How five women bet it all to sell medical marijuana in Las Vegas

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Understand that Las Vegas is not the town it claims to be.

If you’re an adult in Las Vegas, you can do almost anything. On the strip, you can smoke, drink, and gamble. Drive an hour in one direction, and you can fire heavy weapons, legally. Drive an hour in another direction, and you can pay for sex, legally. But if what helps you relax is a prescribed dose of medicinal marijuana, you’re out of luck.

Despite being legalized over 15 years ago in Nevada, medicinal marijuana is still largely unavailable. There’s plenty of demand; the issue is supply. Opening a medical marijuana dispensary in Las Vegas is nearly as difficult as breaking ground on a new casino. Applicants need to attend countless hearings and have enough money to prove opening a storefront to be viable, a powerful attorney, state and city approvals, and zero demerits that could compromise their perceived integrity. A couple city council connections help, too.

The spectacular gamble of Desert Aire Wellness

The five women who are now establishing Desert Aire Wellness — what could be the first all-women-run marijuana dispensary in the state — had none of that. They met less than a year ago at City Hall public forums, each driven to launch the business for their own personal reasons. In order to compete for a highly coveted license, they needed a seat at the table, and to do that, they needed to come together and put down all their chips.

In June 2014, the women wrote a $100,000 check to local lawyer Jay Brown. He was out of their price range, but he was and is one of the city’s most respected attorneys, a close friend of local and national politicians alike. That’s who they needed: someone known for spending dozens of hours — in the matter of dispensary applications, nearly twice that of any other lawyer — lobbying for his clients in the crucial local votes. They were convinced Jay Brown, and Jay Brown alone, would give them their best shot at a dispensary license.

Jay Brown, on the other hand, was less convinced. Susan Lera, one of the company’s founders, recently recalled Brown’s final words before they handed him the check: "He looked at us and said, ‘Ladies, you have a snowball’s chance in hell to get a dispensary.’"

(Illustration by Dylan Lathrop, Vox Media)

Susan Lera has a history in horticulture. Raised in Las Vegas, she cut her teeth as a landscape designer, which she says landed her appearances in a handful of magazines and on HGTV. Lera met Paula Newman, a fellow Desert Aire co-founder, roughly 15 years ago while landscaping her home.

Lera and Newman have since changed careers a few times, occasionally working together. They identify as entrepreneurs, people open to opportunity when it presents itself. Both women were in sales in January 2014, Lera at Hilton and Newman at a timeshare company, when they began to notice a surge of local news stories about the marijuana dispensary licenses that would be awarded later that year.

Chewing on the possibility, the duo imagined a dispensary akin to an alternative medicine pharmacy, a place that would provide a safe and informative environment where the people who didn’t normally consider medicinal marijuana an option — parents, the elderly — could educate themselves on the substance’s properties.

A marijuana dispensary for people unfamiliar with or scared of marijuana

In themselves they saw the type of client they’d like to serve: Lera, whose eight-year-old son is autistic, is particularly interested in the health properties of cannabis, viewing it as a natural alternative to medicines like Ritalin that she doesn’t wish to give her child. Newman has hopes for the tinctures and oils helping her mother, who is in her 90s and suffers from glaucoma and its associated pains.

Lera and Newman attended local meetings, originally out of curiosity. Was the plan viable? What would it cost? Where could they open? After one of these meetings, they met Brenda Gunsallus, who’d flown in from North Carolina. They found in her a kindred spirit and new business partner, another entrepreneur with limited wealth and contacts, but a surplus of hope and passion. Gunsallus invited two more friends from her home state, Darlene Davis and Stacey Huffman, rounding out the group.

Pursuing a dispensary license, of which only 18 would be given for the initial round of openings in Clark County, would pit them in competition against dozens of wealthy, high-powered, politically established applicants — mostly men — not just from Las Vegas, but the entire country.

They decided that being a group entirely comprised of women would work to their advantage.

"Honestly," says Lera, "we were thinking maybe, heck, that can help [put us] at the top — being all women. We were doing research and found out women were uncomfortable going to the dispensaries, either because of the location, or that they were intimidating. We thought [we] could gear [our company] towards women and make it more comfortable for [them]."

