Legalized recreational marijuana is a hit in Nevada, so much so that the state’s pot stores are almost out of supply after just 10 days.
On Friday, Gov. Brian Sandoval endorsed the department's call for a "statement of emergency," which would allow for more licensed distributors, the Reno Gazette-Journal reported. The problem is pretty simple: there’s no supply for a booming demand.
Nearly 50 dispensaries in the state have licenses to sell marijuana for recreational use. Those sales got underway on July 1. But those same retailers do not legally have the authority to restock their inventories.
In the first four days that Nevada residents could legally purchase marijuana for recreational uses, state retailers made $3 million in sales—and lined the state government's coffers to the tune of a cool $500,000 in tax revenues, according to the local media.
The Reno Gazette-Journal reports that under the emergency regulations the taxation department would consider a larger pool of applicants for distribution licenses, potentially alleviating the shortages. The Nevada Tax Commission will vote on the regulation on Thursday.
Allowing for rounding, that only accounts for about 15 percent of sales—which is the state excise tax on the first wholesale sale. Nevada also imposes a 10 percent retail excise tax on recreational sales, and then adds in sales tax, which varies from just under 7 percent to over 8 percent according to where you are. Let's call the total tax take about 32 percent of legal recreational marijuana sales. That's a really high tax rate to impose on any industry—especially one that was thriving (albeit illegally) and entirely untaxed less than two weeks ago.
Stephanie Klapstein, a spokeswoman for the Department of Taxation, told the Reno Gazette-Journal that a collapsed marijuana market would have far-reaching consequences. A 15% tax on the cultivation of marijuana generates revenue that the state spends on public education.
Residents and tourists who are 21 and over can buy up to an ounce of marijuana or one-eighth of an ounce of edibles or concentrates — but only while supplies last.
All eyes, though, are on California, which will begin legal recreational marijuana sales in 2018 (no specific date has been announced). Legal pot there is expected to bring in a smoking $5 billion in sales each year.
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