Home Business Cannabis Tax Revenues Blow Past Projections in Nevada

Cannabis Tax Revenues Blow Past Projections in Nevada

Nevada launched adult-use cannabis sales on July 1, 2017. Since that time the taxes generated from sales and wholesale taxes have exceeded initial projections every single month.

Voters in Nevada approved cannabis legalization during the 2016 election by a wide margin (54.47% to 45.53% ).

The state has a population of roughly 3 million people, making Nevada the 33rd most populous state.

But with a large tourist population, Nevada’s cannabis industry is sizeable with so many travelers fueling the state’s adult-use sales.

How much tax revenue has Nevada generated from cannabis this fiscal year?

Tax numbers in Nevada are available from July 2017 through April 2018. Below are some of the highlights:

  • Cannabis tax revenues through April 2018 are $55.53 million
  • Tax revenues are already 10% over initial projections for the year, with 2 months still left in the fiscal year
  • Cannabis taxes account for roughly 17% of Nevada’s fiscal year tax growth
  • March 2018 was the biggest month for tax revenues
  • July 2017 was the smallest month for tax revenues

Initially, Nevada was projected to bring in $50.32 million in the first fiscal year of adult-use cannabis sales.

Numbers for May and June 2018 will not be available for a couple more months, but I think it’s safe to say that they will be just as robust or better than previous months.

What do Nevada cannabis taxes go to?

Nevada has two types of cannabis taxes. The first is the ‘Wholesale Marijuana Tax’ which is 15%. The fund also includes any fees, penalties, and/or assessments.

Revenues from the Wholesale Marijuana Tax fund first go to the state to help administer the program that regulates the cannabis industry.

After the costs of the program are covered, the next $5 million goes to local governments. The remainder goes towards helping fund Nevada schools.

The second tax fund is the ‘Retail Marijuana Tax” which is 10%. The revenues from that fund go towards the state’s Rainy Day Fund.

Why isn’t every state doing this?

As of this blog post, there are six states that currently have adult-use sales occurring – Colorado, Washington State, Oregon, Alaska, Nevada, and California.

Three more states have legalized cannabis for adult use. Those states are Massachusetts, Maine, and Vermont.

Vermont’s legalization model does not include a regulated cannabis industry. Sales will begin very soon in Massachusetts, and eventually in Maine.

A regulated cannabis industry creates jobs, provides economic boosts to local economies, and helps focus law enforcement resources on real crime, in addition to raising taxes.

Why isn’t every state allowing adult-use sales? When people consider all of the benefits of a regulated cannabis industry, it’s a no-brainer.

The Green Flower team is hopeful that legal sales will be allowed in every state sooner rather than later.

All states should experience the success that Nevada (and 4 other states) is currently experiencing!

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