In June 2023, the real estate businessman Alexandre Rizk inaugurated Thexi in West Sahara Avenue, next to the Strip in Las Vegas, the first hotel with cannabis in the city of sin. Rizk, 46, thought he had had a great and millionaire idea.
Smoking marijuana is only allowed on the fourth floor of Thexi, where each room is equipped with air filters and each suite has the number 420. The Lexi was the second hotel suitable for cannabis that Rizk had opened after Clarendon in Phoenix, Arizona, and had ambitious plans to expand his concept of marijuana hotel under his elevations brand in the west, from California to Oregon and convert in the “cannabis kimpton.”
Rizk soon realized that being tolerant with cannabis was not an advantage in Las Vegas: although cannabis consumption is officially prohibited in casinos and in the strip, the application of the law is very lax. Rizk states that many known establishments ignore the vapeo and consumption of marijuana of its customers.
Five months after inaugurating The Lexi, Rizk realized his mistake: the occupation reached 30% and began to lose offers to celebrate weddings and other group events against competitors who do not serve cannabis consumers. Rizk sold The Clarendon and is in the process of renewing The Lexi’s mark. After stopping promoting property as a suitable for cannabis consumption, the occupation shot 15%.
“Unfortunately, this adventure could cost me all my career,” says Rizk, who personally invested 5 million dollars at the 64 -room hotel only for adults, which he bought with other investors for 12 million dollars in 2022. “He gives the hotel the stigma of being a meeting place for fumetas and most people do not want to be associated with that.”
Despite Rizik’s warning, Las Vegas constantly discusses how to integrate cannabis and casinos, especially now that the game’s income has decreased this year. The volume of visitors in Las Vegas has also decreased 6.5 % between January and April 2025, according to the Las Vegas Convention and Visitors Authority. Even visitors’ satisfaction has decreased. 87 % of visitors in 2024 declared themselves “very satisfied” with their visit, compared to 94 % of 2019, according to the study of the Las Vegas visitor of 2024.
Meanwhile, revenue from gambling from the Strip casinos have decreased 3.3 % during the last nine months compared to the same period of the previous year, according to the Nevada Game Control Board. In 2024, the Las Vegas Strip casinos raised 8,800 million dollars only in games, a 1 % decrease with respect to the 8,900 million dollars of 2023. Although the total revenues due to games of chance, hotels, restoration and attractions of the Las Vegas strip reached a record of 22,000 million dollars, an increase of 6.8 % compared to 2023, the profits collapsed 40 % in comparison with 2023.
But cannabis is not the answer.
The city, to which 42 million tourists come every year to enjoy legal vices, already houses several important conferences about cannabis, such as the MJBizcon, the Women in Cannabis Expo and the Nevada Cannabis Awards Music Festival. The State legalized medicinal marijuana in 2001 and recreational in 2020, but due to federal law and snowfall playing rules, casinos cannot invest or participate in the marijuana trade regulated by the State without risking losing their game license. Nevada legislators have gone further and instituted rules that prohibit dispensaries less than 450 meters from a licensed casino and prohibit them from delivering legal orders in the strip.
Read more: cannabis as an economic engine in hotel and gastronomy
Why Las Vegas casinos do not bet on cannabis
More than anything, gambling operators have a lot to lose if cannabis consumption is sanctioned. In 2024, Wynn Resorts generated 2.6 billion dollars in revenue with its two properties in Las Vegas, the eight properties of Caesars Entertainment in Las Vegas registered 4.3 billion in revenues and the eight properties of MGM Resorts generated 8.8 billion in revenues. These three joints generate almost half of the 32 billion dollars in sales that the US cannabis industry recorded in 2024. All casinos in the strip generated 22 billion last year.
In other words, doing business with the cannabis industry would be a death sentence for casinos operators. Soo Kim, president of Bally’s Corporation, who is building the new Las Vegas stadium in the old land of the recently demolished Tropicana to house the Athletic baseball team once Oakland is transferred, he says that incorporating cannabis into any casino is impossible.
“Chance games are part of the federal banking system, so the problem with cannabis is that (gambling operators) cannot participate because it is prohibited at the federal level,” he says.
And even if the federal law changes and casinos can legally open a cannabis consumer hall within the property, Kim says that he is not yet very convinced of the idea.
“I’m not sure it’s a great attraction for business,” says Kim. “I don’t see it right now.”
Seth Schorr, executive director of Fifth Street Gaming, which operates the Downtown Grand Hotel and Casino in Las Vegas, does not share Kim’s skepticism. Schorr affirms that casinos should find a way to capitalize on cannabis, but admits that it is not a miraculous solution. Even so, Schorr believes that all available tools are needed, even if they only serve for some aspects. In Las Vegas it is important to think about the next ten years and cannabis has become an acceptable entertainment form.
Despite The Lexi’s problems, a plurality of players who participated in a survey published by the Cannabis Policy Institute of the University of Nevada, Las Vegas, in May, said they wish to enjoy cannabis and bets simultaneously. The survey revealed that around 40 % of respondents would bet on a casino that allowed cannabis consumption, while 29 % would not want to do so and 30 % said that a policy in favor of cannabis would not make them change their minds. 59 % of respondents said their game habits would not change if they were allowed to bet and ingest cannabis, while 24 % said they would bet more and 19 % said they would bet less. Finally, 70 % were in favor of a hotel and casino had a designated area for cannabis consumption.
Riana Durrett, a lawyer specialized in gambling and director of the Cannabis Institute of the University of Las Vegas, who collaborated in the completion of the survey, claims to understand why the two “sins” of cannabis and bets are isolated to prevent the operators of gambling to violate the federal law. However, he affirms that the strict rules of Nevada go beyond protecting the multimillionaire industry of the city to violate the Law of Controlled Substances. Durrett states that regulators and operators of gambling, which are not willing to, at least ask questions about how both industries can be more symbiotic, are ignoring the fact that, in the United States, today more cannabis is consumed daily than alcohol.
“We do a good job by regulating the vice: you can bet, you can visit a sex worker, cannabis can be consumed, but we have these excessively wide artificial barriers between cannabis and gambling that are not even effective,” he says, explaining that prohibiting legal marijuana gives an advantage to the black market in the casinos. “We need a realistic debate and approach on how to license the activities that are already carried out and obtain the income that is lost in the illegal market.”
Brendan Bussmann, managing partner of B Global, a consulting firm focused on games and hospitality, says that Las Vegas’s greatest ability is his ability to offer entertainment to the masses, but that the debauchery in which everything is worth for which he is famous without City is like a show by David Copperfield: to a large extent an illusion.
“Yes, here you can play games and yes, you can have fun in many different ways,” says Bussmann, “but we are not here to say that there are no rules.”
Bussmann compares the conversation about cannabis with prostitution, which many erroneously legal in Las Vegas. In fact, it is illegal in Clark County, but legal in a license brothels in six of the 17 Nevada counties.
“You can easily ‘go to the other side of the hill to Pahrump’, the place closest to Las Vegas where prostitution is legal,” says Bussmann, “but that was designed on purpose to (clean) the act of play” since its inception as a company controlled by the mafia until one that is now owned by corporate giants.
When it comes to risks, it would be nonsense for any casino to enter the illegal world at the federal level of marijuana, although 39 states have some regulated sales.
“(Cannabis) directly violates the federal law, so the game cannot take the same freedoms as other businesses,” says Bussmann. “And although Nevada voters have approved it, no conversation should even consider it.”
This article was originally published by Forbes Us.
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