Nevada Sold $692 Million In Legal Cannabis Last Year. What Happens In 2020?
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Nevada sold $692 million in legal taxable cannabis last year.
Nevada Cannabis Industry 2020 Economic Impact Report just released by the state's Dispensary Association shows a 20 percent sales increase from 2018. It also shows that the state collected a total of $172 million in excise tax, sales tax, and licensing fees from the industry.
While this is great news, the stark reality of travel restrictions during the COVID-19 pandemic will alter projections for the future. Modest sales projections for the year 2024 hoped Nevada's collection of excise tax, sales, tax, and licensing fees would be as high as $237 million with total sales at $956 million.
“Although COVID-19 may result in lower than projected sales and collections, it is helpful to know what the industry is capable of accomplishing and contributing to the state, given the right conditions,” Riana Durrett says, executive director of the NDA.
Data companies in the industry including BDS Analytics recorded a sales spike as consumers stockpiled products in March, but then consumers pulled back in late March and early April, with sales hovering on or below average. The loss was especially apparent in tourist-reliant markets, the main two being Colorado and Nevada. These two states have crafted an ecosystem based on cannabis tourism that will be hard to replicate with just local consumers. But still, remaining open and deemed essential offers hope to these realities.
“Unlike other industries, supply and demand in the cannabis industry is less of a factor than regulatory conditions,” says John Restrepo, the economist who helped NDA prepare the report.
“The cannabis industry can be greatly impacted by the tax and licensing structure and the illegal market, and missteps in overtaxing or overregulation can drive people into the illegal market and reduce tax revenue, unlike many other industries.”