Nevada Gaming Regulators Warn Against Medical Marijuana


Just as the application process for newly legal medical marijuana licenses has begun, Nevada’s Gaming Control Board (GCB) has issued guidance that should concern any current or aspiring gaming licensee who is also interested in the medical marijuana business. In a May 6, 2014 “Notice to Licensees,” GCB Member Terry Johnson advised that “the [GCB] does not believe investment or any other involvement in a medical marijuana facility or establishment by a person who has received a gaming approval or has applied for a gaming approval is consistent with the effective regulation of gaming.”

Although Nevada is one of twenty-one states, including the District of Columbia, to legalize medical marijuana, the federal Controlled Substances Act still outlaws the manufacture, distribution, or possession of marijuana for any purpose. (See 21 U.S.C. § 801 et seq.)  Noting that the federal government maintains that “the illegal distribution, possession, and sale of marijuana are serious crimes that provide a significant source of revenue to criminal enterprises,” the GCB’s Notice goes on to warn that “the Board believes that any such investment or involvement by gaming licensees or applicants would tend to reflect discredit upon gaming in the State of Nevada.” 

While the GCB’s Notice specifically addresses licensee or applicant involvement with medical marijuana enterprises approved under Nevada law, the broad language of the Notice suggests that the warning applies to any and all involvement with such businesses regardless of jurisdiction. This clear and unambiguous message from Nevada’s gaming law enforcement agency reveals the inherent conflict between state and federal law on the medical marijuana issue, and provides fair warning that when it comes to violations of federal law, the GCB is not willing to look the other way.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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