Nevada Governor Brian Sandoval sounded the alarm July 7th, after the $4 million first week of sales for the state’s new adult-use cannabis industry — and the inability to restock — may see the new dispensaries hitting a wall barely 10 days out.
While only 6 or 7 exclusive liquor industry distributors have put in applications to be Nevada wholesalers, none are yet licensed, and the governor is looking to a July 13th emergency meeting to speed those licenses, or to find others if a roadblock emerges. The 46 combined Medical/Recreational Nevada stores cleared for opening on July 1 all reported very brisk sales, and despite their best efforts, their one-time stocking-up inventory may be winding down.
“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,” the Nevada department of taxation statement said.
The designation of liquor-industry wholesalers as first, one-and-half-year exclusive firms to carry finished product from growers to retailers as the middle-man was included in the Nov., 2016 legalization language. It was negotiated, in part, so that liquor interests would not oppose the legalization vote. However, the slow pace that liquor wholesalers have applied for the exclusive status may have to do with not jeopardizing any federal certifications held by the alcohol handlers.
Which begs the question: Will the advent or widespread access to legal cannabis curtail alcohol consumption, and potentially slow consumer gambling? Cannabis expert Jeff Friedland shared his thoughts in this op-ed released July 5th: “There is little doubt that the use of alcohol fuels gambling. Many casinos provide free drinks to encourage hitting the slots and tables. The 64-thousand dollar question is, will consumers high on marijuana spend more time at gaming tables and slots, or will marijuana consumption decrease their gambling? This implication of the legalization of recreational marijuana in Nevada could very well kill the state’s ‘golden goose,’ “ writes Friedland.
“The impact of the recreational marijuana industry could pose a devastating blow to Nevada’s cash-cow, its casino and hotel industry,” notes Friedland. According to the Nevada Resort Association, the Silver State’s tourism sector was responsible for $13 billion in wage and salary payments in 2016, which when coupled with secondary impacts, totaled more than $19 billion.
Friedland notes that 2016 was a great year for Nevada’s casino industry with revenues increasing to over $25.2 billion, up from $24.6 billion in 2015. The industry generated an income of an impressive $979 million, a tremendous turnaround from losses of $661 million in 2015. 2016 was the first year of profitability for the state’s casino industry since 2008. During the 2015 fiscal year, over 273 casinos in the Nevada grossed over $1 million in gaming revenue.
State regulators overseeing the gaming industry have forbidden any cross-ownership between medical or recreational license-holders and ownership in Nevada gaming. And throughout Las Vegas, public consumption of cannabis may be fined with a $600 ticket. However, through the 4th of July, Vegas area law enforcement said they reported zero incidents among partyers enjoying legal pot.