After long wait, banner first week for recreational marijuana in Nevada
By Jackie Valley and Michelle Rindels
As the sun beat down on customers waiting to purchase recreational marijuana Saturday, swamp coolers and fans provided some relief outside a suburban Las Vegas dispensary.
Meanwhile, employees passed out water bottles to the eager people standing in line, braving the 100-degree heat to legally buy marijuana or cannabis-laced products.
“I kept going up to people when we first opened and saying, ‘So sorry we’ve had a long line,’” said Andrew Jolley, CEO of The Source dispensary. “And over and over, people kept telling me, ‘I’ve been waiting years for this.’”
The festive crowds on the first day Nevada stores sold recreational marijuana underscored the pent-up demand for legal pot in the state, which has only had dispensaries for two years and even then only opened them to people who went through the cumbersome process of getting a medical marijuana card. Riana Durrett of the Nevada Dispensary Association estimated that the 47 retail marijuana stores that snagged a state license in time for the “early start” period — six months before the state was legally required to allow sales — raked in between $3 million to $5 million during launch weekend.
“By all accounts, it went really well,” Durrett said. “Some places had hundreds of people in line, but everyone was really well-prepared.”
The success wasn’t merely related to sales. Metro Police reported no disturbances at the dispensaries through the busy Fourth of July weekend, although the department does not track crime statistics related to marijuana specifically, according to spokesman Larry Hadfield.
It remains to be seen whether impaired-driving offenses increase as a result of legalized marijuana sales. That’s something that recreational marijuana opponents have warned could happen in the state.
“Nevada will face the same increases in drugged-driving fatalities and emergency room visits as other legalized states,” warned Kevin Sabet, president of the anti-legalization group Smart Approaches to Marijuana, who pointed to traffic crash data from Washington and Colorado. “We are working with employers and health care professionals in the state to minimize the damage to public health from these misguided laws.”
Still, pot proponents are declaring a first-week victory.
“I would say for taking a new industry, going from where it was basically to 10 times what it was, it’s incredible how low the problems were,” said Democratic Sen. Tick Segerblom, who’s spearheaded much of the legislation that shaped the industry. “The sky didn’t fall, there were no big car wrecks, there were no kids on the street at schools buying it. All the disaster stories that you can imagine, none of that happened.”
‘AMBITIOUS’ TAX REVENUE PROJECTIONS
While the dispensary association has offered its own estimate of how big of a splash recreational marijuana has made, it won’t be truly clear how much revenue is rolling in until the fall.
That’s when the Nevada Department of Taxation plans to report on its pot tax collections. All marijuana sales are subject to a 15 percent tax at the wholesale level and a sales tax that ranges from 6.85 percent in some rural areas to 8.265 percent in Washoe County. Recreational marijuana faces an additional 10 percent excise tax at retail stores.
Proceeds from the wholesale tax are designated for public education, while the projected $64 million expected from the excise tax over the next two years is devoted to the state’s “rainy day” fund. While the excise tax was initially supposed to support schools, lawmakers redirected it to the reserves, where it’s not specifically tied to education and won’t put schools into a direct bind if it comes up short.
Segerblom pointed out that dispensaries would have to sell about $800,000 in marijuana each day for the next two years in order to churn out the projected excise tax revenue. He called it a high, but reachable, bar.
“That’s a pretty ambitious amount. I think we’ll get there, but probably over the first six months, we’ll be behind that schedule,” he said. “Once tourism actually becomes a factor and people start coming here for it, it’s going to be off the charts.”
The state can’t count on recreational marijuana tax revenue from all corners of the state. Some jurisdictions — including Henderson and Carson City — have a moratorium on such sales at least for the next few weeks and are only allowing medical marijuana sales.
BUYING TRENDS
Some Nevada dispensaries served more than 1,000 people per day over the kickoff weekend, but those numbers have gradually tapered, Durrett said. The industry expects a steady stream of 200 to 400 recreational marijuana customers per day at each dispensary.
The customer traffic so far has consisted of a “healthy mix” of locals and tourists, she said. The Nevada Dispensary Association instructed its members to remind buyers, who must be 21 years old, the rules: They can’t consume it in public or a moving vehicle, nor can they possess more than one ounce of marijuana or one-eighth ounce of concentrated marijuana.
The rules pose a conundrum for tourists — a significant customer base that, as it stands now, doesn’t really have a legal place to consume marijuana. That’s why Jolley, who serves as president of the Nevada Dispensary Association, said he hopes the state finds a solution, such as marijuana lounges or bars.
“I think it’s important for us to provide a safe, regulated place for these folks to use,” he said.
A bill that would have authorized local governments to create ordinances allowing for public consumption faced opposition from Republican Gov. Brian Sandoval and died before getting a final vote in the legislative session. Segerblom has sought an official state legal opinion on whether the law grants local governments that authority even though the bill failed.
Amanda Arentsen of the Las Vegas Convention and Visitors Authority said that with the rules against public consumption, marijuana use isn’t something they can tout to tourists at this point. The agency didn’t have statistics on how many people might have come to Nevada from out of state to partake.
An uptick in the sale of edibles or vape pens might be tied to the public consumption problem, as tourists try to skirt the issue by consuming in a more discreet way, said John Laub, president of the Las Vegas Medical Marijuana Association.
“I think people know to be careful,” he said.
Even so, larger-than-expected numbers of customers bought raw marijuana, Durrett said, indicating regular consumers are transitioning away from the black market.
Opening week also brought out first-time users, people who hadn’t consumed marijuana in decades or those who never obtained a medical marijuana card but wanted to try it to ease aches and pains, reduce anxiety or improve their sleep, Jolley said.
“There’s no one stereotype anymore,” he said, referring to the demographics of marijuana consumers. “Look around the grocery store, the library and the DMV, and that’s who our customer is.”
Marijuana industry officials hope the convenience of buying legally from dispensaries continues to lure people away from street sales, where consumers subject themselves to riskier situations and unknown ingredients.
One-eighth of an ounce of marijuana retails for roughly $30 on the black market, while the same amount costs, on average, $35 at dispensaries, Durrett said.
WHAT’S NEXT
Now that retail sales have begun, Jolley said it’s time for the state and industry to formulate a public awareness campaign that highlights the rules and best practices. He pointed to Colorado’s “Good to Know” campaign, which covers everything from consumption methods to safety information, as an example.
“I see that being an important step in the evolution of the marijuana industry in Nevada,” he said. “I’m looking forward to having that rolled out here.”
If demand projections hold steady, Jolley said he expects many dispensaries to beef up staffing or expand their operations. He’s already considering doubling the size of his staff at The Source dispensary near Rainbow Boulevard and Sahara Avenue.
“We’re stretched pretty thin right now, so we’re going to have to play catch up,” he said.
Feature photo: People line up to purchases recreational marijuana at Acres Cannabis on Saturday, July 1, 2017. Photo by Jeff Scheid.