The state budget of Nevada required that it generate $100 million in tax revenue from marijuana sales over the next two years. The budget was set in place and all of Nevada’s plans were relying on those funds being available. When the transportation issues occurred over a judge granting alcohol distributors exclusive rights to transport marijuana when they were not yet licensed, Nevada officials became very nervous and declared the state-of-emergency.
The tax revenue being generated from marijuana sales in other states like Colorado, has been astonishing so far. Nevada should have very high expectations of the amount of revenue it will generate based off of the amount of sales since the July 1st start. What should Nevada do with all of these additional funds it will be receiving from recreational marijuana sales to improve the lives of people in Nevada?
Typically, putting the name of a state and the phrase “state of emergency” in the same sentence means residents there are facing some serious trouble. Like “natural disaster” type of trouble.
Leave it to Nevada to put a new twist on things. State officials there declared an emergency this month because people couldn’t get enough of what they wanted. What did they want? Recreational marijuana. And the state’s dispensaries, in a continuation of some last-minute legal maneuvering that led to a bumpy roll out of the Silver State’s regulated recreational marijuana sales, couldn’t provide enough supply to meet demand.
But Nevada officials took action to fix the supply problem only after realizing that the state would miss out on a chunk of the $100 million in marijuana tax revenue expected over the next two years.
As detailed here, the state had to allow existing medical marijuana dispensaries to sell adult-use marijuana while sorting out a legal case brought by the state’s alcohol distributors. By law, they were supposed to have exclusive rights to distribute adult-use marijuana for the first 18 months it was available.
With no transportation system set up, supplies quickly started running out.
The state finally took action at a mid-July meeting of the Nevada Tax Commission, which decided to temporarily expand who is allowed to transport marijuana until the alcohol distributors are up and running.
The main reason? The state has budgeted $100 million in marijuana tax revenue for the next two years. “Without the retail sale of marijuana, the state will not realize the revenue upon which the state budget relies,” Deonne Contine, executive director of the Tax Commission, wrote in a letter to commissioners.
Contine also said action was needed to keep buyers from moving into the black market to purchase marijuana if the supply of legal marijuana evaporated.
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