RENO, Nev. — For Mark Pitchford and Steven Duque, starting up a recreational cannabis business in Nevada — even only months after the drug’s legalization — can be a fairly easy endeavor.
However, while they laud Nevada lawmakers for setting up a fair set of parameters for legalized marijuana sales, Pitchford, CEO of Las Vegas-based KYND Cannabis Company, and Duque, co-owner and vice president of Greenleaf Wellness in Sparks, agree there are still wrinkles the industry needs to iron out.
One chief concern, because recreational cannabis still is illegal under federal law, is that dispensaries are only able to do cash transactions.
Duque said constantly making sure Greenleaf has enough cash on a daily basis is a challenge.
“For me, it’s horrendously difficult just to go down to a bank and purchase change,” Duque said.
KYND Cannabis Company — buoyed by its two Nevada-based cannabis companies, Tahoe-Reno Botanicals and Tahoe-Reno Extractions — partners with several dispensaries in the state (MYNT in downtown Reno, for example, as well as Silver State Relief in Sparks, among others) that offer ATM machines on site.
Still, Pitchford believes that the Nevada Legislature or state financial institutions can come up with a more efficient type of payment solution, though he admits that will take an investment of time and money.
“I think Nevada has the opportunity to approach credit unions and private (companies) and take that next step,” Pitchford said. “We pay these entities, but I can’t have a bank account. The money is transferred from my hands to their hands, but I do think it will change over time.”
Currently, federal marijuana law prohibits banks and credit unions from engaging in monetary transactions.
However, just this week, Forbes reported that a bipartisan group of 10 U.S. senators are pushing for a measure that would prevent federal officials from financial institutions from providing services to a cannabis-related business.
The measure, led by Sens. Jeff Merkley (D-Ore.) and Lisa Murkowski (R-Alaska), would prevent federal officials from punishing a financial service provider “solely because the depository institution provides or has provided financial services to a cannabis-related legitimate business,” according to the Forbes article.
It’s reportedly an amendment to a larger bill being considered on the Senate floor this week that would remove some restrictions that were enacted on financial institutions as part of the 2010 Dodd-Frank Act. The U.S. Senate is tentatively scheduled to vote on the amendment this week.
Maneuvering around the challenge of dealing in the cash-only cannabis business was one of several topics that Pitchford and Duque discussed as part of a panel discussion at a special NCET luncheon on Feb. 28 at Atlantis Casino Resort Spa.
Other speakers were Karena Dunn, an attorney at the law firm Larry K Dunn & Associates; and Chad Strand, chief operating officer and co-owner of Blackbird Logistics Corp.
Aside from addressing the money management aspect of the industry, panelists said they want legislators to address options for public consumption in public places. Currently, it is illegal to consume marijuana or cannabis publicly, on federal land or inside vehicles.
Laws against public consumption hurt the business, panelists said, because tourists who come to Nevada for the experience of smoking (or otherwise consuming) marijuana may be afraid to do so.
“We need to change the laws where cannabis can be consumed (to include) a portion of a public facility like this (the Atlantis, as an example), to increase sales,” Dunn said, adding the first step is the county level. “Everyone is afraid to use it, so we want to legalize in it various areas in the cities.”
Another area the panel discussed as difficult is in marketing marijuana. State law restricts what kind of imagery those in the cannabis industry can use on billboard or print ads. For instance, no children or animals can be depicted in any advertising campaign.
Strand’s Blackbird Logistics, a statewide distributor of cannabis to homes and dispensaries, said cannabis marketing restrictions make things difficult. “We had a marketing team at a dispensary partner in Vegas threw their hands in the air and say ‘we quit,’ and our social media gets shut down every other month,” Strand said. “It’s extremely challenging, but in navigating it, you have to be very creative.”Those who operate cannabis dispensaries in Nevada are also monitoring other issues, such as the legalization of recreational marijuana in California and how it might impact the industry across the state line.
But there’s a sense that California’s laws will be much more complicated, panelists said, and the infrastructure will be tougher to implement.
Plus, competition from another state can keep prices on products down for the consumer, Pitchford said.
“That’s what I see, and it will create more competition between Nevada and California dispensaries,” he said.
