Nevada nets $3.7 million in 1st month of marijuana tax collections

By Colin A. Young

The Silver State is seeing green, having hauled in $3.68 million in state tax revenue during the first month of legal marijuana sales.

The bulk of the revenue was generated by Nevada's 10 percent retail tax on sales of recreational marijuana, totaling $2.71 million in July, the Nevada Department of Taxation reported. Another $974,060 came from a 15 percent wholesale tax charged to all cannabis cultivators.
Wholesale tax revenue goes to Nevada schools and is expected to bring in $56.2 million over the next two years.

Revenue from the 10 percent retail tax will go to the state's rainy day fund and is expected to produce $63.5 million over the next two years. Marijuana became legal in Nevada on Jan. 1 and retail sales began July 1, making the state the fifth in the country to provide legal retail access to marijuana.

Massachusetts consumers will pay a state excise tax of 10.75 percent, the 6.25 percent sales tax, and a local option tax of up to 3 percent on retail sales.

Based on estimates compiled by the Department of Revenue – using a range in taxable sales between $771 million and $1.433 billion – a 20 percent effective tax rate on marijuana could produce between $72 million and $134 million annually, or between $6 million and $11 million a month in Massachusetts.

Although Nevada's population is less than half of that of Massachusetts, 203 of the 250 marijuana licenses issued in Nevada are in Clark County, which includes the major tourist destination Las Vegas, according to that state's Department of Taxation. So far, Nevada has licensed 53 retail stores, 92 cultivation facilities, 65 product manufacturing facilities, 31 distributors, and nine testing labs.

After largely avoiding marijuana policy proposals for years, the state Legislature this year rewrote the voter-approved law legalizing adult use of marijuana. The redrafted law boosted tax rates and state and local officials are now eyeing pot tax revenues as they compile future spending proposals.

Bay State voters approved marijuana legalization last November. Retail sales in Massachusetts are expected to begin in July 2018.


Legislators delay retail marijuana sales

By Matt Murphy and Andy Metzger

STATE HOUSE, BOSTON, DEC. 28, 2016.....The process for licensing retail marijuana shops would be delayed by six months under legislation that surfaced first on Wednesday in the Senate before clearing both branches, the result of which could push the legal sale of marijuana, authorized by a successful ballot campaign this year, well into 2018.

The House and Senate on Wednesday morning during lightly attended informal sessions passed a bill (S 2524) amended by Sen. Jason Lewis pushing out the effective dates of several key milestones in the new law, including the dates by which the state will begin accepting applications and issuing licenses for retail pot shop licenses. The state, under the bill, would have until July 2018 to issue the first licenses for retail pot sales.

The move highlights a rare willingness among lawmakers to tinker with a law approved directly by voters.

The bill also directs the Baker administration to contract for a study of marijuana use, including patterns of use and methods of consumption, incidents of impaired driving and marijuana-related hospitalizations and the economic impacts on the state.

Senate President Stanley Rosenberg, who presided over Wednesday's session, said the bill would not impact any provisions of the new law that went into effect on Dec. 15, including the legalization of possession, use, gifting and home-growing of marijuana. House and Senate officials said the delay would give the Legislature more time to "improve the ballot question, take up issues not addressed by the ballot question and allow the state more time to implement the will of the voters."

"The Legislature has a responsibility to implement the will of the voters while also protecting public health and public safety. This short delay will allow the necessary time for the Legislature to work with stakeholders on improving the new law," Rosenberg said in a statement. "Luckily, we are in a position where we can learn from the experiences of other states to implement the most responsible recreational marijuana law in the country."

The bill must still be signed by Gov. Charlie Baker before becoming law. The legislation would give the forthcoming Cannabis Control Commission an extra six months – until March 15, 2018 – to develop initial regulations, and applications for testing facility licenses and for retail sales from established medical marijuana dispensaries would be delayed until April 1, 2018.

Treasurer Deborah Goldberg would also have until September, instead of March, to set up the new Cannabis Control Commission.

"Our goal has always been to make sure that the intent of the voters is carried out," House Speaker Robert DeLeo said in a statement. "The delay will allow the committee process to work through the law's complicated implications and provide a process by which we can strengthen, refine, and improve it."

Will Luzier, who was part of the coalition that passed the marijuana ballot law, said he was "disappointed" that lawmakers are pushing back retail sales of marijuana.

"If they need that much time to tweak the process, we're disappointed that they have to take that much time but we understand that that's the way it is," Luzier told the News Service.

Luzier said he believes the delay will likely be a hardship for those in the burgeoning marijuana industry.

WATCH: Luzier on Retail Delay

"Sitting on an investment for that much longer is probably a problem," Luzier said.

Luzier was also disappointed with the process of passing the change through the Legislature, saying he only saw the new language Wednesday morning.

"We only had about two hours to review it. We only got it at nine o'clock this morning," Luzier said. He said, "We're disappointed that it went through in an informal session and we would have liked to have had more to review it, but the process is the process."

Asked if he was attempting to convince a pro-marijuana lawmaker to object to the bill before it is enacted, Luzier said he has been in contact with "our allies" and said, "We haven't gotten a commitment from anyone yet."

Rosenberg and DeLeo said that in the coming weeks they will also set up a Committee on Marijuana comprised of Democrats and Republicans from both branches to work with stakeholders and draft additional legislation to address concerns with the new law.

Legislative leaders say pot legalization won't be delayed

House Speaker Robert DeLeo and Senate President Stanley Rosenberg on Monday ruled out pushing a last-minute delay in the legalization of marijuana set to take effect on Thursday, but did not take other procedural delays off the table as the state moves toward setting up a new industry.

"The voters spoke in favor of legalized recreational marijuana on Nov. 8th and we fully intend to respect the will of the voters. While we analyze the provisions of the new law and its implementation, we will not be passing legislation that changes the Dec. 15th effective date for possession, use, and home growing," the two Democratic leaders said in a joint statement Monday afternoon.

The Governor's Council is poised on Wednesday to certify election results that show more than 1.7 million voters, or about 54 percent, approved the legalization of the adult use of marijuana that will eventually lead to the licensing of marijuana retail stores around the state. The certification will clear the way for the possession of marijuana and the growing of plants in someone's home to become legal on Thursday.

Both DeLeo and Rosenberg previously said they were considering delaying parts of the new law before the the end of the month. "If it's going to be a delay, it's going to be a very time-limited delay," Rosenberg said last Monday after meeting with DeLeo and Gov. Charlie Baker.

DeLeo said pushing back the Dec. 15 legalization date could be "a little more difficult," but the leaders are still looking at legislation to refine the ballot law that could lead to a higher tax rate on marijuana and delays in other key deadlines, including the March establishment of a Cannabis Control Commission or the fall 2017 timetable to begin accepting applications for marijuana retail shops. –Matt Murphy/State House News Service