Recreational Marijuana Revenue on Pace to Exceed Projections
After six months of recreational marijuana sales, revenue is already more than $30 million, on pace to reach $60 million for the year.
Nevada's recreational marijuana industry is still in its infancy, but it is already making quite a splash in the tax pool. The Department of Taxation projected tax revenue from pot retail and wholesale would be about $50 million. After six months of sales, the revenue is already more than $30 million, on pace to reach $60 million for the year.
"I'm not so surprised but I do think this shows that marijuana is fitting in quite well in Nevada and it's part of our economy, and it's generating a lot of tax revenue for the rest of the state," Will Adler, Director of the Sierra Cannabis Coalition said.
"$30 million in tax revenue tells us that the people of Nevada are embracing recreational marijuana," Assem. Teresa Benitez-Thompson, D-Reno said. "It tells us that obviously the demand is there."
The tax money goes into different pots. Most of the 10 percent retail tax revenue goes to the state's rainy day fund, while the 15 percent wholesale tax helps fund the Department of Taxation, local jurisdictions, and education. If revenue from pot sales continues at this pace, it will leave extra money for the budget.
"They're not coming in short, in which case state officials would have to take action to try to gap those holes, so the fact that our revenue collections are coming in a little bit higher is a good thing," Bill Anderson, Director of the Department of Taxation said. "All things considered, we're very pleased with how the numbers here came in."
That money can begin being distributed now that the Legislative Commission approved permanent regulations for recreational marijuana sales, beating the March 1 deadline.
"Within the next month, probably sooner, we'll start funneling those county and sub-county jurisdiction their monies," Anderson said.
The regulations come more than a month after the Taxation Commission approved the guidelines. The guidelines will allow dispensaries to deliver recreational marijuana. It will also tighten up security in dispensaries and require stricter testing.
"They were very stringent and my main concern was, and I couldn't hold the regs on that account, but how many people it's going to take to enforce those regs," Sen. Pete Goicoechea, R-Eureka said.
Goicoechea did not support the legalization of recreational marijuana, and he still has concerns. Since this is such a new industry, he expects regulations to evolve.
"We're going to make some mistakes and we're going to fall through some cracks," Goicoechea said. "No doubt about it but I think ultimately we can move forward and when we get to the next session, we can deal with some of the real glaring pitfalls."
Benitez-Thompson says the regulations are among the best in the country, since some of them are modeled after the existing medical marijuana industry. Approving the regulations before the temporary ones expired was also critical.
"Otherwise, we would have a completely unregulated marijuana industry in this state and nothing would be worse than to have an industry potentially be able to run amock," Benitez-Thompson said.
She also says it sets a standard that federal officials could feel more comfortable with.
"It gives them a comfort level that we're not 'Wild West Nevada' when it comes to marijuana," Benitez-Thompson said. "We're very buttoned down."
Not everyone is happy with the regulations, including many cultivators. People who have a license to grow marijuana do not have the ability to sell it on the retail market. Some retailers, on the other hand, can grow and sell their product. Growers say that puts them at a disadvantage, but the regulations do not change that guideline.