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Nevada Nearly Out of Marijuana After Less Than Two Weeks of Legal Sales

Legalized recreational marijuana is in such high demand in Nevada that state dispensaries have nearly run out after just two weeks of sales.

Nevada marijuana dispensaries have experienced higher-than-expected sales since the state’s adult use program began operating July 1. According to the state Department of Taxation, after less than two weeks of sales, licensed dispensaries are running out of their cannabis supply. The shortage has prompted the department to request a “statement of emergency.”

“Based on reports of adult-use marijuana sales already far exceeding the industry’s expectations at the state’s 47 licensed retail marijuana stores, and the reality that many stores are running out of inventory, the Department must address the lack of distributors immediately. Some establishments report the need for delivery within the next several days,” said Department of Taxation spokeswoman Stephanie Klapstein, in an email to USA Today.

Gov. Brian Sandoval has endorsed the taxation department’s “state of emergency,” which allows state officials to consider adopting emergency marijuana regulations to help alleviate the shortage. The Nevada Tax Commission is meeting Thursday to consider adopting such emergency regulations, and to determine whether the state has an adequate number of wholesale marijuana distributors.

As of right now, only existing medical dispensaries are allowed to sell to adult use consumers. Eventually, distribution opportunities will open up to companies that are also licensed to distribute liquor. The limited number of operational dispensaries throughout the state, currently 47, is why dispensaries are running out of supply. At least seven wholesale liquor dealers have applied to become marijuana distributors, but none have yet received a license.

“We continue to work with the liquor wholesalers who have applied for distribution licenses, but most don’t yet meet the requirements that would allow us to license them. Even as we attempted to schedule the final facility inspection for one of the applicants this week, they told us their facility was not ready and declined the inspection. As of mid-day Friday, not one distribution license has been issued,” Klapstein said.

Recreational and Medical Marijuana

The Nevada Dispensary Association estimates that the 47 dispensaries generated $3 million in sales between July 1-4. Nevada’s legal marijuana market is projected to reach nearly $630 million by 2020. However, adjustments are needed if the state is going to effectively support new cannabis businesses and prevent customers from returning to obtaining cannabis from the illegal market. The Department of Taxation may decide to consider a larger pool of applicants for distribution licenses.

“The business owners in this industry have invested hundreds of millions of dollars to build facilities across the state,” Klapstein said. “They have hired and trained thousands of additional employees to meet the demands of the market. Unless the issue with distributor licensing is resolved quickly, the inability to deliver product to retail stores will result in many of these people losing their jobs and will bring this nascent market to a grinding halt. A halt in this market will lead to a hole in the state’s school budget.”

Nevada is one of eight U.S. states that have legalized adult use cannabis. Its recreational marijuana law allows adults ages 21 years and older to purchase and possess up to an ounce of marijuana, or an eighth of an ounce in edibles.

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