Nevada has knocked Colorado off the marijuana mountain, at least in terms of legal, recreational sales. The latest monthly data from Nevada’s recently opened recreational marijuana dispensaries shows that Nevada sales now surpass Colorado sales of adult-use cannabis.
The Las Vegas Review-Journal reports that Nevada sold $39.1 million of marijuana in October 2017. That’s a record-breaking number in the state’s fourth month of recreational cannabis sales.
“We are pretty on target with projections, maybe a little over,” Department of Taxation spokesperson Stephanie Klapstein told the Las Vegas Review-Journal.
Recreational marijuana sales became legal in Nevada on July 1, 2017. The department releases each months sales total about six weeks after that month’s end.
That lag means we can’t assess the full magnitude of 2017 Nevada marijuana sales until a couple months into 2018. But sales have been gangbusters, and Forbes points out that Nevada has passed Colorado as the most lucrative state for recreational marijuana sales.
In July, Nevada dispensaries sold $27.1 million of cannabis in the first month of recreational sales. August was the previous record month for dispensaries, with $33.4 million in sales, according to the Review-Journal. September registered $27.7 million in sales.
The Journal speculates that the sales increases are likely due to a larger number of individual Nevada towns adopting their own local regulatory frameworks for marijuana sales. While the entire state did permit sales on July 1, cities were allowed to delay in writing up their own rules. The city of Henderson, Nevada’s second-largest town, did not allow sales until October.
Combining the four months of legal sales at Nevada dispensaries, a total of $126 million of legal cannabis has been sold in Nevada. Should that rate continue, the Nevada market alone will account for half a billion dollars annually in sales.
Nevada taxes marijuana on a few different levels. For regular consumers, the state levies a 10 percent retail tax on all cannabis sold over the counter. Department of Taxation officials estimate that marijuana sales tax generates roughly a million dollars a month for the state, all of which goes into the state’s rainy day fund.
But marijuana is essentially “double-taxed” in Nevada. And the real money lies in Nevada’s 15 percent excise tax levied on all marijuana sales, be they wholesale or retail.
“That tax has generated almost $6.5 million since recreational sales kicked off July 1,” Jamie Munks writes in the Las Vegas Review-Journal. “The state forecasts it will bring in over $56 million in revenue over the first two years of recreational sales.”
The excise tax goes to Nevada schools once state and local officials have deducted administrative costs.
And yes, Nevada marijuana consumers do end up paying a 25 percent tax altogether with both the retail tax and excise tax combined. This doesn’t appear to be much of a deterrent so far.
So the “silver state” takes the gold medal for recreational cannabis sales among all states that currently allow adult use of marijuana. But don’t expect Nevada to wear that crown for long.
California begins selling and taxing recreational marijuana on January, 1, 2018. And California sells an estimated $845 million of legal marijuana annually, even with the medical-use only restriction. When California permits recreational sales, it will rapidly become the most lucrative adult-use state.
Photo: NuWu, Las Vegas, NV, “The world’s largest marijuana store.” © 2017, R&D Cannabis Marketing