Manufacturing commerce

Once again, Nevada may turn to ‘sin’ for jobs

In the lobbyists’ room at the Nevada Legislature, physician James Frye takes time out from pushing for changes in drug laws for some lunch.

In the lobbyists’ room at the Nevada Legislature, physician James Frye takes time out from pushing for changes in drug laws for some lunch.

It’s a bit like 1931 at the Nevada Legislature these days.

That was the year when the lawmakers, desperate to relieve the Depression by creating new industry, made quickie Nevada divorces even quicker and gambling legal.

In 2013, lawmakers are looking at repealing a ban on same-gender marriage and making marijuana legal. But unlike 1931, Nevada is not on the cutting edge of those efforts. Legislators are considering jumping on a bandwagon, not creating one. Other states have been there before Nevada.

In contrast with its outlaw state image, Nevada in the last half century has—in a quest for respectability after its unruly early decades—been reluctant to offend the nation’s sensibilities (“Has Nevada lost its nerve?” RN&R, July 4, 2011). Whether policymakers are ready to step away from that quest for propriety is still uncertain.

“In economic development terms, these could be helpful,” said economic development consultant Chuck Alvey of marriage equality and marijuana.

“We have a state that we reach out—marriage is one [of] our big promotions, to come to Nevada to get married,” said Clark County Sen. Richard Segerblom, sponsor of a constitutional amendment to remove the ban on same-gender marriages from the Nevada Constitution. “Why would you take a certain segment of society and keep them off limits? It’s crazy.”

“Making marijuana legal will create a few thousand new green jobs, which we desperately need in the state of Nevada,” said physician Stephen Frye.

Nevada, like every state, likes to think of itself as an exception, but the late Hazel Erskine, a Reno resident who was polls editor of the scholarly Public Opinion Quarterly, used to say that the best guide to opinion in Nevada is opinion nationally. Opinion nationally is in a dash toward legalization of both activities. Nevada, indeed, is a follower this time, not a leader.

Unbanning marriage equality

Would Nevadans vote to repeal the ban on marriage equality that they approved just 11 years ago? The question could be decided by the most basic motivation—keeping their jobs.

In 1994 Oregon activist Lon Mabon, who had succeeded in passing an anti-gay initiative petition in his state and then failed in two other Oregon statewide campaigns, then tried to take petitions into adjoining states, including Nevada. Casinos concerned about a gay boycott of Nevada opposed his effort. Politicians like Gov. Robert Miller and Las Vegas Mayor Jan Jones fell into line behind the casinos and battled the Nevada petition, with the result that it didn’t even qualify for the ballot.

But the casinos did not speak out as forcefully on the home grown 2000-2002 gay marriage ballot petition, so most politicians—lacking the political cover provided by the casinos—fell silent. Some 1994 opponents, like former U.S. House member Barbara Vucanovich, were even supporters of the ban on marriage equality. There was no well-organized, substantial opposition to it and it was approved.

After it won and the ban went into the Nevada Constitution, the state—to the dismay of casino managers, particularly in Las Vegas—was indeed targeted by the gay community. Clark County casino execs decided to go around the voters and the Legislature and conciliate gays. For years, southern casinos have nurtured a gay customer base.

Clark is thus far ahead of Washoe and the small counties in trying to lure the gay community. Casinos there have been cultivating gay customers by seeking LBGT conventions, using gay excursions, tailoring activities to the gay community. After marriage equality was banned, the casinos accelerated these efforts.

Another public vote on marriage equality reaffirming the Nevada ban just as other states are turning in the other direction would sharply undercut the casinos’ efforts and put the state back on the anti-gay lists. Jobs would disappear.

“I think from an election standpoint, that’s the big issue,” Segerblom said. “I mean, we’re crazy to take whatever percentage of the electorate’s marriages off the table. Certainly, next to California, which has the highest number of domestic partnerships there is. I personally just think it’s wrong to single out this group … but at the end of the day, it’s just a good economic issue for Nevada.”

He added, “The hotels testified in support of [repeal]. Everyone’s in agreement with it from the business community.”

One toke over the line

The marijuana issue has one big asset in this Legislature—physician Frye, who haunts the legislative hallways lobbying for legal marijuana. Frye, retired from the Nevada School of Medicine, is the author of two books on the drug war. His credentials are a good match for drug warriors like Richard Gammick, who likes to claim marijuana is not medicine. A resident of Clark County, Frye moved to Carson City full time for this legislature.

Lobbyists Billy Vassiliadis, left, and George Ross huddle in a legislative hallway.

“There are economic benefits and tax benefits,” he said. “They estimate $560 million in sales in Washington,” one of two states that have made marijuana legal under state law. “They have twice our population, but we have four times their tourists.”

He pointed to special events like Seattle’s Hempfest, a three-day gathering that features politics, arts and crafts and concerts and attracts more than a quarter of a million people without the remoteness, discomforts, or inconveniences—or high ticket prices—of Burning Man.

“That’s twice the size of the biggest show we have in Las Vegas, the consumer electronics show,” Frye said. People use their credit cards heavily, he added.

