Workers sorting cannabis buds at a legal grow house. (Nevada Current file photo)
Southern Nevada law enforcement announced in April that they’d made their largest indoor marijuana grow operation bust ever: 5,700 individual plants, weighing more than 860 pounds and valued at nearly $9 million.
“We estimated that they were producing close to $20 million a year tax-free just based on that warehouse and the volumes they were producing,” said Josh Garber, a detective for the Las Vegas Metro Police Department (LVMPD).
Despite legalizing the sale and possession of marijuana for recreational use, Nevada continues to maintain a large number of unlicensed retailers, competing against legal dispensaries and denying the state and local government of tax dollars, said regulatory and law enforcement officials at the first annual NV Cannabis and Vaping Summit on Tuesday.
“Once you legalize cannabis in a state, in most cases, most of the illegal market share transitions to a legal market naturally,” said Tyler Klimas, executive director of the Nevada Cannabis Compliance Board, who spoke at the summit. “However not all of it transitions and in fact some new illegal market activity comes into existence, the kind that uses the legal market as a shield.”
State-licensed recreational cannabis dispensaries began opening across Nevada three years ago, but government officials admit the black market is here to stay.
“The illegal market will remain. It’s inevitable no matter how much attention you give to tax rates,” said Klimas.
The Nevada Cannabis Compliance Board, an agency that governs the state’s cannabis industry, does not have data on the size and scope of the illegal market, said board member Riana Durrett. Most of what the board does know is information shared by law enforcement.
However, data collected by other states can bring some insight into the scope of the illegal