Nevada is forfeiting roughly $80 million in annual cannabis tax revenue by maintaining strict barriers between its marijuana and gaming industries, according to a University of Nevada Las Vegas (UNLV) Cannabis Policy Institute report that also found the rules push consumers toward illicit products.
The findings were presented at UNLV’s Cannabis Policy Institute and International Gaming Institute’s 3rd Annual Gaming & Cannabis Policy Discussion. The report, titled “The 1,500 Foot Wall,” identifies three regulatory barriers: prohibitions on marijuana deliveries to most hotels and gaming properties, a ban on cannabis retailers within 1,500 feet of gaming establishments in major counties, and restrictions preventing gaming licensees from participating in or profiting from the licensed cannabis sector.
Those constraints cost cannabis businesses an estimated $750 million in annual revenue — $540 million from retail and $210 million from wholesale. The $80 million annual tax shortfall is what Nevada forfeits by keeping the industries apart.
“The cannabis-gaming barriers are currently preventing millions of Nevada consumers from accessing legal cannabis,” the report states. “All of the cannabis sold [in gaming areas such as the Strip] is unlicensed, unsafe cannabis from the illegal market.”
The authors also concluded that legal cannabis businesses are “struggling to survive as a result of their severely limited access to tourists,” and that “the original separation between cannabis and gaming was a rational precaution in 2014. A decade later, it is an economic and policy anachronism.”
Nevada Sen. Rochelle Nguyen (D) said at the policy discussion, according to The Las Vegas Review-Journal, that treating cannabis as separate from tourism was “naive, inaccurate and not what’s happening out there in the tourism corridor,” adding: “We got this wrong in some areas. We had good intentions, but as we move forward, this industry is changing.”
A prior UNLV poll found about seven in ten American adults support designated marijuana consumption areas at casinos and resorts, with two in five saying cannabis access would make them more inclined to visit.
Cannabis is legal for adults 21 and older in Nevada, including tourists. The state’s first legal marijuana consumption lounge opened in February 2024 under a 2021 law sponsored by Assemblyman Steve Yeager (D) and signed by then-Gov. Steve Sisolak (D), which also permits cannabis-integrated businesses offering yoga, infused food, and THC-aided massage therapy. Nevada also more than doubled its legal possession limit to 2.5 ounces at the start of 2024.
