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Marijuana Will Be Available to Buy in Nevada Earlier Than Expected

Consumers in Nevada will be able to purchase recreational marijuana as soon as July 1, instead of next year as originally expected.

In less than two months, adults in Nevada will be able to legally purchase recreational marijuana from state-regulated dispensaries. The Nevada Tax Commission has voted to adopt the regulations proposed by the Department of Taxation that will allow the issuance of temporary recreational marijuana licenses by July 1, rather than the program waiting until January 1 of next year for launch as originally planned.

These temporary licensed will be issued to existing medical marijuana dispensaries and will expire on January 1, but the “early start” will give the state Department of Taxation an opportunity to test regulations before the program goes into full effect in 2018. It will also give shops an opportunity to sell marijuana products months earlier, bringing in additional revenue for the state.

The state will collect an excise tax of 15 percent on wholesale recreational marijuana, and retail sales will also be subject to standard sales tax. Deonne Contine, tax department director, explained that issuing temporary licenses is essential for Nevada to successfully meet Gov. Brian Sandoval’s proposed budget request, which includes $70 million from retail marijuana taxes over two years to support public education.

“If we don’t adopt the regulations, we will not have a temporary program. If we don’t have a temporary program, we will not have the revenue that’s included in the governor’s budget,” said Contine.

By giving temporary licenses to dispensaries that are already operational, the “early start” program would also allow the state’s recreational marijuana industry to take hold and establish itself more quickly. Right now, marijuana possession is legal to possess, but not purchase, and that discrepancy could be boosting the illegal market. The state’s legal market is projected to reach $630 million in sales by 2020.

Recreational and Medical Marijuana

The tax department will accept applications for temporary licenses from medical marijuana companies and distributors that have been in good standing for at least six months. Those companies interested in applying for a temporary license must pay a one-time, nonrefundable application fee of $5,000. Additionally, license fees are $20,000 for a retail store, $30,000 for a cultivation facility, $10,000 for a production and manufacturing facility, $15,000 for a testing facility, and $15,000 for a marijuana distributor. The department started accepting license applications on May 15.

Critics of the newly adopted temporary regulations include operators of the state’s liquor distributors, who argue that they were promised first dibs on marijuana distribution licenses. The Department of Taxation, however, determined there were an insufficient number of liquor distributors to adequately handle marijuana distribution.

Nevada was one of four states that legalized recreational marijuana in 2016. Its recreational marijuana program, once operational, will allow adults to legally purchase up to an ounce of marijuana or 1/8 ounce of purified cannabis concentrates. The law also allows adults to cultivate up to six marijuana plants for personal use.

Marijuana retailers are required to obtain both state and local licenses to operate, and most counties have yet to approve their own regulations.

A total of eight U.S. states and Washington D.C. have so far legalized recreational marijuana. Last week, Vermont lawmakers approved an adult use measure that is currently being considered by the governor. A recent market analysis projected that legalization could reach all 50 states by 2021.

Learn more about cannabis laws in Nevada and throughout the U.S. by visiting our education page.