**Las Vegas Casinos Keep Their Distance from Cannabis: A Cautionary Tale**
Las Vegas is known for its dazzling lights, thrilling entertainment, and of course, its casinos. But it seems that when it comes to cannabis, Sin City has decided to keep its distance. In a town where the chances of hitting the jackpot are high, one entrepreneur discovered that betting on a cannabis-friendly hotel may not have been the best gamble after all. Enter Alexander Risk and his ambitious venture, the Lexi, Las Vegas’s first hotel explicitly designed for cannabis lovers.
Risk, a real estate entrepreneur, opened the Lexi in June 2023 with dreams of becoming the “Kimpton of cannabis” – the go-to brand for weed-friendly accommodations. This hotel, located just off the famous Las Vegas Strip, offered guests the unique opportunity to smoke weed on its special fourth floor, with suites cleverly numbered 420 and equipped with advanced air filters to keep things fresh. But in an unexpected twist of fate, Risk found that his innovative idea didn’t quite hit its mark in a city where cannabis consumption is not allowed on casino floors.
Five months after the grand opening, occupancy rates hovered precariously at 30%. This left Risk scratching his head, as he quickly learned that many Las Vegas properties were taking a relaxed approach to cannabis use. Guests were often seen vaping and enjoying their pot without fear of being reprimanded by the big casinos. Low occupancy and fierce competition made hosting weddings and events a tough sell for his cannabis-friendly hotel. Lacking demand, Risk decided it was time to change course, selling the Clarendon and rebranding the Lexi after dialing back the cannabis-friendly marketing. This strategic pivot saw occupancy jump by 15%.
Despite this rollercoaster of a journey, the larger picture reveals that Las Vegas is grappling with how to integrate cannabis while protecting its booming casino industry. Visitor numbers to the city have dipped by 6.5% from January to April 2025, while gaming revenue has similarly suffered, declining by 3.3% compared to the previous year. This decline is noteworthy, even as the total revenue from all sources—gaming, dining, entertainment—rose to a staggering $22 billion, a 6.8% increase from 2023. Profits, however, took a nosedive, plummeting by 40%.
The cannabis conundrum in Vegas can be traced back to federal laws and state regulations that prevent casinos from investing in or participating in the marijuana trade. Nevada’s laws are crystal clear: dispensaries cannot be located within 1,500 feet of a licensed casino, and delivery services cannot operate on the Strip. This means that while cannabis is legal and widely enjoyed, the casinos cannot risk their gaming licenses by linking up with the cannabis industry.
Big casinos like Win Resorts, Caesars Entertainment, and MGM Resorts are raking in billions—from $2.6 billion to a whopping $8.8 billion. The combined revenue from these giants accounts for nearly half of the entire $32 billion generated by the U.S. cannabis industry in 2024. The numbers tell a clear story: collaborating with cannabis businesses could spell disaster for these established gaming operators.
As Risk’s story shows, simply creating a welcoming space for cannabis enthusiasts may not be enough to succeed in Las Vegas, where tradition and gaming reign supreme. As the city continues to wrestle with its identity and the potential for cannabis integration, it remains to be seen whether it will ever take the plunge or if they’ll stick to gambling as their vice of choice. For now, it seems that when it comes to cannabis and casinos, the house always wins.
