Nevada Goes Rec
Nevada has faced some recent issues with the implementation of their recreational marijuana market. Medicinal cannabis has been available in Nevada, but the state also passed a measure for the implementation of a recreational market, which opened up in the state on July 1st of 2017. Poor planning and tight restrictions, however, have led the recreational market to overwhelm the limited infrastructure that was put in place, severely limiting access to legal cannabis. In short, Nevada ran out of cannabis.
Nevada was the fifth state to open a recreational cannabis market and their laws stipulate that adults over the age of 21 can buy and possess up to an ounce of cannabis flower or 1/8 ounce of concentrated cannabis products. Recreational cannabis consumers have flooded Nevada’s limited marketplace, leading to a doubling in prices. Las Vegas dispensaries alone have seen a 1000% increase in sales since the recreational market opened in the state. In addition, under the new system the cost of cannabis has become prohibitive for many consumers, leading them to seek out their medication on the black market.
Cannabis is Not the Alcohol Industry
So why did Nevada run out of cannabis? The Nevada system has been set up to mimic the alcohol industry forcing retailers to use distributors from the liquor industry. Distributors are required to get specific licenses in order to distribute cannabis, and at the time of recreational legalization there were not enough distributors for the amount of retailers to meet consumer demand. This meant that when the recreational market opened up, most cannabis dispensaries were only able to sell the products they currently had in stock, leading to limited supplies and higher prices.
State officials have taken action against this shortage in cannabis products by quickly coming together to change existing regulations. The shortage forces the issue of people returning to the black market in order to access cannabis at all, as well as at a lower price. The prospect of consumers being forced to go to illegal sources leaves them at risk for receiving contaminated cannabis products as well as leaving tax dollars on the table, which politicians do not want.
'Statement of Emergency'
Governor Brian Sandoval issued a ‘statement of emergency’ (different from a state of emergency), in order to change regulations with the intent to help increase the amount of cannabis going to the 47 retail locations around the state. It has also led to the issue of two new distribution licenses in order to help increase the amount of cannabis going into dispensaries.
There is also a consideration in the state to expedite even more licenses for distribution in order to meet the public's demand. The state must also consider that a large amount of the excess demand is caused by tourism in the state. 63% of recreational sales in Nevada are expected to be from tourists, particularly in Las Vegas.
One of the largest issues facing the state now is how to get more cannabis into the marketplace, which is greatly limited by the inability to bring cannabis in from other states. Since cannabis is still nationally illegal, cannabis can not be imported from states like California, which has very favorable growing conditions for cannabis with a large potential to export cannabis if legally allowed. National restrictions, however prevent cannabis from crossing borders, even between two states who have legalized the product. So, for now, Nevada will have to find another way to bring more cannabis into their dispensaries.
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