Why Las Vegas Casinos Won’t Gamble On Cannabis

Forbes

Tourism on The Strip is down this year, but weed isn't the salvation. Here's why allowing consumption lounges and other 420-friendly activities in the top casinos would put them at risk to lose everything.  Read the full story on Forbes: https://www.forbes.com/sites/willyakowicz/2025/06/15/why-las-vegas-casinos-wont-gamble-on-cannabis/  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00Today on Forbes, Why Las Vegas Casinos Won't Gamble on Cannabis

00:05In June 2023, real estate entrepreneur Alexander Risk opened the Lexi on West Sahara Avenue,

00:14just off the Las Vegas Strip, as Sin City's first cannabis-friendly hotel.

00:19The 46-year-old Risk thought he had a, quote, genius, million-dollar idea.

00:25Smoking weed is only allowed on the Lexi's fourth floor,

00:28where every room is outfitted with air filters and every suite is numbered 420.

00:33The Lexi was the second cannabis-friendly hotel Risk had opened after the Clarendon in Phoenix, Arizona,

00:39and he had ambitious plans to expand his weed hotel concept under his Elevations brand across the West,

00:45from California to Oregon, and become the so-called Kempton of cannabis.

00:51Risk soon realized that being cannabis-friendly was not really an edge in Las Vegas.

00:56While cannabis consumption is officially banned in casinos and on the Strip,

01:01enforcement is very lax.

01:03Risk says many well-known properties turn a blind eye to their patrons' vaping and other pot use.

01:09Within five months of launching the Lexi, Risk knew he had made a mistake.

01:14His occupancy topped out at 30%,

01:16and he started losing bids to host weddings and other group events

01:19to competitors who don't cater to cannabis consumers.

01:24Risk sold the Clarendon and is in the process of rebranding the Lexi.

01:28After he stopped advertising the property as cannabis-friendly,

01:31occupancy jumped 15%.

01:33Risk had personally invested $5 million into the 64-room adults-only hotel,

01:39which he bought with other investors for $12 million in 2022.

01:43He says, quote,

01:44Unfortunately, this venture could cost me my entire career.

01:49It brings a stigma to the property that it is a pothead gathering,

01:52and most people don't want to be associated with it.

01:55Despite Risk's cautionary tale,

01:58Las Vegas is perpetually wrestling with how to integrate cannabis in casinos,

02:03particularly now that gaming revenue has declined this year.

02:06Visitor volume in Las Vegas is also down 6.5%

02:10from January 2025 through April 2025,

02:14according to the Las Vegas Convention and Visitors Authority.

02:17Even visitor satisfaction has declined.

02:2087% of visitors in 2024 said they were, quote,

02:23very satisfied with their visit,

02:26down from 94% of visitors in 2019,

02:29according to the 2024 Las Vegas Visitor Profile Study.

02:33Meanwhile, gaming revenue from casinos on the Strip

02:36is down 3.3% during the last nine months,

02:39compared to the same period last year,

02:41according to the Nevada Gaming Control Board.

02:45In 2024, casinos on the Las Vegas Strip

02:47collected $8.8 billion from games alone,

02:50a 1% decrease from $8.9 billion in 2023.

02:55While total revenue from gambling, hotels,

02:58food and drink, and attractions along the Las Vegas Strip

03:01hit a record of $22 billion,

03:03up 6.8% over 2023,

03:06profits tanked 40% compared to 2023.

03:10But cannabis is not the answer.

03:13The city, where 42 million tourists flock every year

03:16to indulge in legal vices,

03:18already hosts several major cannabis conferences every year,

03:22including MJ BizCon,

03:24Women in Cannabis Expo,

03:25and the Nevada Cannabis Awards Music Festival.

03:28The state legalized medical marijuana in 2001

03:31and recreational marijuana in 2020,

03:34but thanks to federal law and Nevada gaming rules,

03:37casinos cannot invest in

03:38or be a part of the state-regulated marijuana trade

03:41without risking losing their gaming license.

03:45Nevada's legislators have gone further

03:47and instituted rules that ban dispensaries

03:49within 1,500 feet from a licensed casino

03:52and forbids them from delivering legal orders on the Strip.

03:56More than anything,

03:57gaming operators have a lot to lose

03:59by sanctioning cannabis use.

04:01In 2024,

04:02Wynn Resorts generated $2.6 billion in revenue

04:05from its two Vegas properties,

04:08Caesars Entertainment's eight properties in Vegas

04:10posted $4.3 billion in revenue,

04:12and MGM Resorts' eight properties

04:14brought in $8.8 billion in revenue.

04:18These three companies combined

04:20make nearly half as much

04:21as the entire $32 billion in sales

04:24the U.S. cannabis industry posted in 2024.

04:28All casinos on the Strip

04:29generated $22 billion last year.

04:33In other words,

04:34doing business with the cannabis industry

04:35would be a death sentence for casino operators.

04:38For full coverage,

04:40check out Will Jakowitz's piece

04:42on Forbes.com.

04:45This is Kieran Meadows from Forbes.

04:47Thanks for tuning in.

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