As can be expected of any nascent industry, the legalization of recreational cannabis has come with economic twists and turns requiring some fashion of foresight. 

The Cannabis Policy Institute at UNLV (CPI) was created in order to get a handle on just that. Now in its second year, the institute has made progress in developing, coordinating, and expanding cannabis research, policy, and education.

“Marijuana’s legalized at the state level and needs to be studied,” said Riana Durrett, executive director of the CPI. “We’ve got to have responsible policies around it, and we need to stay ahead of it.”

Durrett started working with the cannabis industry after becoming a practicing attorney. She serves as the vice chair of the Nevada Cannabis Compliance Board, was a former director of the Nevada Dispensary Association, and teaches cannabis law classes on campus. Under her guidance, the CPI has produced multiple reports on the state of the cannabis economy, including solutions that can possibly improve its future viability.

What once peaked at about $1billion in revenue in 2021, with $100 million in yearly taxes, is now declining. Durrett says a combination of high tax rates, inconvenient regulations, and competition from the illegal market are likely responsible.

“When I began with the industry, there was a lot of positivity,” she said. “People were very bullish about the ‘green rush,’ but it has struggled quite a bit to gain momentum. Only around a quarter of the businesses are profitable, and it’s been much more difficult than I think people imagined.”

Recommendations from the CPI’s policy reports have driven discussions at the state level. One example is advocating for expanded delivery options, which are currently limited to private residences.

“When you limit access, what you really do is open up unlicensed sales,” said Durrett. “The illegal market will fill whatever gaps in access that the legal market cannot. And if Nevada and the rest of the country want to make a difference, they’re going to have to make a change.”

Influencing the Future

The CPI’s location in Las Vegas, a premier tourist destination, presents an opportunity to act as a guiding force for the industry and its connection to tourism, business, and economic development. It recently hosted a national symposium, coinciding with MJBizCon – the largest cannabis expo in the nation.

This helps the institute form a national perspective on policy discussions, ranging from commerce to gaming integration.

“The cannabis industry is siloed into separate states,” said Durrett. “If interstate commerce is legalized, a national market would make a huge economic difference. Then, there could potentially be a global market for the U.S. to import and export. There needs to be some sort of national reform if the country wants to see more revenue from cannabis.”

In the meantime, increasing revenue locally has required the institute to dust off the dormant conversation of cannabis and gaming: whether the two industries will eventually integrate and how it can happen. The conversational well dried up in 2014, with gaming regulators opposing any crossover. But recent changes prompted the CPI to reopen discussions around it.

“It was becoming apparent that unlicensed sales may pose a problem for both industries, not just cannabis,” Durrett said. “Nevada really has the opportunity to embrace much more excitement about cannabis and cannabis tourism, with a much brighter future if the industries work together.”

Marla Royne Stafford, the CPI’s director of research, says it’s important to understand the perceptions of modern consumers.

“So much has changed,” she said. “More states have legalized pot, attitudes have evolved, and maybe it’s time to rethink some of this. The world is changing. People go places to do things that aren’t always possible in their own hometowns.”

Figuring out how one industry impacts the other, and evaluating the economic implications in doing so, requires a delicate balance that the CPI hopes to achieve.

“Gaming and cannabis sounds like a natural alliance,” said Royne Stafford. “A lot of states look toward Las Vegas as a reference point for gaming regulation, and they are increasingly looking at the city as a reference for cannabis regulation.”

While the CPI’s focus on economics and various policy areas puts it in an academic league of its own, an additional prerogative is providing unique educational opportunities for students. This opens the door for long-term, continuing influence in the space.

A Cannabis Law and Policy class – taught by Durrett – was developed for the William S. Boyd School of Law, and is often immediately waitlisted. The class teaches students about taxes, administrative law, constitutional law, and policy reform – all through the lens of cannabis.

“I’m developing another class focusing on tribal cannabis law, which will be the first in the U.S., and I’m very excited about that,” said Durrett. “I’ve really enjoyed the feeling of making a difference, and teaching the next class of professionals that will drive this industry forward. As far as cannabis is concerned, I think we’re going to have a lot of impact.”