A year has passed since recreational marijuana went on sale in Nevada.
Over the last 12 months, the state has tried to position itself as the leader in this budding industry.
“It’s been a long time, I’ve been waiting 48 years,” said Ricky Holt. He was the first customer to make a purchase when Essence Cannabis Dispensary opened on Las Vegas Boulevard July 1, 2017.
8 News Now was live at the stroke of midnight as recreational marijuana went on sale in the Silver State for the very first time.
There were fireworks and long lines to mark the occasion.
Reef Dispensary was one of 61 dispensaries licensed to sell recreational cannabis. On the sales side, it’s been a good year.
“It’s been absolutely amazing, totally exceeded our expectations,” said Mike Pizzo, Reef Dispensary.
Reef is vertically-integrated which means it grows and processes most of the marijuana and related products that it sells.
The company has four retail locations supplied out of a central warehouse.
Reef has 21 flowering rooms. Its largest room alone can produce about 570 pounds of marijuana flower a year. Business has been so good that the company’s 400 employees and 55,000 square feet of production and cultivation isn’t enough.
“We’re building out our second phase right now, which will put us at a full 165,000 square feet for this vertically-integrated facility,” Pizzo said.
The latest numbers from Nevada’s Department of Taxation are big. In the first 10 months of sales, dispensaries have sold nearly $341 million in recreational marijuana. Total tax revenue is at about $55 million. The state projected $50 million for the first year and there is still two months’ worth of taxes to count.
The state expects to deposit $25 million in the account that funds K-12 education, which comes from the wholesale marijuana tax, at the end of the fiscal year. Local governments have received $5 million from that tax. The 10 percent retail sales tax, introduced by Gov. Brian Sandoval, raised $34.06 million through April, with all of that going into the state’s Rainy Day Fund, as was initially proposed.
“The industry continues to grow, and we expect that to continue for many years,” said Andrew Jolley, owner, The Source Dispensary.
Dispensary owner and Nevada Dispensary Association President Andrew Jolley says with that growing success is a growing problem.
Marijuana is still illegal at the federal level so, for the most part, these cash-based businesses don’t have access to banking.
But there’s a bipartisan bill working its way through Congress called The STATES Act. It would, among other things, remove banking restrictions.
“If it passes, it could open up financing and lending and other things that typically aren’t available, at least in the traditional banking sense, for the marijuana industry, which is today, a $12 to $15 billion legal industry in the U.S.,” Jolly said.
Nevada Senator Catherine Cortez Masto, a Democrat, is a co-sponsor of the bill which President Trump has said he would sign into law if passed.
She says, the law would allow marijuana businesses to grow without fear of being shut down by federal agents.
“Because at the federal level, there was always this concern that the feds would come in and prosecute. So, this STATES Act actually prevents that,” Sen. Cortez Masto said.
With that solution in the works, Nevada is still wrestling with the issue of figuring out where visitors can legally consume marijuana. It’s something dispensary owners believe needs to be solved quickly.
“This is a hospitality state, you know, we don’t want to make people feel like they are doing anything wrong when they come here to purchase cannabis legally but have nowhere to use it,” Pizzo said.
Cities and counties are looking into the issue of pot lounges and state lawmakers could address them in the legislature next year.
Industry leaders and the state Department of Taxation are both predicting that sales will increase in the coming year.
State regulators expect to collect $70 million in pot taxes compared to the projected $50 million in the first year.