Nevada saw huge lines on July 1st when dispensaries opened their doors to recreational cannabis users for the first time. The state sold $27.1 million in just the month of July – nearly doubling the sales of both Colorado and Oregon during their first months. The Nevada Department of Taxation reported that there has already been $10.2 million in tax revenue collected by the state.
Of that $10.2 million, over half ($6.5 million) came from industry fees – such as licensing fees for new facilities – and $3.68 million came from sales. Of the $3.68 million, there was $2.71 million that came from the 10 percent sales tax at the register. The additional $974,060 came from the 15 percent wholesale tax, which is paid by cultivators before the herb is delivered to dispensaries – this tax is paid in both the medicinal and recreational markets.
“That money was otherwise going to go to the black market. It’s not that everyone decided to start consuming marijuana because it’s legal, it’s just now that we can realize the tax revenue,” said Riana Durett, executive director of the Nevada Dispensary Association.
Originally, the Department of Taxation was estimating around $100 million in tax revenue over the first two years – however, this had not accounted for the sales in July. Now that those numbers are in, the department is anticipating around $120 million in tax revenue over the first couple of years of legal sales. This number could also increase again due to the costs of fees for licensing for new businesses.
“Although July was not accounted for in our projections, the first month’s revenues demonstrate that the state’s structure appears to be collecting at a rate consistent with the consensus forecast.” said Mari St. Martin, spokeswoman for Gov. Brian Sandoval.
The application fee for all recreational marijuana licenses is $5,000 – but the actual licensing fees can be anywhere between $10,000 – $30,000. These licensing fees are expected to bring in a good portion of the revenue the state receives from the industry over this first couple of years.
The tax revenue from cannabis sales will be going into the state’s rainy day fund, which is used mostly for emergencies. A portion will also go into the School Distributive Account, which gives funds to schools per student.
Source: The Marijuana Times