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Howard Stutz

Gaming board bans casino licensees from medical marijuana trade

7 May 2014

LAS VEGAS -- The Nevada State Gaming Control Board told its license holders Tuesday they cannot participate in the state’s potential medical marijuana business.

In an industry notice posted to the Control Board’s website, the agency, which is charged with licensing and regulating the state’s casinos and gambling equipment providers, said the federal government views distribution, possession and sale of marijuana as a crime.

“Accordingly, unless the federal law is changed, 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,” Gaming Control Board member Terry Johnson wrote in the notice.

“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,” Johnson said.

In an interview last month, Control Board Chairman A.G. Burnett said the agency was advising license holders and potential gaming license applicants to stay away from medical marijuana.

The board was developing a list of questions and concerns when its comes to medical marijuana.

“That would give us some cause for concern,” Burnett said of license applicants having involvement in the medical marijuana business. “We would be remiss if we didn’t consider that activity as part of the investigation. It’s a gamble and you need to think it through.”

On Tuesday, Burnett said the notice, “is a clear understanding of our position.”

Clark County became the first jurisdiction in Southern Nevada to accept applications for marijuana-related businesses after approving regulations in March.

Medical marijuana has been legal in Nevada since 2000. Last year, state lawmakers enacted a law to allow dispensaries to operate, calling for up to 66 potential medical marijuana outlets throughout Nevada. Distributing medical marijuana is under a county-by-county framework.

State Sen. Greg Brower, R-Reno, who is a partner in the Snell & Wilmer law firm, said the Control Board made the correct decision in telling license holders to back away from medical marijuana, even through he supported the legislation last year.

“This is another example of an unintended consequence from the inconsistencies with the law,” Brower said. “I voted for it, but I had significant reservations. My reservations have increased.”

Brower said Nevadan who want to participate in the medical marijuana business are caught in the middle until the federal government makes a move either de-criminalize or end the felony penalties surrounding pot.

At least one Nevada medical marijuana applicant could be affected by the edict: M Resort CEO Anthony Marnell III. He owns a 71 percent stake in Clear River LLC, which is seeking a Clark County medical marijuana license.

M Resort spokeswoman Leslie Peterson said Marnell wasn’t commenting on the Control Board’s notice.

Two of the owners of slot machine route operator JETT Gaming have invested in the medical marijuana business.

Troy Herbst owns a 10 percent stake in The Clinic Nevada LLC, which applied for a cultivation license and a dispensary license. His brother, Tim Herbst, holds a 5 percent stake in the company.

Troy Herbst did not return a phone call seeking comment.

Tom Mikovits, a marketing executive for Real Gaming, the South Point Casino’s online poker website, said Tuesday he had begun the process to divest himself from Wellness Connection of Nevada LLC, which listed him as a manager. Mikovits, who does not have a gaming license, is still considered a key executive with Real Gaming and the board’s announcement caused him to end his relationship with Wellness Connection.

A look at the 109 companies applying for a Clark County medical marijuana licenses found individuals with gaming industry ties.

Former Primm Resorts owner Gary Primm and his son Roger Primm each have 22.5 percent stake in Deeproots Medical LLC. Sig Rogich, a Las Vegas public relations and advertising power broker who has done work for gaming companies, holds a 5 percent stake in the company.

Armen Yemenidjian, a vice president of casino marketing and operations at Tropicana, holds a 40 percent stake in Integral Associates LLC, which applied for five licenses: three dispensaries, one cultivation facility and one production facility. Yemenidjian is the son of Tropicana President Alex Yemenidjian.

The younger Yemenidjian did not return phone calls placed through a public relations representative.

Camile Ruvo, wife of Larry Ruvo, philanthropist and senior managing director of Southern Wine and Spirits of Nevada, also holds a 40 percent interest in Integral Associates.