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Nevada Marijuana Shortage: State Choices Lead to Emergency

Nevada governor Brian Sandoval issued a state of emergency for medical marijuana July 12, because the state’s dispensaries are already running short of supplies following legal sales of recreational marijuana. The Nevada Tax Commission is meeting today to discuss alternatives to the supply system. Currently, only wholesalers who also have Nevada liquor distribution licenses are allowed to deliver marijuana to the dispensaries. They aren’t able to handle the volume.

Las Vegas Strip Branch of Essence Medical Marijuana Dispensary
Essence Dispensary Vegas Strip Branch, one of nearly 40 dispensaries in the city.

The majority of Nevada’s 47 dispensaries are located in Las Vegas, where the first full weekend of legal recreational marijuana sales in Nevada totaling more than 40,000 individual transactions. Seven current liquor distributors applied for licenses to deliver marijuana, but hadn’t met the criteria for a license as of July 5th. Nevada’s taxation department executive director Deonne Contine said “Unless the issue with distributor licensing is resolved quickly, the inability to deliver product to the retail stores will result in many of these employees losing their jobs and will cause this nascent industry to grind to a halt.”

Nevada’s taxation department projects receiving at least $100 million in additional tax revenue from sales of legal marijuana over the next ten years.

Because it’s Las Vegas, the dispensaries are easily accessible and upscale in appearance. Leafly lists numerous Vegas-based dispensaries near the Strip.

Nevada made medical marijuana legal back in 2000, but dispensaries didn’t begin to open in Las Vegas until 2015. Local regulations were so strict that some of the dispensaries offering recreational marijuana starting over the July 4th holiday weekend were struggling to reach medical marijuana patients. The city now hopes to become a destination for marijuana tourism in addition to the other vices for which Vegas is world-renowned.

Joe Brezny, an official with the Nevada Cannabis Industry Association, told the International Business Times in 2015 that Vegas was a “city where people come to let their hair down and have fun. I cannot imagine a better match for cannabis tourism.” He added, “we regulate vice quite well here.”

But Nevada Governor Sandoval is reacting appropriately to the situation. Everyone knew that recreational sales would go through the roof once the dispensaries were able to open to recreational customers.

Recreational Marijuana Costs Less than Medical Cannabis

Recreational marijuana currently costs 32% more than medical marijuana in Clark County, and the products are not the same. Most recreational users are looking to get high, and based on what one dispensary owner reported to us, “The recreational isn’t the same quality and will always cost more.” Few recreational customers are going to be interested in CBD, which produces no psychoactive effects, or many medical marijuana strains and products designed to help patients with serious health needs.

As one example of why Sandoval and Nevada’s state officials want to act quickly: recreational enthusiasts have fulfilled and exceeded the hopes of state taxation officials and dispensary owners. But people with terminal cancer who use medical cannabis so they can eat enough to survive really do need the very real medication and health benefits. We hope they’ll figure out a way to get recreational products to the dispensaries as soon as possible.