A new report from New Frontier and Arcview Market Research projects that Nevada could pull in $629.5 million in cannabis sales by 2020.
If Nevada voters opt to legalize adult use marijuana this November, their state will hit a projected $629.5 million in legal cannabis sales by 2020, according to a new report.
The 2016 Nevada Legal Cannabis Market State Profile, published in July by New Frontier in partnership with Arcview Market Research, projects that legal marijuana sales in Nevada would grow at a compound annual growth rate of 51 percent, with sales jumping from $121.6 million in 2016 to $629.5 million by 2020.
“If Nevada legalizes adult use cannabis, we will witness an unprecedented socio-economic impact in a state already shaped and fueled by tourism and entertainment,” said Giadha DeCarcer, Founder and CEO of New Frontier. “The scale of the impact is expected to be massive — by 2020, adult use markets are projected to add an additional $484.3 million in annual sales, and account for almost three quarters of the total legal cannabis market in Nevada.”
Nevada voters will be presented with the Initiative to Tax and Regulate Marijuana (Question 2) this fall. If passed, the measure would legalize marijuana for adults 21 and over and would tax and regulate marijuana similarly to alcohol. A 15 percent excise tax would be imposed on wholesale sales and general state and local sales taxes would apply to retail sales, with proceeds going to the state’s regulatory program and into the state general fund earmarked to fund K-12 education. The law would take effect January 1, 2017.
“I believe that our tax dollars ought to be spent on improving our schools – not building new jail cells,” said Democratic state Senator Nelson Arajo. “Legalizing marijuana will not only help improve Nevada’s justice system, but add a new tax revenue source to our state that will increase teacher pay, reduce class sizes, and build new schools.”
The 2015 State of the State Survey by UNLV found that 55 percent of registered Nevada voters are in support of adult use marijuana legalization.
“No matter how you look at the issue of marijuana, it is clear that we will be better off regulating it like alcohol, rather than having it sold in the underground market,” said state Senator Patricia Spearman. “There will be tax revenue from sales, tax revenue from businesses, and tax revenue from employees. None of that is generated when marijuana is sold illegally. Best of all, we can use this revenue to address critical public funding needs in the state.”
If voters pass the initiative, Nevada will join Colorado, Oregon, Washington, Alaska, and Washington D.C. as the only states or U.S. territories to have passed adult use marijuana legislation.
“2016 is poised to be the tipping point for the cannabis industry. Nevada is just the beginning of the significant opportunities for investors and entrepreneurs that lay ahead in the sector, especially given its top tourist destination rank,” said Troy Dayton, CEO of The Arcview Group.
California will also be voting on a similar adult use marijuana measure in November. Proposition 64, if passed, will permit adults aged 21 and over to possess and cultivate a limited amount of marijuana for recreational use.