Las Vegas, Nevada, known to many as “The Entertainment Capital of the World”, is officially cashing in on legal cannabis. Although medical cannabis has been legal in Nevada since 2000, due to the vaguely worded language of the actual proposition that was passed, legal sales of medical cannabis were delayed until 2013, leaving medical cannabis patients “to grow their own [cannabis] – up to 12 plants per person – or find it some other way.” On November 8th, 2016, however, Nevada residents overwhelmingly voted to legalize the use of cannabis once and for all, making Nevada the 6th state in the U.S. to make recreational cannabis legal, in addition to the District of Columbia. Sales of recreational cannabis didn’t begin in Nevada until July 1st, 2017.
Nevada Cashes In
Since cannabis became legal for recreational use in Nevada, the amount of tax revenue that has been generated for the state has exceeded all expectations. Governor Sandoval had previously predicted possible tax revenue of $60 million dollars in the first two years. Now, the numbers are finally in, and in reality, the 2017-2018 tax revenue made by the State of Nevada on the combined sales of medical and recreational cannabis totaled nearly $70 million dollars.
Cannabis taxation can be broken down into two main parts: whole-sale tax, paid by cannabis whole-sale retailers and dispensaries up front, and retail tax, which falls on the consumer. According to a news release published in September of 2017, the State of Nevada Department of Taxation predicted that tax revenue resulting from just the 15% tax on whole-sale transactions involving medical and recreational cannabis was “projected to bring in $56.2 million dollars over the next two years,” while the 10% retail tax was “expected to generate $63.5 million” over the same period. Additional license and application fees were also expected to generate significant revenue for the state of Nevada. Indeed, over $5 million dollars for application and licensing fees alone was collected in only the first few months following recreational legalization in Nevada.
Not only have substantial amounts of tax revenue been generated by marijuana sales, but those funds which have been collected are being diverted for public programs that benefit every Nevada citizen. According to the legislation passed to legalize recreational cannabis in Nevada, revenue resulting from the sales of recreational and medical cannabis will be diverted to the state’s Distributive State Account, dedicated specifically for funding public education. Las Vegas City Councilwoman Lois Tarkanian, a proponent of legalization, has criticized the process of providing funds to public schools, arguing that she wants “to make sure it goes towards education…if it goes into the rainy day fund, it’s sometimes a dark cellar in there, and we don’t know where it goes.” According to Nevada Assemblywoman Dina Neal, nearly $64 million dollars in the states rainy day fund has been earmarked for public education. Nevada State Senator Tick Segerblom, nicknamed by some as Nevada’s “godfather of pot,” is demanding that Governor Sandoval call a special session to decide the issue once and for all.