Nevada has sold upwards of $3 million worth of cannabis product since going recreational on July 1st, which means over $1 million of those funds will go to the state as tax revenue. This great news was quickly overshadowed by the fact that Nevada dispensaries are running out of cannabis to sell, according to the state’s Department of Taxation.
However, Governor Brian Sandoval with support from the Nevada Department of Taxation has declared a “state of emergency” only ten days after allowing recreational sales to take place in the state. A statement of emergency could bring relief to cannabis patients and recreational shoppers.
The Nevada Tax Commission will vote this Thursday on a regulation that would allow licenses issued to a larger pool of applicants, including those outside the alcohol business.
Why is Nevada experiencing a state of emergency?
A provision in Nevada’s legalization law gave the state’s wholesale liquor distributors exclusive rights to distribute recreational cannabis for the first 18 months of sales. This rule was set to “promote the goal of regulating marijuana similar to alcohol” — and as many other’s agree to protect liquor stores from losing business as the demand for recreational marijuana increases.
To date, Nevada is the only state with legal marijuana that has such an arrangement.
Unfortunately, only seven liquor distributors have applied for this position in the cannabis industry, and to make matters worse, none of them meet the required standards to obtain a marijuana license.
When the Department of Taxation first attempted to license outside distributors they were met with a lawsuit and a court order to respect the law as written, meaning they wanted the distributor rights to be left to liquor industry only.
Where is the tax revenue going to?
“Revenue collected from the 15 percent cultivation tax goes toward schools, while the 10 percent sales tax revenue goes toward the state’s rainy day fund, which can be used for any number of expenditures (rgj.com).”
What happens next in Nevada?
Blackbird Logistics has been awarded an exclusive operating agreement with an alcohol distributor that allows it to distribute cannabis, and Blackbird also has an option to acquire the distributor in the future. This will allow for cannabis sales to continue until a more permanent solution can be made.*
This BREAKING update came from our friends at New Cannabis Ventures.
Please stay tuned as we keep you updated with any new developments.
To learn more about what’s happening in Nevada check out these articles below: