Nevada's Recreational Marijuana Market Soars Past Colorado
Nevada’s recreational marijuana industry hit a new high, selling more than $37.9 million in October. The state has earned nearly $20 million in marijuana tax revenue since the adult-use market launched in July.
“We are pretty on target with projections, maybe a little over,” Department of Taxation spokeswoman Stephanie Klapstein told the Las Vegas Review-Journal.
Nevada voters approved a recreational legalization measure last November, along with California, Maine, and Massachusetts. But unlike the other states, Nevada launched its adult-use market in July. Regulators in California and Massachusetts are still working out details for their respective markets, while regulated sales in Maine will probably be delayed thanks to political wrangling.
Launching early is not the only way Nevada has been outperforming other states when it comes to cannabis.
Four months into Colorado’s recreational market, dispensaries in the state saw $22.56 million in sales — a fraction of Nevada’s sales four months into its recreational marijuana program.
Meanwhile, dispensary owners in Nevada don’t seem to be worried about California’s imminent adult-use market. California regulators have issued temporary licenses to some cannabis businesses that will be allowed to sell to adults over 21 on January 1. But two of the state’s largest markets — Los Angeles and San Francisco — won’t have adult-use sales when recreational marijuana launches.
Dispensary owners in Nevada are hoping that regulated sales in California will help tamp down on black market marijuana that flows over the border to compete with the regulated market.
Nevada’s adult-use marijuana market is driven by the tourist-friendly Las Vegas. Cannabis analytics firm New Frontier projects the state’s cannabis market to be worth $622 million by 2020.
The next hurdle for the Silver State is setting up designated consumption areas. No cannabis-legal state allows for social-use (though Denver has a restrictive pilot program). Consuming cannabis in public is not permitted, even though many businesses in Las Vegas allow tobacco smoking indoors. The ban is a pain point for the city’s many tourists, who have nowhere to legally light up.
“We have 40 million tourists in Las Vegas; we’re around the world right now saying, ‘Come to Las Vegas, because you can buy recreational marijuana, or cannabis,” state Senator Tick Segerblom said at a cannabis law conference in July. “But you have to also say, ‘There is literally no place that you can use this as a tourist.’ You can’t use it in your hotel room. You can’t use it on the Strip. You can’t use it at a restaurant. You can’t use it at a concert. But they do.”
Clark County commissioners have not been so keen to introduce marijuana lounges. “I don’t see any reason why we have to be first,” one county commissioner said during a discussion on the issue. Other commissioners agreed with the sentiment, worried that such a move would invite scrutiny from the Department of Justice.
Even without allowing social-use, it looks like the state’s recreational marijuana market will keep up its impressive growth.