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Medical Marijuana and Gaming: To Divest or Not to Divest?

Even as more and more states pass laws permitting sales and use of medical and recreational marijuana, marijuana remains an illegal Schedule I drug under the federal Controlled Substances Act.

On May 6, 2014, Nevada State Gaming Control Board Member Terry Johnson issued a Notice to Licensees stating that “… the Board 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.” The Notice went on to illuminate the Board’s view that “any such investment or involvement by gaming licensees or applicants would tend to reflect discredit upon gaming in the State of Nevada.”

In its July 2014 hearing, the Board went further and made it clear that a person could not be in the gaming business if his spouse was in the medical marijuana business. In the Board’s view, there must be strict separation between the gaming and medical marijuana businesses.

Furthermore, in light of the civil forfeiture actions undertaken by United States Attorneys in various states around the country, the Board is seriously considering whether there are issues related to medical marijuana licensees lending money or leasing property to gaming licensees.

As a result of the board’s position, gaming licensees and gaming license applicants who have been awarded (or are pursuing) medical marijuana licenses must consider whether and how to divest from the gaming business.

© Copyright 2022 Dickinson Wright PLLCNational Law Review, Volume V, Number 153
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About this Author

Kate C. Lowenhar-Fisher, Dickinson Wright, Las Vegas, Gaming Lawyer
Member

Ms. Lowenhar-Fisher is a leading Nevada gaming attorney who counsels many of the world’s premier gaming companies on regulatory issues in connection with mergers and acquisitions, corporate restructuring, reorganizations and financings.  She has extensive experience advising clients on issues related to Internet gaming, social gaming, fantasy sports, liquor licensing, sweepstakes, contests, and promotions. She regularly represents individuals and businesses before regulatory agencies, including the Nevada State Gaming Control Board, the Nevada Gaming Commission, the...

702-550-4459
Jennifer J. Gaynor, Dickinson Wright, Carson City, Gaming Attorney
Member

Jennifer Gaynor represents clients before the Nevada Legislature in Carson City, Nevada. She also practices before various professional and licensing boards and state and local tax authorities, and represents clients on matters involving First Amendment law, public records and open meeting law, gaming law and regulatory agency actions.

Professional Involvement

  • Nevada State Chair, CARE

  • Board Member, Nevada Preservation Foundation

  • Member,...

702-550-4462
Gregory R. Gemignani, Dickinson Wright, Intellectual Property Lawyer
Member

Greg Gemignani's practice focuses primarily on intellectual property law, gaming law, technology law, internet law, online gaming law, and online promotions law. He has represented many clients ranging from the largest casino companies to start-up internet ventures.

Professional Involvement

  • Member, International Masters of Gaming Law

  • Member, International Association of Gaming Advisors

  • Member, Technology Business Alliance of Nevada

    ...
702-550-4468
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