Starting a Cannabis Business in Nevada

by | Dec 5, 2023

Starting a Cannabis Business in Nevada

Cannabis is a high-stakes industry—perfect for a place like Nevada. If you’re thinking about starting a cannabis business in Nevada, such as a dispensary, shop, or testing lab, there’s a lot to think about. This guide can help you get started on the right foot.

Nevada’s Cannabis Legalization Story

To understand the current Nevada cannabis market, let’s look at how we got here. The history of cannabis legalization in Nevada is unique, partially because of its status as a tourist destination.

Nevada banned marijuana in 1923 and was the only state to make possession of any quantity a felony. After two consecutive affirmative votes, medical use got the green light in 2000, but medical dispensaries were still illegal until 2013. For medical users, cultivation was the only option for many years.

Then, in 2016, Nevada voted to legalize recreational cannabis. Regulated retail sales became legal a few months later. Nevada is also one of the very few locations that permit onsite consumption lounges, which give tourists a venue to use cannabis while on vacation. As of late 2023, the only licensed consumption lounges so far are on tribal lands.

Nevada’s cannabis laws include a few interesting quirks. For example, recreational cannabis licenses can also serve as medical dispensary licenses. In addition, the state recognizes reciprocity for medical users with some out-of-state cards. And personal cultivation is only legal for cannabis users without a licensed retail within 25 miles of their home.

Otherwise, adults over 21 are free to possess, consume, and purchase controlled amounts of cannabis products.

Nevada’s Cannabis Market

Before you start a cannabis business in Nevada, it’s smart to research the market conditions. Here’s a quick overview.

According to state tax records, Nevada’s cannabis sales for the most recent fiscal year were around $850 million, primarily from Clark County. Interestingly, sales have been on a declining trend after peaking at over $1 billion in 2021.

This decline has been felt across the industry as more states legalize retail sales and product prices drop to stay competitive. In other words, the industry is maturing.

About 26% of Nevada adults have used cannabis within the past year. However, let’s not forget that Nevada attracts a lot of tourists, many of whom might be visiting from states that still prohibit cannabis use. The local market is substantial, but the national market may come right to your front door.

All told, there is a big potential audience for your new cannabis business in Nevada, but you’ll have to be smart about it. Even with tourists as an additional source of sales, you’re still facing heavy competition and a highly regulated industry with steep taxes.

So do your planning, but act swiftly and decisively.

How to Start a Cannabis Business in Nevada

The process of starting a cannabis-related business is largely the same anywhere adult-use retail stores are legal. For detailed information about these basic steps, refer to our “How to Start a Cannabis Business” guide.

  • Business Type: For example, you could be a retailer, lab, cultivator, manufacturer, or distributor. Another alternative is offering support services like packaging or marketing.
  • Planning: Resources like the Nevada Small Business Development Center can help establish the foundation of your venture. Outline your revenue model, legal structure, financial requirements, marketing strategy, and anything else you’ll need before you seek funding.
  • Location: Consider local zoning restrictions as you search for land or a building.
  • Legal Steps: Consult the Nevada Cannabis Compliance Board for regulatory guidance. You’ll need to apply for one of five licenses and renew it annually. Anyone working in the industry needs an Agent Card, which requires a background check and fingerprints. Plus, you must take the usual new business steps of registering your entity, receiving an EIN, etc. There are many legal hoops to jump through, so getting a lawyer involved is not a bad idea.
  • Insurance: Before opening, get comprehensive coverage for your assets, customers, and personnel. You’ll be glad you did if disaster strikes.
  • Financial Services: Due to the federal-level cannabis ban, getting loans or bank accounts from major FDIC banks can be challenging. Explore alternatives like local banks or credit unions, private lenders, or specialized industry institutions like FundCanna or Safe Harbor Financial.

Along your entrepreneurship journey, you’ll have to make plenty of other decisions about staffing, operations, suppliers, and so on. This is just a start. These foundational steps of starting a cannabis business in Nevada will set you on the path to success.

Nevada Cannabis Security Regulations

With a high-value product and lots of cash on hand, strong security is in your best interest. Not only is it a good idea—it’s also required by law. You’ll need:

  • Identification badges and visitor log
  • A single secure entrance
  • An intrusion detection system
  • Exterior lighting
  • Business security cameras with low-light capabilities recording entrances, vaults, point-of-sale areas, and limited access areas (plus storage for 30 days of footage)
  • Business continuity measures like power backups and failure notifications
  • A set of security policies that you share with any new employees
  • A security manager who conducts audits, trains employees, and evaluates third-party security services

Cultivation facilities have slightly different requirements, so read the fine print if you’re planning on being a cultivator. In addition to these security measures, you must inform local authorities of known breaches or system malfunctions.

It’s a lot to think about, but burglary, theft, and vandalism are formidable risks. This is where “better safe than sorry” really comes into play.

Deep Sentinel’s Cannabis Security Solutions

New businesses require time, resources, and hard work. But what if you could take one of your concerns out of the equation?

Deep Sentinel provides cannabis security solutions that far exceed state requirements to give your business superior protection. With live camera monitoring and intervention by professional guards, you can stop crooks before they reach your front door—all without lifting a finger.

And it’s not just for “high rollers” (pardon the pun). AI-enhanced surveillance is more cost-efficient and more effective at stopping crime compared to onsite security patrols.

Don’t let your new business become a target for crime. Trust Deep Sentinel’s pioneering blend of smart technology and real-time human response to safeguard your retail floor, grow room, and beyond.

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