There are political problems associated with marijuana legalization that surpass even those involving marriage equality. No matter what states do, marijuana will remain illegal under federal law, and state legislators are nervous about taking Nevada over that line. In California, legal medical use led to a thriving pot shop industry until U.S. attorneys—Justice Department prosecutors who act for the federal government— launched a campaign against the shops, rupturing the policy of President Obama, who had indicated he would not buck local sentiment. “What I’m not going to be doing is using Justice Department resources to try to circumvent state laws on this issue simply because I want folks to be investigating violent crimes and potential terrorism [instead],” Obama said in Oregon in 2008. “We’ve got a lot of things for our law enforcement officers to deal with.”

But Obama, likely fearing comparisons to the U.S. attorneys scandal that afflicted his predecessor, has not reeled in the California prosecutors.

The U.S. attorney in Nevada at the moment is Daniel Bogden, one of the seven Bush prosecutors who were removed from office for what appeared to be political reasons, triggering the scandal. He was reinstated after President Obama took office. In a report on his office activities in 2011, Bogden wrote, “Eleven defendants were convicted and sentenced for unlawfully distributing marijuana in Las Vegas through the operation of purported medical marijuana businesses, which are not recognized under Nevada law. The defendants included marijuana activist Pierre Werner, also known as Dr. Reefer, who was sentenced in November to 41 months in prison, and John Youngblood, of Los Angeles, owner of ’The Happiness Consultants,’ who was sentenced in October to 21 months in prison. Other businesses named in the cases included THC, the Nevada Compassionate Center, LV Fingerprinting, and Organic Releaf.”

Golden State/Silver State

But California and Nevada are not legally analogous. California provided for marijuana dispensaries for medical cases. Nevada did not. So these Bogden activities may not be a good guide to what would happen under state legalization. Bogden’s use of the phrase “which are not recognized under Nevada law” may well indicate that he is complying with the president’s policy and respecting state practice. Nevada legislators, after all, failed to provide for a source of supply for patients. That phrase may well indicate that Bogden would not prosecute if marijuana shops were recognized under Nevada law, though he did not respond specifically to an inquiry along those lines.

In addition, he said the Las Vegas dispensaries he prosecuted were not medical dispensaries. His office’s investigation indicated they were simply selling marijuana, without respect to prescriptions or patient cards. What he and other U.S. attorneys really need, Bogden said, is new guidance from the Obama administration to reflect recent legal changes outside the medical issue. The guidance they received from U.S. Attorney General Eric Holder in 2009, in a document drafted by deputy attorney general David Ogden, said federal prosecutors “should not focus federal resources in your states on individuals whose actions are in clear and unambiguous compliance with existing state laws providing for the medical use of marijuana.” (The memo can be read at

Bogden is following that policy. But events have eclipsed the memo. Medical marijuana is no longer the only thing at issue in local sentiment. States are decriminalizing and even legalizing outright, not just in medical cases.

Bogden said he and other U.S. attorneys have been waiting for some guidance from Holder that has never come. Specifically, they need to know whether the Obama administration is going to go after Colorado and Washington under the supremacy clause of the U.S. Constitution to try to shut down legal marijuana in those states.

Without having that updated guidance, federal prosecutors around the nation are uncertain how to handle the marijuana cases that pop up under decriminalization or legalization—and are anxiously waiting.

“I think that’s what they’ve done in Colorado and Washington,” Bodgen said. “Those are two very frustrated U.S. attorneys.”

There is some urgency to Nevada state lawmakers doing something about marijuana in Nevada. A court challenge to the grow-your-own provisions in the law is pending before the Nevada Supreme Court. It’s the only place in Nevada law where patients are required to produce their own medications. State Judge Donald Mosley overturned the law, calling it absurd and ridiculous: “It is apparent to [Mosley] that the statutory scheme set out for the lawful distribution of medical marijuana is either poorly contemplated or purposely constructed to frustrate the implementation of constitutionally mandated access to the substance.” If the Supreme Court overturns the grow-your-own rule after the Legislature goes home for the year, it could easily force a special session to get a handle on an unregulated situation.

If the trend of states making marijuana legal continues, at some point the volume of commerce unleashed by popular sentiment will overwhelm federal law enforcement resources. But that time is not yet here.

How to market sin 101

Alvey, a former chief of the Economic Development Authority of Western Nevada (EDAWN), says that while marriage equality and easier access to marijuana would be helpful to the state’s economy, he also thinks that both would be good supplementary factors, not economic engines.

“You could argue these would potentially bring new dollars into the state,” he said. “I don’t know if I’d sell them as an economic development tool, [but] as more removing of an impediment to some economic income. … It’s not a bad thing. I don’t think it’d be a centerpiece.”

They are probably not the kind of things that would find their way into establishment economic development strategies produced by the state executive branch or private economic development outfits. In 2006, for instance, EDAWN pulled together input from business leaders and government that it called Target 2010. Marriage equality is “not probably one of the things that would jump in there [Target 2010],” Alvey said.

