The Nevada adult-use cannabis market has only existed for half a year, but sales have already exceeded $195 million, netting the state over $30 million in tax revenue.
[dropcap]T[/dropcap]here’s no uncertainty when it comes to the numbers: Nevada’s adult use legalization has meant a quick infusion of revenue for the state — over $30 million in the first six months of legal sales.
The revenue was raised through a 15 percent wholesale and 10 percent retail tax on cannabis, more specifically, the upwards of $195 million in legal cannabis sold in the state so far.
These figures already greatly surpass the early sales numbers for Colorado, which most observers attribute to the much higher concentration of tourists in Nevada, particularly Las Vegas. It’s also the culture of the The Las Vegas strip — the undisputed main draw for tourism. The Strip is a global mecca for hedonistic excess; a place where people go do things they normally wouldn’t (or legally couldn’t) do back home, which makes it a uniquely ideal place to offer cannabis tourism opportunities.
As would be expected this early in an undertaking as drastic as dialing in a legal and commercial framework for a previously prohibited (and still federally illegal) marketplace, there are still certain uncertainties and conflicts being ironed out; from legal battles with liquor distributors over cannabis distribution rights, to political and cultural resistance to sales and consumption lounges in Clark County — the actual home to most of the section of South Las Vegas Blvd known as The Strip — that keeps cannabis (officially) out of most hotels and casinos.
But despite all that, Nevada is seeing real positive fiscal impacts from legal cannabis, and as with most states that have legal states, a portion of that money is going towards education — from the 15 percent wholesale tax on all adult use and medicinal cannabis.
However, some people advise against embracing decriminalization for economic purposes, among them, Andrew Freedman, Colorado’s first marijuana czar and currently half of the cannabis consulting firm Freedman & Koski.
In an interview with Forbes, Freedman expressed his belief that “people truly overestimate what you can do with marijuana money.”
“At the end of the day, the debate shouldn’t be about tax revenue. ‘Should we lock up fewer people for marijuana?’ vs. ‘Is this going to create more of a burden on public safety?’—that’s where the debate should be.”
With all due deference to Freedman’s professional experience and expertise, this viewpoint downplays the often transformative local potential of cannabis revenue and validates lingering social stigmas about cannabis that spuriously connect its sale and use to crime.
It’s true that on a statewide scale cannabis revenue hardly represents a windfall: In California — the largest legal (and illegal) cannabis market in North America — adult-use sales are projected to surpass $5 billion, meaning revenues in excess of $1 billion. It’s certainly a lot of money, but more or less a drop in the bucket for a state carrying over $1 trillion in state and local debt.
And while it’s true that cannabis revenue isn’t enough on its own to fix the underfunding of education in any state, Colorado saw $300 million in revenue go to dilapidated schools, some of which were completely razed and resurrected by retail revenue, as was the case in Deer Trail, Colorado.
From The Denver Post:
Deer Trail passed a $6.8 million bond issue in November to raise its matching funds. The vote passed by a 16-percent margin… Others that received BEST awards include the Brush School District, which got more than $60 million for a new middle school and to renovate its high school, and Del Norte, which received $45 million for a new preK-12 school.
And while Freedman alluded to the issue of incarceration, he glossed over the huge negative financial impact of keeping cannabis “criminals” in prison. Prisons are a drain on the economy, not just because of the cost of building and running them, but because of the lost economic power of those serving time.
So while cannabis decriminalization isn’t a silver bullet for rejuvenating flagging civic budgets, it creates a real stream of revenue, as well as jobs and business for peripheral businesses.
There may be some argument about the best reasons why legalization should happen nationwide, but there is no question that it should.
TELL US, where do you think cannabis revenue should be spent?