Two truths that have emerged regarding cannabis sales in Nevada: 1) The sale of recreational marijuana is bringing hundreds of millions of dollars into the state each year; and, 2) Unless a court does something to unwind the 2018 application process for new licenses, Nevadans will lose a significant share of the economic benefits from marijuana sales moving forward.
First, the good news. The first full year of recreational cannabis sales in Nevada generated more than $500 million in gross revenues. Those sales yielded $70 million in taxes for a wide range of needs for Nevadans.
Economists tell us that, in the Las Vegas Valley, each new dollar multiplies 3.5 times before it leaves the local economy. Therefore, the $500 million mushrooms to $1.75 billion — and that is each year before any anticipated growth.
But now a good portion of that future revenue growth may be lost.
When voters passed the 2016 initiative on recreational cannabis sales, then-Gov. Brian Sandoval made a decision to speed up implementation. It was called the “Early Start” program, which quickly awarded about half of the newly available recreational dispensary licenses. The process was simple. The medical marijuana license holders who were in good standing received the Early Start recreational licenses. Because the application process for medical marijuana put emphasis on applicants who were Nevada residents, the resulting pool of recreational owners was comprised largely of Nevadans.
But licensees, like our company, that run by-the-book operations were turned down for the next round of the recreational dispensary licenses in 2018 in favor of out-of-state and foreign interests.
This new 2018 round of licenses granted by the Department of Taxation were graded by temp workers from Manpower with no experience overseeing either the medical or recreational marijuana programs. In a completely opaque process that neither