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Politics and Policy

Nev. Pot Industry Continues to Move Forward Despite Federal Fears

Paul Boger


This week, Nevada regulators approved the final set of rules that will govern the state’s recreational cannabis industry. The regulations come after U.S. Attorney General Jeff Sessions recently announced that the Justice Department has rescinded a set of internal memos that allowed states to create and regulate cannabis themselves. But as Reno Public Radio’s Paul Boger reports, despite the uncertainty, Nevada’s newest commodity continues to grow across the state.



If you walk into the cultivation facility owned by Sierra Well in Reno, one thing hits you immediately, the smell of pot. It’s not overpowering, but it is noticeable.


"When I first walked in here, I would get rashes and I'd become sort of allergic. But we went through incredible length to design H-Vac systems with tremendous redundancy on the filtration system," said Fernando Leal, the CEO of Sierra Well, formerly Sierra Wellness Connection. The company also owns two dispensaries in Reno and Carson City.


He says the 11,000 square foot facility produces hundreds of thousands of dollars’ worth of product every couple weeks.


"Our rooms are really populated with multiple different strains, and the strains that we grow are really predicated on the demand we see in our dispensaries," Leal said.


Now his facility, and roughly 275 others, in Nevada, are in jeopardy.


Earlier this month, U.S. Attorney General Jeff Sessions issued a memo to the Department of Justice rescinding what has become known as the Cole Memorandum. It was an Obama-era decision that told federal prosecutors not to go after marijuana businesses that are compliant with their state laws.


That decision left an industry already working in a legal gray area with even more questions.


"There's over $150 million in taxes that won't be collected," says Democratic Nevada State Senator Tick Segerblom of Las Vegas.


Segerblom has become known for his work championing legalized marijuana around the state.


"There's 6,000-and-some jobs that won't be legitimate, won't have benefits, pay taxes or things. There's is really no reason to try to shut it down because you can put the genie back in the bottle."


And he’s not far off. According to the state department of taxation, pot has brought in more than $37 million in tax revenue, exceeding expectations. That's just between July 1st and the end of November.


Furthermore, the industry employs roughly 8,700 people around the state.


Department Director Deonne Contine says as long as there is an industry, it'll be her job to regulate it.


"As long as there are businesses that are operating [and] as long as there is somebody above my level that hasn't said we're going to shut this down -- and I don't anticipate that happening -- we have to do the things day-in and day-out that that we're required to do under the initiative and the regulations," Contine said.


Governor Brian Sandoval and Attorney General Adam Laxalt, both Republicans, have issued statements saying they will continue to review how Session's announcement will affect Nevada.


Other states, including California and Colorado, have taken stronger positions, vowing to fight the shift in federal enforcement.  


But some around Nevada aren’t taking chances.


In November, Elko County Commissioners including Cliff Eklund voted against allowing any marijuana establishment from operating in the county.


"I would like to see, if it's going to be against the federal law, make it against the federal law nationwide and enforce on the states," said Eklund.


But if Congress does take action and votes to officially allow states to control their own pot industries, then Eklund says the commission may reverse its previous decision.


And that’s what some in the industry, like Sierra Well CEO Fernando Leal, are hoping for.


"I think that there is a tremendous amount of gray-area. I've been in business for 33 years, I've never heard the term gray-area in business until I reentered the cannabis industry," Leal said. " So, I think anything that's going to drive conversation and get people talking about what needs to be done and to take a side, I think is ultimately is going to be a net-positive for the industry."


Until Congress acts, officials in Nevada say they will continue forging ahead despite these murky waters.



It was recently reported by the Nevada Independent that Democratic State Senator Tick Segerblom has a seat on the board of a Canadian-based marijuana company which operates a facility in North Las Vegas.