Lt. Gov. Brian Krolicki agreed, also noting that state promotion is aimed principally at helping the small counties since the large counties are promoted by the tourism industry itself and local agencies.

On the Senate floor, Sen. Mark Hutchison, right, speaks with Sen. Richard “Tick” Segerblom, who is sponsoring a constitutional amendment to remove the ban on marriage equality from the Nevada Constitution.

Marketing marriage equality and legal marijuana should not, of course, be a challenge to a state with Nevada’s history. But oddly, the state is at something of a disadvantage in going after what bluenoses consider vice. The state has been trying for respectability among the states for so long that the mindset of some of its officials tends to be very cautious, so much so that they think in terms of marketing its skiing even before, say, the state’s longtime gambling industry. The state never got into promoting small county prostitution, much less the cancer panacea and youth elixir that were made legal in Nevada in the 1970s (see sidebar). So the state may simply leave promotion of marriage equality and marijuana to the private sector.

Promoting these activities is a ticklish proposition. Marketing them is not exactly like selling hiking or fishing or even gambling. Lt. Gov. Krolicki was taken aback when asked how the state might handle the two new fields.

“I haven’t even given any thought to how it might be done,” he said. “I think we need to wait and see what comes out of this [legislative] session. It may not come up at all.”

Less nervous about these things is lobbyist and Las Vegas public relations person William “Billy” Vassiliadis, and no wonder. His agency handled the famous “What happens in Vegas” campaign.

“Well, marriage equality I don’t think is ticklish per se because Las Vegas has been marketing to the LBGT community for, gee, 15 years, probably, maybe longer,” Vassiliadis said. “We have a significant sales effort. We have group meetings there. Vegas is listed as one of the most LBGT-friendly communities in the country. I think five of our major companies have HRC [Human Rights Campaign] certification as being LBGT friendly. To me, marriage or not, I think the issue is more about a welcoming to that community.

“Marijuana is a little dicier, I think, because for so long we have felt that if we passed that it would reinforce this notion of lawlessness, you know—prostitution and drugs and what have you. But I think given that states like Colorado have passed it and that it seems to be a growing trend, I think as long as that issue’s more in the mainstream of what’s happening in the country, I don’t think it’s going to affect us.”

Scary Nevada

As Vassiliadis’ comments show, there is still the concern that unconventional activities and product lines could scare away prospective executives looking to relocate companies to Nevada. But Alvey said that after dealing with such executives over a long period, he became convinced that the risk is exaggerated.

“In my experience over the years, most of the people who told us, ’We’re not coming there because there are brothels in the outer counties’ or ’You have casinos there, and I don’t want my employees to be tempted to gamble,’ when you really dug down on most of those, I don’t know but suspect that most of those were covers. There were other reasons that they didn’t want to be here and they would use that rather than some other kind of excuse. … Like on the casino thing—and we did get that from companies. And we would point out to them that, well, you have it everywhere, you have lotteries, you have casinos now in many other places. There’s nothing unique about it. And people who were just using it … as a cover, generally tended to stick with their argument: ’Yeah, but there aren’t as many of them and [here] they’re on every corner,’ etcetera, etcetera. People who were really just concerned about it, they would back off and say, ’You know, you’re right. It’s in a lot of places.’ … And if somebody has a same-sex marriage phobia, they’re going to have that view regardless.”

Alvey said the marijuana/marriage issues can be approached like any other economic activity.

“You could go to any city commission, city council or county commission meeting, a legislative hearing, or you could look at almost any agenda of anything anywhere and you could tie economic development in to it somehow,” he said. “And this is another case of that. People are just looking for reasons that would help them do that. What we always ask, and what’s always asked of me is, What’s the model? What’s the return likely to be on that? I do know that, from talking to some tourism officials, that the marriage thing, gay excursion trips, things of that nature, you know, could have a definite effect with more of the tourism area than in the long-term sustainability of producing goods here in the market that are sold elsewhere, which I still think should be the primary focus.”

Both Vassiliadis and Alvey say that the growth of these activities elsewhere is one of the best things going for marijuana and marriage equality in Nevada.

It’s akin to a little verse a suffragette penned in 1914 when Nevada political boss George Wingfield threatened to leave the state and take his investments with him if voters approved women’s suffrage:

We’re sorry to lose you, George.

But where are you going to go

With all the women voting

From Maine to Idaho?

“I don’t think we’ll have to market it,” Vassiliadis said. “I mean, I think that what people come to Vegas for, to Nevada for is a unique experience. … I don’t know that that [marijuana] would be unique as everybody’s moving toward that, anyway.”

That doesn’t mean Nevada should go out of its way to poke and prod folks who could create problems for the state, he said.

“The bar for us is a lot higher. The scrutiny on us is a lot closer than it is on Colorado or on New Mexico or whomever. Now, on domestic partners, we were sort of, not the earliest … but we were there pretty early. So that was pretty good. But on things like marijuana, again, what used to be viewed as a sinful thing or an outlaw thing, we’ve got to be a little more careful. Again, talk nicely to the mainstream and don’t step out front on it.”