Nevada launched its legal adult-use cannabis market in July 2017 and total cannabis sales have reached $195,467,170 for the first six months. Moreover, the cannabis market has generated $30,376,795 in total tax revenue for the state.
It has been a little over six months since Nevada started the sales of recreational cannabis and, so far, the numbers are proving that the state made the right decision to completely legalize the drug. Both state government and the cannabis industry are beginning to reap the benefits.
For one, cannabis retailers in the state have sold over $195 million worth of legal marijuana products. This represents a sale of $1 million per day. The state has also made over $30 million in tax revenues.
A closer look at the figures
Nevada launched its legal adult-use cannabis market in July 2017 and total cannabis sales have reached $195,467,170 for the first six months, according to the Nevada Department of Taxation. With these sales figure, the pot market has generated $30,376,795 in total tax revenue for the state.
This half-year tax revenue figure means that the state is well within target of the $63.5-million cannabis tax revenue that local officials had estimated for the first two years of legalizing the sale of recreational pot.
The state charges a 15 per cent tax on wholesale cannabis and a tax of 10 per cent on retail sales. With this, wholesale cannabis taxes make up $10.8 million of the revenue total for the first half-year of operations. Meanwhile, retail cannabis taxes comprise $19.5 million for the same six-month period.
It can be recalled that cannabis taxes netted Nevada nearly $3.7 million in revenue for the first month of recreational pot sales, with monthly sales totaling $27.09 million.
In October 2017, Nevada’s total monthly tax revenue hit its peak at $5.84 million, with total sales reaching $38 million.
December came in second with total cannabis sales of nearly $36 million and a total tax revenue of $5.77 million.
To better illustrate the cannabis sales and tax figures for the first six months, here is a table:
Based on all the current figures and the performance of the state’s cannabis market so far, it is expected that Nevada will see total cannabis sales of more than $400 million in its first full year of operations.
Marijuana analytics firm New Frontier even projects that by 2020, the state’s legal weed market will be worth $622 million.
Why so successful?
Nevada’s cannabis sales in the first few months of legalizing the drug for adult use has surpassed Colorado’s own cannabis sales when it first entered the legal recreational cannabis market. Colorado legalized the sale of recreational cannabis in 2013.
Experts attribute Nevada’s success to the tourist-friendly city of Las Vegas. For instance, Las Vegas’ McCarran International Airport recently installed on its premises around 20 cannabis amnesty boxes, which allow tourists to safely dispose of their weed before boarding a flight out of the city. Local laws strictly prohibit cannabis on airport property.
Where does the cannabis tax money go?
The state is appropriating a good portion of the cannabis tax money towards education. More specifically, it will go into the state fund for public education called the Distributive School Account.
The money that the state earns from fees for cannabis licenses, applications, and medical cards will also go toward this public education fund.
Meanwhile, a portion of the revenue from cannabis will be set aside for the Department of Taxation so it could shoulder the costs of regulating the cannabis industry. Moreover, the government is allowed to tap $5 million of the annual cannabis tax revenue to offset the costs associated with regulation.
The flow of cannabis revenue has been outlined in the ballot initiative before it was passed in November 2016. It was also outlined in the cannabis tax bill.