Fourteen years after Nevada voters approved the use of marijuana for medical purposes, the local government for Las Vegas is preparing to license cultivators, producers and dispensers of the drug. It’s a business that promises to be lucrative, and the list of prospective investors is impressive. A judge, a former mayor, a newspaper publisher and a bevy of political insiders and lobbyists, a big-time Republican power broker among them, they all want in.

This being Nevada you’d expect a fair number of gaming operators to be after their share of the action too. But participants in the state’s No. 1 industry have been warned not to expect it.
The state’s voters approved the medical use of marijuana in 2000, but the law provided no way for patients to obtain the drug except to grow it themselves. Last year, the Legislature approved a measure establishing a framework for distributing it. 

San Francisco-based Arcview Group, which has studied legal sales nationwide, says the Nevada market could be worth $9.6 million this year. And if state follows the lead of Colorado and Washington in allowing recreational use, the market could be exponentially larger.
“There’s no way to calculate exactly what it’ll be worth, but it’ll be worth a helluva lot of money,” said state Sen. Tick Segerblom, a Democrat representing Las Vegas and author of the medical marijuana bill in the 2013 session of the Nevada legislature. 
It’s a dilemma for the Nevada Gaming Control Board, which is concerned about the federal repercussions. Under U.S. law it is a crime to grow, possess or distribute the drug, and the board has spent the last several weeks discussing its concerns with gaming license holders and those applying for licenses.
“We would be remiss if we didn’t consider that activity as part of the [license] investigation. It’s a gamble and you need to think it through,” said Control Board Chairman A.G. Burnett.
State Sen. Greg Brower, a Reno Republican who supported the 2013 bill, said Nevadans who want to participate in the business are caught in the middle until the federal government either decriminalizes the drug or removes the felony penalties surrounding it. 
“This is another example of an unintended consequence from the inconsistencies with the law,” he said. “I voted for it, but I had significant reservations. My reservations have increased.”
Last year, the U.S. Attorney’s Offices in the 21 states that have medical-use laws on their books issued letters restating the federal government’s position, and the Department of the Interior re-emphasized that opposition earlier this month by banning the use of water resources under federal management for irrigating pot crops.
Clark County, which includes Las Vegas, became the first southern Nevada jurisdiction to accept applications for marijuana-related businesses after approving regulations in March, and with the commission scheduled on 5 June to hold initial public hearings on the suitability of some 187 would-be growers, producers and dispensers, the Gaming Control Board has posted on its Web site a statement of what Burnett termed “a clear understanding of our position”:
“The board does not believe investment or other involvement in a medical marijuana facility or establishment by a person who has received a gaming approval or applied for a gaming approval is consistent with the effective regulation of gaming. Further, the board believes that any such investment or involvement by gaming licensees or applicants would tend to reflect discredit upon gaming in the state of Nevada.” 
The board has yet to spell out the consequences of such involvement, and it was not clear, according to published reports, whether that might include disciplinary action.
“It’s just too early in the process to even talk about anything,” said Tom Mikovits, a marketing manager for Real Gaming, the online poker site of casino honcho Michael Gaughan. Mikovits is listed as a manager of Wellness Connection of Nevada, which has applied for licenses as a cultivator, producer and dispenser. He doesn’t hold a gaming license but is considered a key employee for regulatory purposes and was reported earlier this month to be divesting himself of involvement with Wellness in light of the Control Board’s advisory. 
Others in the industry had not indicated how they would respond. They include:
M Resort President Anthony Marnell III, who owns a 71 percent stake in Clear River LLC, which has applied for cultivation and production facility licenses.
Casino developer Gary Primm and his son Roger Primm, partners in a company called Deep Roots Medical, which has applied for approval as a dispenser. (Republican political heavyweight Sig Rogich is a minority investor in Deep Roots. Head of one of the state’s most powerful public relations firms and lobby shops, he was a senior advisor to Ronald Reagan and George H.W. Bush, progenitors of today’s tough federal drug laws, and worked eight years ago to defeat a ballot initiative in Nevada to legalize marijuana outright.)
Brothers Troy and Tim Herbst, owners of slot machine route operator JETT Gaming, are investors in The Clinic Nevada, an entity that has applied for cultivation and dispenser licenses.
Armen Yemenidjian, a vice president of casino marketing and operations at Tropicana, holds a 40 percent stake in Integral Associates LLC, which has applied for five licenses as a cultivator and dispenser. Yemenidjian is the son of Tropicana President Alex Yemenidjian.