Cannabis lounges were once seen as a promising new frontier in Nevada's legal marijuana industry — the bedrock of a new Amsterdam-like weed tourism district in a Sin City on the cutting edge of hospitality innovation.
But four years after lawmakers opened the door for the businesses that offer the only place outside of a private home where people can legally consume cannabis — and one year after the business experiment began — the vision for dozens of barlike destinations has been a decided bust.
Just a single state-licensed consumption lounge remains open.
Experts point to a variety of reasons why the concept hasn't succeeded or given the predicted boost to the legal cannabis industry, which has seen taxable sales decline 17 percent since 2021. There are stringent regulations, a high financial barrier to entry, and a good old-fashioned dearth of consumer interest in the model.
Christopher LaPorte, a partner of RESET Hospitality, a Las Vegas-based cannabis consulting firm, is advising clients to create a business concept where consuming cannabis is not the primary focus.
"What we learned over the past year is that venues open today appeal to a traditional cannabis consumer, and that is not enough for these to be viable businesses," LaPorte said. "What we're trying to figure out is how do you make a venue that's approachable to a larger tourist market and a larger local market."
That view has also been expressed nationally.
"I haven't seen consumption lounges succeed in any widespread way anywhere in the country," said Robin Goldstein, an economist at the University of California, Davis, who studies consumer behavior in the cannabis, food, wine and beer industries and who has visited the two Las Vegas lounges located in industrial areas just west of the Strip. "(The businesses) have to be more than just a place to sit around and smoke weed, or else you face the same challenges as anyone who wants to open a bar. You have to have a great concept or you lose your audience."
His assessment was confirmed last week.
Smoke and Mirrors, which opened in February 2024 inside the Thrive Cannabis Dispensary, closed April 4. Thrive operators said they plan to turn the space into a special event venue.
The lounge "maintains an operational license," the Cannabis Compliance Board (CCB) said in a statement, and recently notified the agency "regarding a change in hours of operations." But the board doesn't publicly break out how much lounges do in sales — with only two of them last year, that would raise taxpayer privacy concerns.
The CCB did report $829 million in taxable sales from 106 retail locations during the 2024 fiscal year that ended in June. The overall figure was down 17 percent from 2021.
Scot Rutledge, a partner in RESET, which consulted with Smoke and Mirrors ahead of its opening, said his firm offered suggestions for the venue that he believed would have made the lounge successful.
"For whatever reason, that business model did not succeed," Rutledge said. "These cannot be (just) cannabis venues. They need to be hospitality businesses where cannabis is something that you can choose to participate in."
The closure leaves Dazed!, which is inside the Planet 13 Dispensary complex, as the only open state-licensed consumption lounge.
The Las Vegas Paiute Tribe operates Sky High consumption lounge as part of its NuWu Cannabis Marketplace near downtown, but because the location is on tribal land, the Paiutes have their own board that oversees the facility through a compact with Nevada and is not under the CCB's jurisdiction.
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