"I think if a person walks into a place run by women," says Newman, "I’m hoping our gentler side, our maternal side, our sister side, and our auntie side will be able to sit down with people who are afraid… and to be able to choose an oil or a tincture, not roll a doobie and get high."

Legal marijuana has floundered in Las Vegas despite the city’s reputation as a libertarian playground. Despite medical marijuana being legalized by the public vote in 1998 and amended into the state constitution in 2000, the city and the state have been slow to take measures that would allow the sale and possession of the drug.

Medicinal legalization took effect in October 2001, but was immediately crippled. For over a decade, qualifying patients were limited to possession of 2.5 ounces and 12 plants. Dispensaries were forbidden, so card holders had to cultivate their own supply. To this day, a first offense possession of up to an ounce of marijuana — without a medical license — warrants a $600 fine and the label misdemeanor. Get caught carrying over 2 ounces on a second offense, and face up to four years of jail time.

With progress came setbacks. In October 2009, the Justice Department announced that people who use or distribute marijuana for medical purposes should not face federal prosecution, spurring a number of dispensaries to open in Nevada in 2010. They were subsequently raided by federal agents.

Not until 2012 did a Clark County district judge declare Nevada’s prevention of marijuana dispensaries unconstitutional. But that same year, state police arrested or gave citations for 8,500 marijuana-related crimes. According to the Marijuana Policy Project, 85 percent of those incidents were for marijuana possession. Remember, the state’s citizens voted the legalization of possession and sale of medical marijuana into their own state constitution, not once, but twice over a decade prior.

For comparison’s sake, consider that the state of Colorado approved medical marijuana at the same time as Nevada. Colorado has since legalized recreational pot, and last year made $53 million in tax revenue, part of which is now being used to build public schools and staff health and wellness professionals.

With the marijuana industry making positive inroads in other states, now, 15 years after the state’s original legalization amendment, marijuana is coming to Nevada — and rapidly. In 2015, after 14 years of politicking, marijuana dispensaries will finally open across the state.

Opening Desert Aire Wellness is a risky venture: the blunt cost to open a shop is staggering. According to Lera, the earliest budget estimates — including licensing, floor plan, and a full remodel — would cost over $300,000, not including purchases from vendors, payroll, and other minor costs. Nor did it include legal fees.

That’s where Jay Brown, the initial $100,000 fee, and the snowball melting in hell enter the scene. The $100,000 fee, delivered in full to a single attorney, reads like a red flag, and with reason. Jay Brown has a reputation in Las Vegas. A former co-worker of ex-Vegas Mayor Oscar Goodman, Brown is best known for his capabilities as a lobbyist. When the women met in his office, Brown encouraged them to think seriously about not pursuing the dispensary. He said he discouraged them on their second visit. And their third visit. Brown explained that he had already signed as council for at least one other client hoping to win a dispensary license. (According to a report by The Las Vegas Sun, Brown represented seven different clients in the matter.) At best, he told them, they would get a license to cultivate marijuana — plenty of applications do.

The shop alone would cost $300,000

The group reconsidered taking Brown on time and again, but there was no way around the truth. They needed Brown’s political connections and affiliation with the gaming or liquor businesses. Brown was the closest they had. And his price was fixed. After their fifth visit with Brown, they knew what they had to do.

"I was physically ill," says Paula Newman, "but the reason we went to him is because we know for a fact that he’s a good lobbyist. And he’s a person that’s been in this town for many, many years. You get what you pay for, and I’ve always been a believer of that. I figured the only chance we were going to have was to start with someone who has the best angles, and the best reputation of talking us up. Because we’re nobodies. We’re the peons. And I’m not ashamed to say it."

"Talk about Vegas," says Lera, "it was the biggest gamble for all of us. We took so many notes from everybody. We were like, well, we’re already in it, let’s go forward and do the best application we can do."

Desert Aire’s application was its best weapon — other than its high-powered lawyer. When state requirements mention an employee manual to be created in the future, the group wrote the entire employee manual in advance, including it with their submission. The final application spanned thousands of pages, requiring multiple 4-inch binders.

