The cannabis industry in Nevada is nearly $1 billion in annual sales

The cannabis industry in Nevada had taxable sales of more than $965 million in fiscal 2022, down slightly from sales of $1 billion a year earlier. The regulated sale of marijuana has generated nearly $150 million in cannabis tax revenue and provided important funding for the state’s public school system.

The Nevada Cannabis Compliance Board last week released sales figures for the state’s regulated marijuana industry, which reported just over $965 million in taxable wholesale and retail sales for fiscal year 2022, which ran from July 1, 2021 to June 30, 2022. The number reflects a 4% decline in sales from a year earlier, when taxable cannabis sales surpassed $1 billion.

Tiana Bohner, a spokeswoman for the Nevada Cannabis Compliance Board, said national and global economic factors played a role in the year-over-year decline in cannabis sales. In 2020, cannabis sales in legal markets across the country skyrocketed as the coronavirus lockdown took hold. In many states, the jump in sales was fueled in part by the designation of cannabis retailers and producers as essential businesses, allowing them to remain open while many others were forced to close their doors.

“In the first half of the year, the Nevada cannabis industry saw lower retail sales, a trend consistent with other mature cannabis marketplaces across the country. While sales rose during the COVID-19 pandemic, cannabis companies are not immune to the effects of inflation and a lack of disposable income as consumers adjust their spending habits and priorities,” Bohner wrote in an email to The Nevada Independent .

The drop in sales followed the easing of restrictions imposed due to the COVID-19 pandemic, when consumers were desperate to return to family gatherings, restaurants and other public activities. During the shutdowns, cannabis sales in legal markets skyrocketed, with most states reporting record-breaking sales. In March, however, cannabis market data analytics firm BDSA reported that sales appeared to be returning to pre-pandemic levels.

“Although most legal cannabis markets saw sales decline in the second half of 2021, the global cannabis market is expected to experience lively growth in 2022, driven by strong sales in new and emerging markets in the US, steady growth in Canada and the… international markets is led by Mexico and Germany,” said Jessica Lukas, BDSA’s chief commercial officer, in a statement quoted by Newsweek.

Nevada Cannabis Taxes Fund Education

Revenue from taxable cannabis sales in Nevada totaled approximately $152 million for fiscal year 2022, including $89 million from the 10 percent consumption tax on retail sales for adult use and an additional $63 million from the 15th -percent tax on wholesale recreational and medical marijuana. The collected tax revenue, less administrative costs incurred by the state, will go to Nevada’s K-12 education budget, which totals $147 million for fiscal 2022 for public schools.

However, cannabis companies say state taxes and regulatory fees are overwhelming, especially when combined with the drop in sales and other economic factors, including inflation. Operators have been particularly critical of the Cannabis Compliance Board’s time and labor costs, which charge licensees $111 an hour for regulatory tasks performed by the board’s staff, including mandatory inspections, audits and correspondence. Although some fees have recently been revoked, Will Adler of the Sierra Cannabis Coalition said the system could be counterproductive even if the revenue from time and effort is spent on education.

“The idea of ​​extra fines or extra fees adds extra good to the stack for education — I think that’s misguided,” he said. “At this point, the additional fines and fees could be trying to kill this golden goose that is the cannabis industry.”

Judah Zakalik, chairman of cannabis company Congerium LLC, said in a July telephone interview with The Nevada Independent that high taxes give the illegal marijuana market an advantage over the regulated cannabis industry.

“I think if the taxes are too high, it will only lead to rising prices, which will make the black market thrive more,” Zakalik said. “That’s difficult because that’s a competitor that we have as legitimate business people that’s very difficult to compete with.”