The state of Nevada legalized recreational cannabis, allowing adults over the age of 21 to possess up to an ounce of cannabis. A 10 percent state sales tax was added to all purchases, and after Nevada’s Department of Taxation drafted the paperwork all was well until cannabis began to run out because of massive unexpected demand during the first weekend of sales, which started July 1, 2017.
Cannabis is still illegal in The United States of America, according to the federal government. This means that Nevada can’t call California on the phone, explain that there’s a shortage and request enough to maintain supply. If that happened, the Drug Enforcement Agency would step in to stop it from happening, since federal law still says selling cannabis and/or transporting it across state lines is illegal.
“We’re looking at starting production of cannabis and extracts this coming October. Once we are fully operational in our planned 330,000 square foot facility, I don’t think other manufacturers will stand a chance.”
One positive side effect of the shortage is that the state’s Tax Commission unanimously voted to permit the Department of Taxation to allow more people to have licenses to sell cannabis across the state, although alcohol distributors still want exclusive rights to cannabis sales in Nevada. They intend to challenge the decision, so we’ll see what happens next.
While the state has taken emergency measures to handle the shortage and prevent future supply issues, business entities have stepped in to offer other solutions. Since the ratio of permitted cannabis cultivators to dispensaries is much lower in Nevada than it is in states with successful recreational cannabis programs like Colorado, allowing more cultivators appears to be the perfect solution.
mCig, Inc., is one such company that will come to Nevada’s recreational industry’s rescue, and the company has big plans to help supply the demand in Nevada by building a massive grow facility in the desert with the help of Scalable Solutions, Inc. (a subsidiary of mCig, Inc.) in partnership with another construction corporation called Solaris. Robert Kressa, CEO of Grow Contractors (another mCig subsidiary) is positive about the future.
“Dispensaries are currently running on fumes and are having issues keeping their buyers happy while the state figures out how to get their buddies paid.”
The new facility is going to be big. “We’re looking at starting production of cannabis and extracts this coming October.” Kressa said. “Once we are fully operational in our planned 330,000 square-foot facility, I don’t think other manufacturers will stand a chance. The only niche that can survive against such a powerhouse would be indoor grown, boutique, artisan, hand-crafted products.” The benefit to consumers is that this new facility will drive down costs on cannabis and cannabis products, which face local and state taxes that are up to 38 percent. The new facility ” . . . will drop the price of greenhouse products by 30-40 percent, and these price-drops will be passed onto the consumer, so they can expect to see cheaper product on dispensary shelves,” Kressa noted.
It should be finished by mid-October, with the first crop out by January. “The cannabis community is not happy about this. Many other legal states are managing to handle delivery of product without so much bureaucracy. Nevada is definitely not shipping in legal medical cannabis from other states,” Kressa said. “Accepting product from an outside state would be a huge legal issue which would hurt the overall movement. The feds would jump all over it.”
To Krass, the state prioritized making money instead of helping people, and that was a mistake. “They need cannabis experts to operate the front-end of the business, while the liquor guys simply take a cut for having a liquor license. Dispensaries are currently running on fumes and are having issues keeping their buyers happy while the state figures out how to get their buddies paid.”