John Locher / AP
Published Tuesday, Aug. 28, 2018 | 12:06 p.m.
Updated Tuesday, Aug. 28, 2018 | 6 p.m.
Nevada’s first year of recreational marijuana sales vastly exceeded projections.
The state collected more than $69.8 million in marijuana tax revenue during the first full year of legal recreational sales, about 140 percent of what the state anticipated, according to numbers released today by the Nevada Department of Taxation. Officials last year projected for $50.3 million in tax revenue.
The revenue includes a 15 percent wholesale tax on medical and recreational marijuana, which totaled $27.3 million, and a 10 percent excise tax on recreational sales, which hit $42.5 million.
Total recreational marijuana sales for the period from July 1, 2017, to June 30, 2018, were just under $425 million. There are 64 medical dispensaries in Nevada, 61 of which are licensed to sell recreational pot.
“Nevada’s first year with a legal adult-use market has not only exceeded revenue expectations but proven to be a largely successful one from a regulatory standpoint,” said Bill Anderson, the taxation department’s executive director. “We have not experienced any major hiccups or compliance issues, and our enforcement staff has worked diligently to make sure these businesses understand and comply with the laws and regulations that govern them.”
The last four months of the fiscal year were the most lucrative, with each of those month’s collections exceeding $6.5 million. The $7.12 million total in marijuana tax revenue collected for June, which also was released today, was the highest monthly total of the fiscal year, topping the previous high of $7.11 million collected in May.
The taxation department also announced the transfer of $27.5 million to Nevada’s Distributive School Account, which will fund public schools. That comes from revenues from the wholesale tax, plus proceeds from application and licensing fees paid by state marijuana license holders.
Anderson said the department expected Nevada's legal marijuana industry to continue expanding in year two. Initial projections from Gov. Brian Sandoval’s office for July 2017 to July 2019 forecast marijuana sales bringing in an average of $5 million each month in tax revenue. But through the first year, Nevada is already averaging $5.82 million per month.
Combined with an 8 percent state sales tax and local taxes, recreational marijuana brought in over $100 million in tax dollars in its first year, said state Sen. Tick Segerblom.
Segerblom, a pro-pot lawmaker credited with spearheading legislation to bring legal marijuana to Nevada, said the industry’s continued growth will depend on finding legal outlets for the more than 42 million annual visitors to Las Vegas to consume marijuana. State law limits consumption to private residences, barring all public spaces including parks, schools and community centers. Gaming regulators and casino owners — in fear of risking their gaming licenses — have come out against the plant, banning it for use on resort property.
“The numbers are kind of leveling off, and we need to reach the tourist market a little more,” Segerblom said. “We need a venue where people can come and enjoy marijuana properly.”
Riana Durrett, executive director of the Nevada Dispensary Association, also expressed satisfaction with the numbers released today. The second-in-command of the state’s largest marijuana advocacy group added the industry is still “just getting started,” and that future tax revenues will depend on the legal industry’s ability to stave off an increasing market of illegal dealers undercutting dispensary prices.
“It’s a great source of revenue for the state,” Durrett said, “if it lasts.”