One of the most popular tourist destinations in the United States, Las Vegas is known for its sinful vices, gambling, strip clubs, and as of January 1, 2017, cannabis.
Following legalization, nearby states profited immensely from the tax revenues generated from cannabis sales. A surprise to no one, Nevada’s marijuana tax revenue exceeded $74 million in the first year alone. Interestingly, much of that revenue stems from cannabis tourist attractions.
Vegas is cashing in in a big way, utilizing its world-renowned status to market toward cannabis connoisseurs, first-time cannabis users, and tourists from all over the world. Some of the trendiest activities include visiting cannabis supercenters, cannabis-themed restaurants, and dispensary and grow house tours.
COVID’s Effect on the Cannabis Industry
Vegas relies on the more than 42 million tourists to maintain its economy, so when COVID-19 (COVID) hit in March, it became one of the hardest-hit cities in the world.
Casinos, restaurants, and entertainment venues shuttered, leading to a massive wave of layoffs across the city. In the midst of the pandemic, the cannabis industry caught a break– it was declared an essential business.
The local cannabis industry relies on Vegas for more than 70 to 80 percent of sales. With the city deserted, cultivators faced tough decisions, being forced to slash their prices in half or risk losing product. Unlike cultivators, production companies creating products like edibles, are able to store their products until the market becomes profitable again, oftentimes mitigating revenue loss.
Initially, dispensaries saw an upsurge in sales due to panic buying. In turn, cultivators were able to sell their products at a higher price until the government declared cannabis businesses as essential and sales subsided. In order to move the product, cultivators dropped their prices and began selling out at discounted rates.
COVID’s Impact on Cannabis Cultivators
As it became clear that cannabis cultivators were going to continue working, measures were put in place to protect employees. Employees’ temperatures are checked prior to entering facilities and visitors were not allowed to enter the facility for a period of time. More employees were hired to meet demands, due to potential understaffing resulting from the virus. In addition, many companies gave their employees’ hazard pay–raises for fighting through this period.
Cannabis being declared an essential business was an unexpected surprise that helped ensure the survival of an already fragile industry. While the industry did take a hit, being permitted to remain open helped support both industry employees and the community at large.
Initially, dispensaries were ordered to close their in-store facilities, shifting their operations to delivery only and now to curbside pickup.
COVID’s Impact on the Cannabis Hotel Industry
In Nevada, purchasing cannabis is legal, but it is illegal to consume cannabis in hotels and public spaces like casinos, bars, and outdoors. These restrictions led to the emergence of cannabis-friendly lodging. This industry provides a safe space for cannabis consumers while eliminating the risk of being ticketed a $600 fine for public consumption.
With the restrictions in place to mitigate the spread of the COVID, the overall hotel and tourist industry in Vegas came to a halt. However, unlike other non-cannabis affiliated hotels, small cannabis lodging businesses might not be able to survive the post-pandemic climate, as cannabis-connected businesses are not eligible for the Small Business Administration, Paycheck Protection Program (PPP) loan.
Moving Forward Post COVID
As Vegas moves to reopen, changes are being implemented for the safety of visitors and employees alike. Plexiglass has been installed across casinos, temperature checks have been established at hotel check-ins, masks are required for servers, and establishments are operating at 50 percent capacity, which could serve to deter tourists.
Vegas is a special enclave shared by tourists and the local community, and it keeps Nevada’s economy thriving. Establishments geared toward tourists immensely suffered an economic loss that will take years to repair. It is going to be a slow walk for Vegas’s economy, but things should return to normal fairly soon.