Illegal marijuana taking a big bite out of Nevada tax revenue, school funding

Yahoo

26-02-2025

LAS VEGAS (KLAS) — The illicit market for cannabis in Nevada has grown to a $242 million business, taking a bite out of the state's effort to profit from the legalization of marijuana.
During a wide-ranging presentation to the Nevada Legislature on Tuesday, the state's Cannabis Compliance Board (CCB) noted declining revenues, a national trend that followed an initial surge in cannabis use during the COVID-19 pandemic. Taxable sales have fallen from $965 million in fiscal year 2022 to just over $829 million in fiscal 2024.
That means tax money for schools is also on the decline. Taxes fell by about $32 million over that same period, a drop of about 21%.
Lawmakers wanted to know more about illegal sales and what is being done to shut them down.
'It's in the open. I mean its deliveries are in the open, the advertising is in the open. What has to happen to shut that down?' Republican Sen. John Steinbeck, who represents the northwest Las Vegas valley. 'It's definitely out of control.'
CCB Executive Director James Humm and his staff said the enforcement falls under several state agencies. When legal marijuana is growing, it's under the Department of Agriculture. As a consumable, the Nevada Department of Health and Human Services oversees regulation. There are also business licensing regulators involved.
'We have also heard complaints of delivery to the Strip properties, to the hotels and casinos where licensees are not able to deliver. I feel like that is a big competitor,' Kara Cronkhite, CCB's chief of health and safety, told the Nevada Legislature's Senate Committee on Revenue and Economic Development.
'And additionally, high-potency CBD products that have THC in them, hemp-derived products that are extremely potent are also readily available online and in smoke shops and other types of facilities around town,' Cronkhite said.
Humm cited the growing presence of intoxicating hemp products, synthetics, and delta-8 THC, which are showing up for sale in smoke shops and gas stations.
Democratic Sen. Fabian Doñate asked if the board needed to be given authority to go after illegal operations.
'Happy to contemplate that,' Humm said, but there is no legislation this session that would change that aspect of enforcement.
Doñate also pressed CCB officials on what they could do to increase sales, but the board is just following laws set up under previous legislation. Some of the avenues for restaurants, spa businesses and events are allowed, but there are currently only two consumption lounges licensed by the state in Clark County.
Laws currently prohibit retail sale of cannabis products except in licensed dispensaries or lounges. Consumption in public is prohibited, but public use outdoors is widespread. Doñate asked about legalizing it at events, and CCB staff explained that would only be legal at the actual site of a lounge. But Doñate had bigger ideas, hinting that the Electric Daisy Carnival might present an opportunity. That would require the Las Vegas Motor Speedway to be a licensed retailer.
'I would like to talk offline on how we could fix that,' Doñate said.
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