Nevada is celebrating its one-year anniversary of legal recreational marijuana sales and the numbers are very positive for the industry and the state.
Marijuana tax revenues through April total $55.53 million, 110 percent of what was projected for all of fiscal year 2018. The chart below shows actual marijuana sales versus plan for the year on a percentage basis.
Nevada Marijuana Sales: Actual vs. Plan
Total combined taxable sales for medical marijuana, adult-use marijuana, and marijuana-related tangible goods for the first ten months of the fiscal year in Nevada totalled $433 million.
Nevada’s Marijuana Taxes Aren’t Egregious like California
Nevada levies a wholesale tax of 15% and an additional 10% tax at the retail level.
California in stark contrast has suffocated the market with an array of taxes that include state level tax of 15% and $9.25 per ounce cultivation tax, local taxes as high as 20%, and an additional 10.25% retail tax.
California is a textbook case study of the negative economic consequences of over regulation and over taxation. The California Cannabis Manufacturers Association estimates the black market outnumbers the legal market five to one.
The high taxes have translated to high legal prices and low sales volume, leading consumers to significantly lower priced product in the black market.
Vegas Tourism a Key Driver of Success
The robust level of sales in Nevada are driven by the over 42 million tourists that visit Las Vegas every year. The state is keenly aware of the value of the tourist pot dollar going as far as installing ‘amnesty boxes’ at airports that allow tourists to deposit unused marijuana before boarding flights.
City officials in Las Vegas are seriously considering allowing marijuana lounges to operate. If successful it would be the second city to do so in the US (Denver is currently the only city that allows marijuana lounges).
Las Vegas clearly understands the value of remaining consumer focused to allow the industry to thrive and ensure consumption happens at the legal taxable level as opposed to pushing consumers to the black market.