Nevada is set to enter the Green Zone this summer. Namely, the state is the first out of the block of the states that legalized medical use in last November’s election to actually implement legal recreational sales.
The state legislature and governor have rushed through a regulatory scheme to get the state’s legal marijuana business up and running less than a year after voters legalized the same at the voting booth. As a result, legal recreational sales are set to begin here on July 1.
In sharp contrast, California, Maine, and Massachusetts which legalized recreational use at the same time will not begin sales until 2018.
Governor Sandoval, however, wants to make sure his state is in a position to collect what could be close to $70 million in marijuana taxes by 2019 to fund schools, roads, and bridges in his state.
Further, Nevada’s production and licensing scheme have been set up for this possibility from the start.
Why is Nevada’s System Different?
While every legalizing state so far has been different, Nevada’s story is not only intriguing. It also is one of the few states who has been in this with a long eye from the beginning.
Part of this is understanding the economy in Nevada. It is basically a sandy desert with no coast. Its main industries, if not its most flamboyant and headline-grabbing ones, literally, have been in the “sin” industries. Las Vegas was originally created by the mob as a way to party outside of California state law.
Attracting old people who gamble, and younger ones who want to be entertained in some way has always been the stock in trade of the state. Prostitution is also legal here. And while the medical efficacy of the drug is important here like anywhere else, that has also always been seen as a way to prop up other industries. That is why Nevada gave visitors the first state reciprocal medical marijuana rights in the country.
That is also why the state is moving, like a rocket, to set up the next piece of a lucrative industry and ultimately financed and supported by people who want to either have a good time, feel relief from pain, or a little bit of both.
What the New Regulations Allow
The licensing process will allow both existing medical dispensaries in good standing to continue to operate as well as allow new entrants to the recreational market. The taxation department will also set the tone for how many shops are allowed to operate per county.
In counties with a population of more than 700,000, the state will allow up to 80 cannabis stores. That means Las Vegas of course. Counties with a population of 55,000 and under will only be served by two stores. The rest fall in the middle.
Medical sales will be taxed at 2%. Recreational users will pay 15% sales tax.
Obviously, this means that for Nevada, the bulk of business operations will be connected to the gambling industry in some way. Further, it also means the state is clearly targeting the lucrative tourism industry.
Ultimately what this also means is that the majority of the state industry will be targeted to tourists. And the majority of those tourists, whether they are sick or not, will also probably end up paying the higher cannabis tax. Short term visitors who want to maximize gambling and leisure time do not want to waste time looking for medical dispensaries.
What this also means, in effect, is that Nevada is the first state to successfully begin to target canna tourism. Other states so far have shied away from this. However, this is undoubtedly a huge part of the state’s focus. It is also clear that this has been the case right from the start.
What this Means for the State
In being a kind of “first” again this time around, Nevada is not trying to rewrite pot history in other ways. They are going for speed, not creativity. That means they are also adopting ideas from other states and even their own booming medical industry.
This means on the taxation front, Nevada is also well set up to enter the recreational fray from the business side in a way that no other state except Oregon so far has been able to capitalize on. The state will also not go through the tortuous and ultimately self-defeating process seen in Washington State.
The way that Nevada is legalizing the whole industry, as well as shaping tax law to obtain maximum revenue from recreational use will undoubtedly be watched. It will also serve, particularly if successful, as a model for how other states will approach the issue of recreational reform. That means that Nevada could influence California’s legalization process. It could also mean eventually, that what was done in Nevada to capture the revenue from out of state canna tourists might become the model adopted by the country.