[dropcap class=”kp-dropcap”]N[/dropcap]evada’s cannabis industry has crossed the $100 million mark in taxes for the first time since first legalizing recreational cannabis in 2017.
For the 2019 fiscal year, dispensaries, cultivators, producers and laboratories have paid more than $109 million in taxes and fees. Tax contributions have increased 33 percent, from $74.7 million paid last year to $99.18 million this year, with an additional $10 million in fees paid on top of that. Entities in the cannabis industry are subject to four types of taxes or fees: a 10 percent excise tax, a 15 percent wholesale tax, sales tax and licensing fees.
“These sales and tax figures are a milestone that should be celebrated by the people of Nevada,” said Riana Durrett of the Nevada Dispensary Association said. “It shows that the public and visitors to Las Vegas from around the nation are becoming more comfortable purchasing cannabis and the industry is improving its ability to serve the public.”
During the 2018 fiscal year, Nevada collected almost $70 million in cannabis tax revenue, but just over $27 million was deposited in the Distributive School Account while the rest went into the state’s Rainy Day Fund. The tax revenue collected is supposed to go in the state’s education account, and changes in the law have been made to ensure all taxes from cannabis will go towards education in the future. In May, a bill was passed to fix the diversion by sending excise tax directly into the Distributive School Account, which is expected to add $120 million to the account over two years.
The Nevada Dispensary Association also issued a warning to the state that it shouldn’t take the high collections for granted because the illegal market is still alive in Nevada and that could cut into the industry’s benefit to the state’s education system.
“Significant changes in the market or regulatory framework could impact tax collection,” Durrett said. “The illegal market continues to deprive the state of funds that could be going to education.”