One Year On, It’s Easy to Find Cannabis in Nevada–Maybe Too Easy

The state tax department has taken in almost $50 in revenue during the first nine months, and only one retail shop has been subject to disciplinary action.

The only bad news comes in the region of unlicensed sales. Police officials estimate the illicit cannabis market in Las Vegas has tripled since licensed retailers opened their doors last July 1.

Pop-Up Markets Thriving

Las Vegas Metropolitan Police Sgt. Randy Dockery said instead of selling illegally at popular cannabis festivals in Southern Nevada like the annual High Times Cannabis Cup or Las Vegas Hemp Fest, more unlicensed sellers are currently hosting “pop-up markets” in leased warehouses and banquet facilities. The marketplaces, which may feature up to 25 vendors selling everything from cannabis flower to potato chips, often occur on weekends, lasting just a couple hours before vendors count their earnings and head home.

Illicit vendors can “easily fool” a few of those 42 million annual tourists to Las Vegas, Dockery said. They present themselves as legal retailers, passing out business cards in popular visitor areas like the Las Vegas Strip and Fremont Street. And many such tourists are fooled, thinking marijuana is legal no matter where they buy it.

… buying it is not illegal, so long as it is less than an ounce.

Sgt. Randy Dockery

“Really, buying it isn’t illegal, as long as it’s less than an ounce,” Dockery said. “The folks selling the plant would be the ones committing the crime, and they’re well aware that what they’do is illegal. ”

He said anywhere from two to five such pop-up markets happen in a given weekend across the Las Vegas Valley.

Despite the challenges with the illicit market, Nevada officials and state permit holders say the industry has been successful.

The country recorded $304.7 million in sales for the first nine months of adult-use sales. Collections from a 15 percent state wholesale tax on marijuana shipments from cultivators and production facilities to dispensaries, as well as a 10 percent excise tax on recreational marijuana sales generated 97 percent of 12-month estimates through just nine months of sales, according to latest statistics available from the Nevada Department of Taxation. When closing tax tallies for the first year are released in September, state officials say the 12-month tax figures could exceed initial projections of just over $50 million by up to 45 percent. That would equate to almost $6 million raised in marijuana taxes per month, compared to roughly $4.2 million estimated last year from the economic office of Nevada Gov. Brian Sandoval.

Only one of those 61 open dispensaries in Nevada have been subject to discipline from the Nevada Department of Taxation, as well as two of the state’s 115 operating cultivators and four of its nine lab testing facilities. All of those facilities, which briefly had their state licenses suspended, are open for business.

The Source dispensary in Las Vegas competes with a robust black market. (AP Photo/John Locher, File)
A customer shops at The Source dispensary in Las Vegas, which competes with a robust black market. (AP Photo/John Locher, File)

A taxation department survey of dispensary owners statewide said about half of all marijuana sales are on flower. Concentrates constitute 25 percent of sales, while edibles accounts for just under 13 percent of products purchased by recreational buyers. Pre-rolls accounted for 10 percent, and the final three percent of sales came from medical products like suppositories and tinctures. As many as 8,500 jobs are created by Nevada’s legal cannabis industry between both recreational and medicinal marijuana, and more than $300 million has been invested by marijuana companies in Nevada real estate, according to numbers from the Nevada Dispensary Association.

NDA Executive Director Riana Durrett said for Nevada’s cannabis business to keep on advancing in the next 12 months, “stabilization” and supplanting the black market are its top two priorities.

“Nevada’s industry has escalated,” she said.

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