Nevada’s first state-licensed cannabis consumption lounge, Smoke and Mirrors, has closed its doors just 14 months after opening, according to a report by KLAS. Operated by Thrive, the Las Vegas-based lounge had been seen as a potential model for cannabis hospitality in the state, but its closure underscores the growing challenges facing the emerging lounge industry.
As of now, only one other state-licensed lounge remains operational in Nevada, alongside a separate consumption lounge operated by the Las Vegas Paiute Tribe, which functions outside of state licensing requirements. While 21 other lounges have received conditional approval from the state Cannabis Control Board (CCB), they have yet to open due to complications related to financing and location. Additionally, 10 licenses have been reserved for social equity applicants, but none have been activated.
The closure comes as cannabis sales across the state have declined. In fiscal year 2024, taxable cannabis sales dropped to $829 million — down 17% from 2021, according to CCB data.
The high cost of launching a lounge has been a barrier. State law mandates $200,000 in operational liquidity before opening. Further limitations include a ban on cannabis-infused food, restrictions on patrons taking home leftover products, and a requirement that all purchased cannabis be consumed on-site — all of which constrain the business model for lounge operators.
As stakeholders in the cannabis space await further reforms, the future of Nevada’s cannabis lounges remains uncertain.
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