Nevada cannabis industry sees $965M in annual sales, transmits $147 million to education
Submitted by admin on Wed, 10/05/2022 - 1:31pm
Despite a slight year-to-year dip, Nevada’s legal cannabis industry still reported nearly $1 billion in taxable sales over the last fiscal year, with a sizable chunk transferred to the state’s education budget.
This fiscal year’s $965 million in taxable funds is about a 4 percent decrease from the previous fiscal year which generated over $1 billion in taxable funds to the state, according to a press release issued Friday by the Cannabis Compliance Board, which regulates the legal marijuana industry in the state. The fiscal year ran from July 1, 2021, to June 30, 2022.
In part because marijuana sales skyrocketed during the pandemic, many experts correlated the drop in marijuana sales to COVID restrictions being lifted as well as other economic factors.
“Over the first part of the year, Nevada’s cannabis industry saw lower retail sales, a trend consistent with other mature cannabis marketplaces nationwide. While sales increased during the COVID-19 pandemic, cannabis businesses are not immune to the effects of inflation and lack of disposable income as consumers adjust their spending habits and priorities,” said Tiana Bohner, a spokesperson for the Nevada Cannabis Compliance Board, in an email to The Nevada Independent.
The $147 million headed to the state’s K-12 education budget comes from the 10 percent retail adult-use excise tax (which brought in $89 million) and a portion of the 15 percent wholesale tax for adult and medical use (which brought in $63 million). Besides education, the wholesale tax proceeds go to two additional funding pots, Bohner said. Local governments receive $5 million and the remainder goes to regulatory operations, such as the Cannabis Compliance Board.
The marijuana tax funds are among the revenue streams that feed the state education account and, ultimately, are redistributed to school districts through the Pupil-Centered Funding Plan. The PCFP, passed by the Legislature in 2019, modernizes the state’s 54-year-old funding formula, though whether its desired effects are happening won’t be known for a few more years.
The decrease in revenue, coupled with inflation and the increased taxes on the industry has left businesses and cannabis activists frustrated with a system they say already doesn’t work in their favor. Earlier this year, several cannabis businesses spoke out against what they perceived to be excessive fees for standard regulatory tasks and wholesale taxation formulas that don’t keep up with price changes.
Judah Zakalik, a chairman for cannabis company Congerium LLC, said in a phone interview with The Nevada Independent in July that the taxes give the black market a leg up over those running legal cannabis companies.
“I think if taxes are too high, that will just lead to prices going up which is going to lead to the black market thriving more,” Zakalik said. “That's tough because that's a competitor that we have as legitimate business people that is very difficult to compete with.”
— This story was used with permission of The Nevada Independent. Go here for updates to this and other Nevada Independent stories.
