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HOME > NEWS > Investor News > Board not wavering on medical pot stance

Board not wavering on medical pot stance

23 July 2014

By Howard Stutz

LAS VEGAS -- A regulatory mandate that Nevada gaming license holders stay away from the state’s neophyte medical marijuana business could be challenged again Thursday at the Nevada Gaming Commission and Control Board.

But the outcome is inevitable.

The Gaming Control Board’s May 6 industry notice to gaming license holders — saying they must choose between medicinal pot and gambling — won’t be altered.

Possession and distribution of marijuana is a felony. Therefore, gaming regulators don’t want license holders involved in the medical end of the business.

Gov. Brian Sandoval, who signed Senate Bill 374 in 2013, which established the framework to make medical marijuana available to patients, backs the stance taken by gaming regulators.

“The governor has confidence in the Gaming Control Board’s ability to properly regulate the gaming industry in Nevada,” spokesman Tyler Klimas said.

The fallout from the Control Board’s ruling is just beginning.

¦ The wife of Bruce Familian, owner of slot machine route operator Nevada Gaming Partners, is expected to sell her 8 percent stake in GB Sciences Nevada LLC. The business was awarded one of 18 medical marijuana dispensary licenses in June by the Clark County Commission.

¦ Troy Herbst, whose father and brothers own JETT Gaming, is no longer part of the slot machine route operation, according to a company attorney. Troy Herbst decided to concentrate on his 10 percent stake in Clinic Nevada D1 LLC, which also received a Clark County dispensary license.

¦ Las Vegas Sun owner and Publisher Brian Greenspun said Tuesday he sold his shares of Greenspun Gaming LLC and G.C. Investments “to family members.” The businesses own portions of Barley’s Casino, the Wildfire Henderson, Greens Cafe and the Palms. Brian Greenspun is part of Integral Associates, which is seeking a medical marijuana dispensary in Henderson.

¦ Sources said Barry Moore, who has restricted gaming licenses for several taverns, including Shuck’s Gaming and Oyster Bar and Beano’s Casino, may sell the businesses so his wife can hold onto her ownership in GB Sciences. Their attorney, J.T. Moran III, did not return phone calls seeking comment.

Gaming Control Board members stood solidly by their ruling during a May 22 Nevada Gaming Commission hearing. Commissioners unanimously backed the Control Board, although three of the five members — all attorneys — recused themselves because their law firms represented medical marijuana applicants.

The Control Board held to its opinion during the panel’s July 10 restricted gaming license meeting.

Owners of Crab Corner restaurant were seeking approval for five slot machines. Familian’s company was set to manage the games. But the Control Board objected to Nevada Gaming Partners involvement because of Familian’s wife’s medical marijuana interest.

Familian said he was “blindsided” by the ruling. He went on the offensive the next week, hiring a lawyer and a public relations company. In interviews, Familian said the Control Board’s decision was hurting his existing business, which manages slot machines in 40 Las Vegas bars, taverns, convenience stores and restaurants.

On Friday, Familian and his attorney had a long meeting with Control Board Chairman A.G. Burnett in Carson City. Several solutions were offered.

On Tuesday, Familian’s spokesman, Bill Marion, said Nevada Gaming Partners was working to resolve the matter.

The Gaming Commission will take up the Crab Corner licensing Thursday morning. The meeting will be Tony Alamo Jr.’s first as commission chairman, but he made his views on medical marijuana known in May as a member.

A physician, Alamo said he “100 percent supports the use of medical marijuana as a drug of last resort.” But as a gaming regulator, he agrees with the Control Board.

“We cannot blur lines,” Alamo said. “The board did the right thing.”

The gaming regulators’ message has been heard industrywide.

The controversy could go away if Congress removes the criminal stigma from medical marijuana. Rep. Dina Titus, D-Nev., is hoping to accomplish that task.

She co-sponsored an amendment to a resolution last month that halts Justice Department interference when states implement medical marijuana laws.

Titus said the vote “protected Nevada and other states” with existing medical marijuana laws. However, she said a move to federally decriminalize marijuana has no chance of passing.

Titus disagreed with the Control Board, however, saying gaming license holders should be able to participate in Nevada’s pending medical marijuana trade.

“My feeling is the state has allowed it and I think any legitimate businessman should be eligible to be part of the industry,” Titus said. “Who is more vetted than anyone in gaming?”


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Howard Stutz
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