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In 1931 the Nevada Legislature passed "The Wide Open Gambling Bill," which helped turn a nascent industry into a cornerstone of the state's economy. This past June the state passed a law that could do the same for another budding industry: medical marijuana. "It exceeds our wildest dreams," said Sen. Tick Segerblom (D), a sponsor of the law legalizing medical marijuana dispensaries in the state. Nevada voters amended the state Constitution to legalize medical marijuana a decade ago. But the new law authorizes the state to issue a limited number of licenses for marijuana dispensaries that will enable people to get their medicinal pot in a convenient and legal way. With medical marijuana already a multi-million dollar business in the state, the new law is sparking a lot of interest from potential investors. "When we wrote this law, we said we wanted to make it attractive commercially so that people with money and resources will come here and fight for these licenses," said Segerblom. "They're coming here in droves." Some big-money lawyers in the state are reportedly charging as much as $100,000 to prepare the required medical marijuana establishment application. "People are kind of shopping for consultants," said Lisa Mayo-DeRiso, a Las Vegas-based consultant. "A guy [called and] said 'I got your number and we have half a million dollars and we're looking to get an application.'" Back in June, Sen. Mark Hutchison (R) assured fellow lawmakers who were disinclined to support the measure: "This will not be the Dr. Feelgood hanging out in a Jerry Garcia smoking lounge with a giant pot flag hanging outside the door." The industry is actually attracting a range of investors, according to Las Vegas attorney Derek Connor, who said he used to focus on personal injury and criminal litigation but now spends three-quarters of his time working with medical marijuana clients. "It's taken over a huge area of my practice," he said. "We've seen people who are well-established, well-connected Nevada families down to housewives interested in this as a way to make money." It isn't easy to qualify for a dispensary license by the law's design. Applicants need to have at least $250,000 in liquid assets rather than a fixed asset like a house and have to pay licensing, background check and application fees. Preference is also given to applicants with business experience, an existing commercial or industrial facility and a record of paying taxes in the state, among other things. The law also sets strict guidelines for the verification of cardholders, tracking of inventories and quality control, and imposes a 2 percent tax on medical marijuana sales to help offset the cost of administering and enforcing those provisions. "The Nevada law strikes one of the most reasonable balances I have seen between ensuring safe access for patients, creating a tightly regulated model that is not open to malfeasance, and providing legitimate business and economic opportunities for business people," said Betty Aldworth, deputy director of the National Cannabis Industry Association. But the current market in the state is relatively small; only about 4,500 residents currently have medical marijuana cards issued by the state's health division, although the new law will allow cardholders from other states to shop at Nevada dispensaries when they open late next year, potentially making Nevada the first medical marijuana tourist destination. One of the main concerns of advocates and potential investors alike, the threat of federal intervention, has also largely been alleviated in recent months by comments from the U.S. Department of Justice. "The federal government had been demonstrating and recently made it abundantly clear that it will respect state marijuana laws when marijuana is being properly regulated," said Mason Tvert, director of communications at the Marijuana Policy Project. Still, local governments aren't done debating what kind of zoning restrictions they'll impose on dispensaries and other medical marijuana establishments. And state regulators could also impose stricter rules of their own, which has some concerned that all of the potential regulations will ultimately discourage investors. "A lot of people see this as a cash cow," said Peter Krueger, president of the Nevada Medical Marijuana Association. "I'm not so sure if it's a cash cow when government gets through with it." But Mayo-DeRiso said crafting regulations shouldn't be a problem for her state, which has been so successful in regulating the gaming industry. "We are the privileged license capital of the world," she said. "We know how to monitor privileged licenses, so we actually should be really good at this." (LAS VEGAS SUN, STATE NET)
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