Las Vegas police say one suspect is ‘down’ after shooting at country music festival that has left at least two people dead and dozens wounded. Authorities don’t believe there are any more shooters. (Oct. 2)
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RENO, Nev. — The first month of legal sales of recreational marijuana in Nevada significantly outpaced the opening month of sales in other states where it’s legal for adult use.
The state Department of Taxation says Nevada dispensaries sold $27.1 million worth of pot in July. That compares with about $14 million in each of Oregon and Colorado, and $3.8 million in Washington in the first year of legalized recreational sales in those states.
The combination of a 15 percent wholesale tax and a 10 percent retail tax generated $3.68 million in state tax revenue, Nevada Department of Taxation spokeswoman Stephanie Klapstein said Thursday. The numbers are consistent with projections legal pot sales will bring in $120 million over the next two years, she said.
Some of that tax money is headed to the state’s rainy day fund this year. But the vast majority going forward is dedicated to schools.
The $120 million projection anticipates $5 million in monthly tax revenue. But Klapstein said officials actually projected zero revenue for July because of uncertainty surrounding licensing and local zoning ordinances.
“I’d discourage anyone from dividing up the total projections by month,” Klapstein said. “The numbers are good. There’s nothing to suggest we are not on track with the biennial projections.”
The ballot measure Nevada voters approved last November legalizing pot required retail, wholesale and distribution licenses to be issued by Jan. 1, 2018.
But Gov. Brian Sandoval proposed in January — and the Nevada Legislature approved — an “early-start” program to launch sales in July, the first month of the state’s fiscal year.
“That allowed us to start getting the revenue right at the beginning of the biennium,” Klapstein said. “We think those wholesale numbers will continue to go up.”
The state has now licensed 53 retail stores, 92 cultivation operations, 65 manufacturers, nine testing labs and 31 distributors. Four-fifths of the 250 total license facilities are in Las Vegas and surrounding Clark County, the department said.
The Carson City code allowing retail marijuana stores could be adopted on Thursday by the Board of Supervisors.
The board will hear on second reading two ordinances relating to recreational marijuana businesses.
One ordinance covers zoning and would allow retail stores as a conditional use within general commercial and general industrial zones. The stores must also be co-located with a medical marijuana dispensary. Carson City decided to limit dispensaries to two — currently RISE and Sierra Wellness Connection — so retail outlets will be limited as well.
Other types of recreational marijuana businesses, such as cultivators and production facilities, will be allowed in general industrial and general industrial airport zones if the ordinance is adopted.
So will distributors after the board at its last meeting decided not to grandfather in Paladin, a marijuana distribution business set up by Kurt Brown, manager and owner of the liquor distributor, Capitol Beverages.
The business is currently located in a limited industrial zone, which the board has decided can’t be used by marijuana distributors.
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The supervisors also will hear on first reading an ordinance to raise storm water rates 30 percent.
If approved on second reading, the money raised would go to service debt on a $4.88 million bond, which will be used to pay for six, citywide storm water capital improvement projects.
The board will decide whether to approve a grant application to the U.S. Department of Transportation for Transportation Investment Generating Economic Recovery (TIGER) funds.
Public Works hopes to use TIGER money to fund redevelopment of Carson Street between Fairview Drive and 5th Street.
That portion of Carson Street is the unfunded piece between the already completed downtown and the section between Fairview Drive and the freeway bypass the city took over from the state.
Work on the recently acquired south portion is being funded mostly by $5.1 million the city received from the Nevada Department of Transportation as part of the deal to take over the road.
The Board of Supervisors meets at 8:30 a.m. in the Sierra Room, Carson City Community Center, 851 E. William St.
If You Go
What: Board of Supervisors
When: Thursday, Oct. 5, 8:30 a.m.
Where: Sierra Room, Community Center, 851 E. William St.
