumption of smokable cannabis products.  Nevada is the only US state to allow any form of indoor tobacco use.  The Nevada Clean Indoor Air Act allows smoking on casino gaming floors where children are prohibited from loitering and in bars that do not serve food, and because of these liberal indoor smoking laws, Nevada is uniquely positioned to authorize and regulate the public consumption of cannabis.

See a full report on SB 236 here.

Senate Bill 344: members of the Senate Judiciary committee unanimously approved a measure that would establish new, more strict guidelines for edible cannabis products in Nevada.  Senate Bill 344 would affect both medical and “recreational” edibles: Bill highlights:

  • The product must be sold in single serving packages.
  • Marijuana edible products must be labeled in a manner which indicates the number of servings of THC in the product, measured in servings of a maximum of 25 milligrams per serving, and includes a statement that the product contains marijuana and its potency was tested with an allowable variance of the amount determined by the independent testing laboratory which performed the testing.
  • The marijuana product cannot be packaged or labeled in such a way to appear to be candy appeal to children or contain an image of a cartoon character, mascot, action figure, balloon, fruit or toy.
  • Any brand of cannabis infused edibles cannot be modeled after a brand of products that are primarily consumed or marketed to children.
  • Marijuana cannot be infused in a commercially available candy or snack food item.
  • The product cannot be sealed in a transparent bag or container.
  • With regard to the advertising of products … the advertisement shall not be made to appeal to a children.
  • Provisions are laid out for both medical and recreational marijuana.  Should the bill become law, the rules for medical cannabis edibles would take effect on July1, 2017, and rules for adult use edibles would take effect on January 1, 2018, the deadline for implementation of Ballot Measure 2.

See a full report on SB 344 here.

Senate Bill 374, is a measure that would prohibit “a professional licensing board from taking disciplinary action against a licensee who holds a registry identification card or engages in certain lawful activities relating to marijuana; prohibiting an employer from taking adverse action against an employee for expressing opinions relating to marijuana.”

The bill language notes that it is currently unlawful for a Nevada employer to take action against an employee or prospective employee “on the basis of the employee’s lawful use of any product outside the premises of the employer during the employee’s nonworking hours, if the use does not adversely affect work performance or the safety of other employees.”

Senate Bill 374 would also prohibit an employer from taking action against an employee or prospective employee who expresses an opinion about marijuana.

Senate Bill 375 authorizes “the Governor of Nevada or his or her designee to enter into agreements with Indian tribes in Nevada relating to the regulation of the use of marijuana.”  In short, tribal marijuana businesses could then be licensed and regulated as part of the state’s rules governing both medical and adult use cannabis, so the bill would allow the state to exercise limited regulatory and criminal authority on tribal land.

Federal guidance contained in the “Cole Memo” and the “Wilkinson Memo” enable tribal governments to implement their own programs for the regulation of marijuana on tribal lands, which some see as a potential source of regulatory and law enforcement conflicts with state and local authorities, so this bill allows the state of Nevada to license and regulate tribal marijuana businesses under regulations currently being written and adopted by the Nevada Department of Taxation.

During an April 6 hearing in Senate Judiciary on SB 375, a group of tribal representatives came forward as the Nevada Tribal Cannabis Alliance, and several described the positive economic potential legal and regulated marijuana presents for their communities.  Thirteen of the state’s 19 federally recognized tribes are in the Alliance:

Las Vegas Paiute Tribe
Fort McDermitt Pai-Sho Tribe
Yerington Paiute Tribe
Duckwater Shoshone Tribe
Walker River Paiute Tribe
Confederated Tribes of Goshute
Reno-Sparks Colony
Wells Band Colony
Elko Band Colony
Ely Shoshone Tribe
Moapa Paiute Tribe
Pyramid Lake Paiute Tribe
Timbisha Shoshone Tribe

What’s next?

The next step for these many bills is a full vote of either the Assembly or Senate, depending on the chamber of origin, and should a bill pass, it would be transmitted to the opposite house for another round of committee hearings and possible amendments.  And in a Legislature where Democrats control both the Assembly and the Senate, these cannabis bills will likely make it through the legislative process by the end of the session on June 5, barring significant stakeholder opposition, but then the question becomes, will Governor Brian Sandoval sign them into law.