Eighteen slots were open for Vegas-area dispensaries in theory, but many would immediately be claimed by shoe-ins: the Nevada Wellness Center was founded by Frank Hawkins, a former NFL running back, Las Vegas city council member, and board member of the Las Vegas Housing Authority (Hawkins is also currently the president of Las Vegas’ NAACP branch, and develops housing in low-income neighborhoods). Other winning applicants at the state approval level include the Irvine, California-based CEO of Terra Tech, an established member of the medical marijuana industry, and NuLeaf, a company whose investors include local legislative lobbyist, John Sande III.

According to a June 2014 report by The Las Vegas Sun, after the Clark County Commissioners signaled medical marijuana dispensaries would open in March of the same year, three of those commissioners received campaign contributions "22 times for a total of $56,900. Nearly 40 percent of that came from investors in a single venture, CW Nevada." In a report by The Las Vegas Sun, commissioners claimed contributions would have no impact on their decision. It’s unclear if CW Nevada secured a license, as the company has not consented to have its identity released on the list of provisional license holders.

Desert Aire Wellness didn't have famous athletes or politicians on its side

Without political cache or cash to compete, in October 2014, Desert Aire Wellness, under the advice of their councilman, Bob Coffin, and their attorney, Jay Brown, pulled it’s application. By pulling the application without prejudice, Coffin explained, they would have a better chance at a dispensary license in the next round of applications — whenever that might happen.

For a week, it seemed they’d rolled snake eyes and lost big time. Then the unexpected happened. Days after resigning from Clark County’s application process, the state of Nevada awarded its own approval for dispensary licenses — and Desert Aire Wellness was among them.

On December 17th, Desert Aire Wellness, allowed to resubmit their local application, finally received approval from Clark County, clearing the final hurdle to opening the business. Lera remembers calling their lawyer: "I said Jay, hell just called and said the snowball arrived."

(Google Maps)

Beating the house

A short drive off the strip, near the Las Vegas Convention Center — where each January the tech community meets for CES — sits a small shop that will be transformed into Desert Aire Wellness. The roof needs replacement, and the facade begs for fresh paint, but soon locals and tourists, with the right prescription, will be able to visit 420 E. Sahara Ave — yes, 420 — and purchase legal medicinal marijuana. They break ground today, on April 20th — yes, 420 again.

Breaking ground on 4/20 at 420 E. Sahara Avenue

Foot traffic will be a trickle, at first. As of a year ago, only 3,473 people carried medical marijuana cards in Clark County, with roughly 5,000 in the entirety of Nevada.

The hope among Desert Aire’s owners is that the number of cardholders will increase as more dispensaries open, and will radically surge if recreational marijuana is legalized in the state in 2016. In December 2014, Nevada’s Secretary of State Ross Miller announced the Initiative to Tax and Regulate Marijuana had received enough signatures from Nevada citizens to appear on the ballot in November 2016. This month, the Nevada legislature also has the choice to adopt the measure into law.

Opening a dispensary is expensive and not immediately lucrative, but the long-term play is undeniable. The people who open medical pot shops this year will have a head start on a market that will almost certainly skyrocket within the decade. The odds are greater than anything offered in the casinos just down the street.

But Lera and Newman say they’re not here for the money anyway, and it’s hard not to believe them. Newman has plans to host speakers at the dispensary — educated writers and physicians who can speak to the elderly and to other people who are reluctant to try marijuana as an alternative to their current medicine.

"[The elderly] grew up in a culture back then where marijuana was bad," says Newman. "It was devil weed back then. My job is not to shove anything down anyone's throat, but it’s to empower them with knowledge. At least they know they have something in their arsenal that they can try that might be able to alleviate some of their suffering and enrich their lives.

"It’s about teaching people, and then after they’re taught, they can make an informed decision as to what they think would be best for them, their family, their children, their parents."

Lera says Desert Aire Wellness should open in late June, around the time the state has finished the legal work that will allow for a steady supplied stock of medical marijuana at local shops. If their shop improves the lives of local families, the company’s big bet will have paid off.