When the Nevada Legislature legalized gaming in 1931, the publisher of the Nevada State Journal called the act, “legalized liberality.” The small railroad stop of Las Vegas issued its first gaming license to a woman named, “Mayme Stocker.” A true pioneer, Ms. Stocker ran the Northern Club along Fremont Street, which had been operating in a gray legal area by offering patrons games of chance and alcohol in violation of federal law. When the Nevada Legislature legalized gaming in 1931, the publisher of the Nevada State Journal called the act, “legalized liberality.” The small railroad stop of Las Vegas issued its first gaming license to a woman named, “Mayme Stocker.” A true pioneer, Ms. Stocker ran the Northern Club along Fremont Street, which had been operating in a gray legal area by offering patrons games of chance and alcohol in violation of federal law.
The railroads frowned upon their workers patronizing a speakeasy-like the Northern Club. It was no accident that Mayme held the Northern Club in her name—her husband, Frank, was a railroad executive who could have lost his job for his association with such vices. Four generations later, this “legalized liberality” is, of course, Nevada’s number one industry.
Nevada’s present experience with marijuana parallels its past experience with gaming. Like Mayme Stocker, many of Nevada’s cannabis entrepreneurs have operated in a gray area of legitimacy for years, and the stigma of the plant remains.
Nothing illustrates this stigma more clearly than the results of Ballot Question 2 in 2016, which legalized recreational marijuana use in Nevada. Though it won the popular vote, Question 2 passed in only three counties: Clark, Washoe, and Storey. Similar to gambling in 1931, marijuana sharply divides political opinion in 2017. But also like the monumental legalization of gaming in 1931, the passage of Question 2 will someday be seen as equally monumental in Nevada history.
The year since Question 2 has seen some remarkable events.
In July 2017, for example, sales of recreational cannabis began. In those first, few heady days, lines extended out the doors of dispensaries and in some cases, around the block. National news blared, “Nevada Governor Declares Pot Emergency,” when the Governor authorized emergency regulations as inventories ran low in the wake of a failed lawsuit to block distribution of product during the implementation of the temporary program. The permanent program goes into effect in January 2018.
When permanent retail marijuana sales begin, estimates for the size of the market vary widely from $400 million per year to $2 billion per year. These numbers are easy to imagine with a quick, back-of-the-napkin calculation: Roughly 50 million people visit Nevada every year. The National Institutes of Health reports “Past Year Marijuana Use” for adults over 26 was 10.4%. Thus, roughly 5 million visitors are potential customers. If 5 million visitors spent $100 on one transaction, the market is $500 million on tourist sales alone if this long-term trend holds true.
But we are seeing some short-term trends, too. Three seems to be emerging:
- Publicly-Traded Investments. Over the summer of 2017, we have seen a trend toward publicly-traded Canadian companies investing in Nevada marijuana establishments. Regulated by a provincial securities commissions and typically listed on the Canadian Stock Exchange, these investors are showing no signs of stopping.
- Tighter Regulatory Control. In the medical marijuana program, the Division of Public and Behavioral Health did an admirable job of regulating licensed establishments, balancing the needs of an infant-industry with Nevada’s strict regulatory requirements. Now that the regulation of marijuana establishments (both medical and adult-use) is under the jurisdiction of the Department of Taxation, we expect to see regulators enforcing the rules even more robustly in this maturing industry, including monetary fines for violations.
- More Entrepreneurial Opportunities. The marijuana industry has attracted an amazing number of entrepreneurs directly in the industry. But there are also seemingly endless opportunities indirectly or around the industry: security services, lighting companies, delivery services, tourism, software development, payment systems, ventilation and odor control, and mobile applications are just a few of the fertile fields surrounding the marijuana industry. We expect this trend to continue as the industry matures.
Four generations ago, no one could have imagined the revolution that Mayme Stocker’s first gaming license spawned. Here is to hoping that four generations from today, Nevada’s experience with marijuana generates a similarly unimaginable revolution.
Alicia Ashcraft, Managing Partner & Jeffrey Barr, Partner, Ashcraft & Barr, LLP.