Business
Nevada And Alaska Marijuana Sales Far Exceed Projections
Among the four states to legalize recreational marijuana use and sales on Election Night 2016, a clear winner in the competition to cash in on tax revenue has emerged.
Voters in California, Maine, Massachusetts and Nevada approved cannabis legalization measures on the same night two Novembers ago.
Of these, Nevada was the first to record licensed and regulated retail sales in July 2017, a full six months before the first day of sales in California on January 1, 2018.
And since sales began, Nevada marijuana retailers have enjoyed a booming market—and with it, higher-than-expected tax revenue for the state, much of which is going directly to schools.
According to Nevada state marijuana regulators, taxable sales in the 12-month period from July 2017 to June 2018 are expected to exceed $500 million.
That’s 25 percent higher than official state revenue projections, which generally err on the side of caution.
And it absolutely destroys sales figures seen in Colorado and Washington during those two states’ first-in-the-nation early days of retail sales. In the first six months of 2014, Washington recorded $67 million, and Colorado $114 million.
The relative ease with which Nevada rolled out retail marijuana sales and their overwhelming success stands in stark contrast to the other states. In California, first-quarter sales fell well behind official state projections, in large part due to a highest-in-the-nation tax burden and cities and counties slow to adopt or outright to retail marijuana sales.
And in Massachusetts and Maine, a combination of local NIMBYism and government foot-dragging has meant that neither state has yet recorded a single sale.
“We are viewed by many others outside Nevada as essentially being the gold standard,” Nevada Taxation Department Director William Anderson told The Associated Press. “It’s an often-used term, but it’s appropriate here.”
At the same time, Nevada still has a long way to go before it catches Colorado’s current sales figures. In 2018, fueled by visitors from New Mexico, Texas and elsewhere, retail sales of marijuana in Colorado exceeded a staggering $1.5 billion, according to the Denver Post.
According to official first-quarter sales figures released by the state Department of Tax and Fee Administration, California raked in nearly $61 million.
That’s still on pace to miss Gov. Jerry Brown’s (D) prediction of $175 million in tax revenue from the first six months of the year. At the same time, more cities and counties—which must license retail dispensaries for them to operate—that were slow to allow for retail sales, such as Los Angeles, have come online.
In Alaska, which voted to legalize recreational marijuana sales in 2014, revenue from state marijuana taxes increased almost tenfold from year to year, with sales expected to continue to increase this year.
According to official figures released Wednesday, the Alaska Department of Revenue collected more than $11 million in taxes during the fiscal year that ended June 30—compared to $1.7 million the year before.
“I don’t believe the market has saturated and we haven’t seen exactly what capacity the state is going to operate in as far as cultivation and retail stores and the other facilities,” Kelly Mazzei, a tax official with the Department of Revenue, told NBC affiliate KTUU.
