Nevada's Medical Marijuana Industry Poised For Growth

Aug 20, 2015

 Nevada's second medical marijuana dispensary opens its doors next week, but a state backlog has many patients still waiting to receive their cards. Even though the industry is in its infancy, our reporter Julia Ritchey tells us that demand is high. 

The new Sierra Wellness Connection dispensary is fairly inconspicuous in an office park off Second Street.

A receptionist greets you behind thick glass and a visitor's badge is required to go to the back. Inside, cannabis samples are kept under pristine display cases and glass bongs adorn the shelves next to t-shirts and hats.

"It's really kind of a neat experience here in Nevada because no one has expectations of what they think a dispensary is going to be, so we get to set those expectations," says Eva Grossman, who runs the dispensary.

She and her husband, Jeff, the shop's cultivation manager, moved from Florida earlier this year to get involved with Nevada’s burgeoning medical marijuana industry.

Eva says a bad accident three years ago left her permanently disabled and forced her to reevaluate her life.

"It was not until then that I really realized how powerful medicinal cannabis is for very difficult to treat pain, nerve pain, and pain that's not well-treated by conventional methods," she says.

Their dispensary is one of 10 approved for Washoe County, and the first of three for Reno.

A recent uptick in applications for medical marijuana cards has overwhelmed the state's Division of Public and Behavioral Health, which oversees the registry. Attempts to find out how many people are waiting for cards are greeted with this message: "Due to a recent surge in applications and staff vacancies … processing time for medical marijuana cards is between six to eight weeks."

Eva, who just applied for her own card, says she's fielded numerous calls and emails from customers trying to get one.

"I think there's kind of a surge of applicants at this time now that people realize dispensaries are actually here and you can go and shop in one," she says.

Jeff Grossman says Sierra Wellness is the first so-called seed-to-sale dispensary. They’re growing about 1,800 cannabis plants in a large warehouse at an undisclosed location separately from its retail space.

"We control all the way from the initial cutting, or seed, all the way through the sale to the patient," he says. "Everything is tracked single-system, therefore both the regulators and the state and us, as a business entity, can know anything about any lot or batch that is sold."

With startup costs in the six-to-seven-figure range, experts say it could be awhile before these businesses actually make a profit.

"It is still very slow going..."

That's Cece Stanton, founder of the local Cannabis Network for industry professionals.

"That's due to the state regulations changing and some of the requirements especially on the lab side, and that really put a delay on the cultivators being able to get the product to the dispensaries," she says.

Silver State Relief in Sparks was the first to open its doors three weeks ago. General manager Aron Swan says they've registered about 775 patients and averaged nearly 80 transactions a day — exceeding expectations.

That’s partially because they’ve already seen visitors from other places. Nevada is the only state that allows card holders from other states to purchase from its dispensaries.

"About 85 percent of our patient base is in Nevada, and about 15 percent is out of state," he says. "And of that 15 percent, I'd say about 90 percent are from Colorado."

The potential for this type of “pot tourism” is already drawing big-name investors. At Sierra Wellness, its executive team includes names like Steven Nightingale of the Nightingale Family Foundation and Joe Crowley, former president of the University of Nevada, Reno.

Steve Rausch is the vice president of the group. He says there’s been a steep learning curve over the last year for all involved.

"I think once this industry has been going on here for a few years and fully matured, like the gaming industry, we'll find a very robust and a very healthy industry," he says.

Their group plans to open another dispensary in Carson City later this fall and hasn’t ruled out more. Rausch says with more education on the benefits of medical cannabis, the once-forbidden treatment will go mainstream.