Marijuana Business Magazine October 2018

MARKET AT A GLANCE Main measure Question 2 Year passed 2016 MMJ business regulations The Department of Taxation regulates the cultivation, manufacturing, testing, transport and sales of marijuana. Recently finalized requirements pertain to recordkeeping, tracking, packaging, labeling, security, inventory controls and zon- ing, among other things. Marijuana business owners also will be subject to back- ground checks before a license is granted. State tax requirements A 15% excise tax is applied to the first wholesale sale; the tax structure also includes a 6.85% sales tax and an additional 10% retail excise tax on adult-use sales. Sampling of state licensing & application fees Application All applicants for a marijuana establishment license are required to pay a one-time application fee of $5,000. License Retail Marijuana Store: $20,000 (new), $6,600 (renewal) Marijuana Cultivation Facility: $30,000 (new), $10,000 (renewal) Marijuana Product Manufacturing Facility: $10,000 (new), $3,300 (renewal) Marijuana Distributor: $15,000 (new), $5,000 (renewal) Marijuana Testing Facility: $15,000 (new), $5,000 (renewal) What to watch • Regulators expect to open applications for existing medical marijuana license holders to apply for any type and number of adult-use licenses this fall. This period of exclusivity ends Nov. 16, and any person can apply for any type of recreational business license – regardless of their previous involvement in the MMJ industry. There are currently 61 licensed adult-use retailers in the state, with a statewide cap set at 132. No caps are placed on the number of licensed cultivators and processors allowed to operate in Nevada. • Las Vegas city officials are working on regulations to allow public consump- tion lounges, which could be enacted before the end of the year. Marijuana consumption is illegal essentially everywhere in Las Vegas except for private residences, so the move has the potential to boost sales even more. Nevada With sales of recreational cannabis expected to eclipse $450 million in the program’s first year, Nevada’s adult-use market has shattered expectations. By comparison, Colorado and Washington state brought in approximately $300 million and $180 million, respectively, in the first year of rec sales. Nevada’s hot start is attributed to a successful early start program, which allowed licensed dispensaries to sell recreational marijuana while final rules for the adult-use program were being ironed out. Additionally, a robust tourist market in the state welcomes more than 40 million visitors to Las Vegas annually. Las Vegas attracts 40 million visitors annually to Nevada. Photo by Wasin Pummarin For information about cannabis regulations in other markets, order the Marijuana Business Factbook 2018 at October 2018 • Marijuana Business Magazine • 117