Lawmakers in Nevada are taking drastic measures to ensure that Silver state’s supply of legal pot doesn’t go up in smoke.
While a boom in sales of marijuana during the first two weeks of legalization may seem like high times for dope distributors, there is concern that the demand may soon cause shortages at dispensaries.
In an effort to prevent any shortages, the Nevada Tax Commission voted 7-0 Thursday on new rules aimed at allowing medical marijuana dispensaries to apply for distribution licenses for recreational marijuana.
The new ruling gives the commission the authority to determine there is a distribution shortage.
Since recreational sales began on July 1, dispensaries stocked up on recreational marijuana but became increasingly in short supply.
Gov. Brian Sandoval signed emergency regulations that kept sales going until the tax commission vote was held. The Nevada Department of Taxation was worried that the new industry would essentially come to a halt if these new rules were not passed.
“When businesses operate we get the tax revenue and that’s what the state wants. So far there are only two recreational weed distributors statewide that are licensed,” said Deonne Contine, the director of Nevada Department of Taxation said during Thursday’s hearing.
Brandon Wiegand, Director of Operations at the Source Dispensary, says the ruling “gives them a path whereas before we were stuck in neutral.” He adds, “a state of emergency was called because tax revenue was at risk that the state needs and is relying on and it puts the public at risk. We’ve legalized sales, we've given them the mechanism to purchase legally, but now that mechanism is going away, that could mean business could go back to the black market.”
Roughly $5 million worth of recreational pot was sold during the first week of sales, according to Riana Durrette, executive director for the Nevada Dispensary Association. Those initial totals are expected to net the state about $1 million in taxes. Expectations are that they will level off, but Durrette is confident that Governor Sandoval’s $35 million tax revenue projection at year’s end will hold up.
Critics of the legalization rollout cited these exact regulations concerns before the July 1st deadline. Questions swirled over why state officials would only spend six months on implementation and not a full year.
“Before the passage of this initiative, the Department of Taxation had had no background, no experience at all with marijuana administration. We are alone in this very shortened process,” said James Hartman is President of Nevadans for Responsible Drug Policy.