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Las Vegas’ first pot-friendly hotel has officially opened its doors, but Nevada’s cannabis regulations could potentially threaten the hotel’s business model. 

On the surface, the Lexi Hotel seems like many of Sin City’s other luxury hotels. The 64-room establishment offers a variety of classy perks, including a tops-optional swimming pool, a bar, and a members-only lounge for exclusive dinners and entertainment. But what really sets the new hotel apart is the fact the entire fourth floor has been designated as “cannabis-friendly.” Or in other words, guests will actually be allowed to light up in their rooms.

Elevations Hotels and Resorts bought the former Artisan hotel in 2022 for nearly $12 million and then reportedly spent close to $3 million transforming it into the Lexi. The hotel was slated to open this April, but supply-chain issues delayed the opening until June. Elevations already run a weed-friendly hotel in Phoenix, Arizona, and CEO Alex Rizk specifically set out to make the Lexi a cannabis-inclusive space as well.

City and state regulations could put a damper on those plans, though. Like almost all other adult-use states, Nevada still prohibits people from smoking weed in public. Private property owners can blaze up at home, of course, and landlords can allow adults to smoke on their properties too. It’s not specifically clear whether or not those rules apply to hotel owners, though. Rizk believes the Lexi isn’t breaking the law, but state regulators seem less certain of that fact.

“The Lexi does not hold a state cannabis license of any type, including for a cannabis consumption lounge,” said Tiana Bohner, public information officer for the Nevada Cannabis Compliance Board, the Las Vegas Review-Journal reports. “The CCB has not been contacted by The Lexi, and so, we cannot comment on the legality of their specific business plans without additional information.”

Rizk was hoping that Vegas’ new cannabis consumption lounge licenses could help support the Lexi’s 420-friendly status. This spring, city officials finally signed off on regulations that will allow businesses to open alcohol-free lounges where adults can legally smoke weed. These regulations come with a whole raft of restrictions, though, and the fine print prevents Elevations from applying for one of these coveted licenses.

“Having a lounge is one of our main goals,” Rizk told the Review-Journal. “But when we talk about these lounge licenses, right now, they all assume that you would also have a retail license attached to it so you could go to that lounge and purchase cannabis at the lounge and sit down and use it. We have no intention of doing that. We don’t want to touch the flower, we don’t want to be a retail cannabis company. We exclusively want to allow the use of cannabis on our property wherever it’s legal and permitted.”

There’s another hurdle that blocks the company from applying for a consumption lounge license as well. The city’s new cannabis regulations prohibit pot lounges from opening up within 1,500 feet of a casino, and the Lexi is just around the corner from Palace Station, a hotel-casino. This stipulation would block Elevations from getting a license for a smoking lounge.

Regardless of the current regulatory confusion, Rizk believes that the city will eventually update its rules to accommodate the Lexi and other pot-friendly hotels. “I think that those laws are very new and they will evolve,” he told the Review-Journal. “Nevada, specifically Las Vegas, is well known for evolving and constantly changing. The goal for us right now is to be a trailblazer and pioneers of being part of those early conversations so as the law is evolving, we’d love to be a part of the reason why it evolved and give some guidance.”