Tourism on the Las Vegas Strip is lower this year, but allowing weed use isn’t the answer. Letting people use cannabis openly in major casinos could actually hurt their business badly.
In June 2023, real estate investor Alexandre Rizk opened The Lexi, a cannabis-friendly hotel just off the Las Vegas Strip. He thought it was a brilliant idea that would make millions.
At The Lexi, smoking weed was only allowed on the fourth floor. Each room there had air filters, and all the suites were numbered 420. This was Rizk’s second cannabis-friendly hotel—his first was the Clarendon in Phoenix, Arizona. He hoped to grow his hotel brand, Elevations, across the western U.S., from California to Oregon, and become a leader in weed-friendly hospitality.
But Rizk soon realized that being cannabis-friendly didn’t make his hotel stand out in Las Vegas. Even though using cannabis in casinos and on the Strip is officially banned, most places don’t really enforce the rules. According to Rizk, many well-known hotels ignore guests who vape or use weed.
Just five months after opening The Lexi, Rizk saw things weren’t going well. Occupancy was stuck at 30%, and he was losing out on weddings and group events to hotels that didn’t allow weed. He sold the Clarendon and began rebranding The Lexi. Once he stopped promoting it as cannabis-friendly, bookings went up by 15%.
“This could end my career,” Rizk said. He had put $5 million of his own money into the 64-room, adults-only hotel, which he and other investors bought for $12 million in 2022. “People see it as a stoner hotel, and most don’t want to be part of that.”
Even though Rizik’s story is a warning, Las Vegas is still trying to figure out how to mix cannabis with its casino business—especially since casino earnings have gone down this year. From January to April 2025, the number of visitors to Las Vegas dropped by 6.5%, according to the Las Vegas Convention and Visitors Authority. Visitor satisfaction also dropped. In 2024, 87% of visitors said they were “very satisfied,” compared to 94% in 2019.
Casino profits are also down. Over the past nine months, gaming revenue on the Las Vegas Strip dropped by 3.3% compared to the same time last year, according to the Nevada Gaming Control Board. In 2024, casinos made $8.8 billion from gaming alone, slightly less than the $8.9 billion made in 2023. Even though total revenue from gambling, hotels, food, and attractions reached a record $22 billion (up 6.8% from 2023), overall profits fell by 40%.
However, cannabis is not the solution.
Las Vegas already hosts many big cannabis events like MJBizCon, Women in Cannabis Expo, and the Nevada Cannabis Awards Music Festival. Nevada legalized medical marijuana in 2001 and recreational use in 2020. But because marijuana is still illegal under federal law, casinos can’t get involved without risking their gaming licenses. State laws also ban cannabis dispensaries within 1,500 feet of casinos and don’t allow delivery to the Strip.
Casino companies have too much to lose by getting involved with cannabis. For example, in 2024, Wynn Resorts made $2.6 billion, Caesars earned $4.3 billion, and MGM Resorts brought in $8.8 billion from their Las Vegas properties. Together, that’s almost half of the $32 billion made by the entire U.S. cannabis industry. All Strip casinos combined earned $22 billion last year.
In short, casinos see cannabis as a major risk. Soo Kim, chairman of Bally’s Corporation, which is building the new Las Vegas Stadium for the Athletics baseball team, says mixing cannabis and casinos is out of the question.
“Casinos use the federal banking system,” Kim explains. “Because cannabis is illegal under federal law, casinos can’t be involved.”
Even if the law changes, Kim still doesn’t think it would help casinos.
“I don’t think it would attract many people,” he says. “I just don’t see the benefit.”
But not everyone agrees. Seth Schorr, CEO of Fifth Street Gaming, which runs the Downtown Grand Hotel and Casino, says casinos should look at ways to benefit from cannabis, even if it’s not a big boost.
“It’s not a perfect solution,” Schorr says. “But in Vegas, we have to plan for the future, and cannabis is now seen as a normal part of entertainment.”
Even though The Lexi hotel is facing problems, many gamblers still want to use cannabis while gambling. A recent survey by the Cannabis Policy Institute at the University of Nevada, Las Vegas found that around 40% of people would visit a casino that allows cannabis use. About 29% said they wouldn’t, and 30% said it wouldn’t affect their decision. Also, 59% said their gambling habits wouldn’t change if cannabis use were allowed, while 24% said they’d gamble more, and 19% said they’d gamble less. Around 70% supported the idea of having a special area for cannabis use in a hotel or casino.
Riana Durrett, a gaming lawyer and head of the Cannabis Policy Institute, helped with the survey. She understands that cannabis and gambling are kept separate to avoid breaking federal laws. But she believes Nevada’s rules are too strict. She says regulators are ignoring the fact that more Americans now use cannabis daily than drink alcohol. She thinks the laws should be updated to reflect what’s really happening and to reduce illegal cannabis sales near casinos.
Brendan Bussmann, a consultant who works with casinos and hotels, says Las Vegas is known for fun, but it still has rules. He compares the cannabis issue to prostitution—many think it’s legal in Las Vegas, but it’s actually banned in Clark County. It’s only legal in a few licensed places in other parts of Nevada.
He adds that no casino should risk allowing cannabis since it’s still illegal under federal law, even if most U.S. states have some legal cannabis sales. Bussmann believes that as long as it’s against federal law, casinos shouldn’t get involved with it at all.
Published: 16th June 2025
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