Top Ten FAQs Regarding Nevada Medical Marijuana

Given that today is the final day on which individuals can apply to the State of Nevada for a registration certificate to own and operate a medical cannabis business (what the state calls a “Medical Marijuana Establishment” or “MME”), it is only fitting that we share with you the top ten questions our Nevada cannabis lawyers get about Nevada’s MMJ regime.

1. From where will Nevada growers get their plants for their first harvest? Unlike most other states, Nevada’s Division of Public and Behavioral Health (“Division”) will not turn a blind eye regarding from where cultivation facilities obtain their genetics and plants for growing their initial crop. Instead, it fully expects cultivators to obtain their starting plants only from Nevada patients with a valid patient registration card (see NRS 453A.352 (5)). Nevada patients can currently possess up to twelve plants.

2. Does Nevada limit the number of plants per cultivation MME?  No, at least not so far, but the Division has made clear that it has the power to cap the number of plants (depending on patient demand for medicine) and that it will revisit this issue regularly as the market develops.

3. Does Nevada limit the total number of cultivation and production centers in the State? It does not, but it has the power to do so and it might at some point, depending on patient demand for medical marijuana. Cities and counties also have the power to limit the number of production and cultivation (and dispensary) MMEs in their own jurisdictions and it is important to know that if a city or county prohibits MMEs in its jurisdiction the applicant can still apply to the State for an MME registration in that city or county and the State will review it. But if the State forwards that application to the city or county and the city or county denies it based on its ban or MME limitations, the State will then deny it also.

4. Can we sell our MME registration certificates? No. There is no legal mechanism under LCB File No. R004-14 or NRS 453A that allows for this.

5. Can an MME bring in new owners after the State grants it a certificate of registration? No. Even after an MME receives a registration certificate its owners cannot sell their ownership interests to persons looking to buy into the business.

6. Can MME owners change their ownership percentages? The Division has indicated that it will determine this on a case-by-case basis. This means that you should first secure this approval before you engage in an ownership transfer between existing owners.

7. Can registered MMEs sell marijuana and marijuana infused/edible products to each other? Yes and no. MME producers and cultivators can sell marijuana and marijuana products to each other and to MME dispensaries. However, MME dispensaries cannot sell marijuana or marijuana products to each other.

8. Will prior city or county approval for your MME help secure approval from the State? No. Even though Nevada has embraced a local control model, where cities and counties must approve your MME facility (in addition to the State doing the same), you do not increase your chances of securing state approval for your MME facility by first securing that approval from your city or county.

9. Does Nevada have any “anti-monopoly” regulations specifically prohibiting unfair competition amongst MMEs? It does not. It has however said that it will look for potential monopolies in the applications it receives, but it has not said how it will deal with that sort of situation.

10. Can an MME dispensary obtain medical marijuana from MME cultivators and producers located outside of the dispensary’s county? The State says yes, but at least one county says no. In its local medical marijuana ordinance, Clark County mandates that “Medical Marijuana shall be obtained from a Cultivation Facility or Production Facility within Clark County if an adequate supply is available.” The County defines “adequate supply” as “the immediate availability of a sufficient quantity and quality of medical marijuana at a reasonable price of any specific strain of marijuana.”

This Clark County ordinance raises all kinds of issues if a Clark County MME dispensary obtains marijuana from production and cultivation facilities outside of unincorporated Clark County. The County states that “reasonable price” means “the price a purchaser, willing but not obliged to buy, would pay to a seller, willing but not obliged to sell, taking into consideration the average price on the open market for a specific strain of marijuana at the time of purchase” but has yet to define what constitutes “a sufficient quantity and quality” of marijuana, leaving the term “adequate supply” ambiguous.