By Kate Lowenhar-Fisher, Jennifer Gaynor and Greg Gemignani

Even as more and more states pass laws permitting sales and use of medical and recreational marijuana, marijuana remains an illegal Schedule I drug under the federal Controlled Substances Act.

On May 6, 2014, Nevada State Gaming Control Board Member Terry Johnson issued a Notice to Licensees stating that “… the Board does not believe investment or any other involvement in a medical marijuana facility or establishment by a person who has received a gaming approval or has applied for a gaming approval is consistent with the effective regulation of gaming.” The Notice went on to illuminate the Board’s view that “any such investment or involvement by gaming licensees or applicants would tend to reflect discredit upon gaming in the State of Nevada.”

In its July 2014 hearing, the Board went further and made it clear that a person could not be in the gaming business if his spouse was in the medical marijuana business. In the Board’s view, there must be strict separation between the gaming and medical marijuana businesses.

Furthermore, in light of the civil forfeiture actions undertaken by United States Attorneys in various states around the country, the Board is seriously considering whether there are issues related to medical marijuana licensees lending money or leasing property to gaming licensees.

As a result of the board’s position, gaming licensees and gaming license applicants who have been awarded (or are pursuing) medical marijuana licenses must consider whether and how to divest from the gaming business.