Nevada leaders look to Oregon for insights on recreational marijuana

Mon, Dec 5, 2016 (2 a.m.)

PORTLAND, ORE. — “I wish we would have taken some of the steps your state has taken; we’d be so much further along,” Oregon State Sen. Ginny Burdick said to a group of Nevada lawmakers and business owners during a recent fact-finding tour of Portland’s recreational marijuana industry. “Nevada really has been a model example of how this can be done fairly and precisely.”

Burdick was referring to Nevada’s flourishing medical marijuana program, featuring some of the nation’s strictest testing standards and a seed-to-sale regulation system that tracks a marijuana plant from the time it’s grown at a cultivation facility to its sale. The same framework could be applied to recreational marijuana, which Nevadans voted to legalize on Nov. 8. Adults 21 and older will be able to purchase up to an ounce of marijuana flower or up to an eighth of an ounce of concentrates per visit for recreational use. Dispensaries won’t have the appropriate licenses until July 1, 2017, at the earliest, so until then, there will be no place to legally buy.

Oregon had the same issue after broadly legalizing pot in June 2015. The Oregon Health Authority began an “early start” program, allowing existing facilities to sell small amounts of lower-grade marijuana for recreational use, just three months after the law was passed. Successes and problems followed.

More than 100 new marijuana retailers have opened in Oregon since the recreational program launched, bringing the total to 446. The increase in demand and supply helped the state raise $54 million in taxes from Jan. 1 of this year through Oct. 1, according to Oregon Liquor Control Commission economist Bill Schuette.

But such competition forced some dispensaries to change hands and drove others out of business, said Burdick and Portland-based Pure Green Marijuana Dispensary owner Matt Walstatter. Until Oct. 1, the state’s minimal testing standards allowed cheaper, lower-grade strains to enter the legal recreational market, so businesses took a huge hit when their product didn’t pass new, tightened regulations. As a result, some dispensaries have warned customers that the marijuana they’re purchasing doesn’t meet state standards.

“We’re in a really challenging time here in Oregon for a number of reasons,” said Walstatter, who has been growing and selling marijuana under the medical marijuana program since the early 2000s. “The rules as they exist are incredibly cumbersome.”

With a limited number of licenses, a baseline for marijuana quality and a plan to sell recreational marijuana at the same grade as medical, Nevada is “ahead of the curve,” Burdick said to the tour group, which included State Sens. Tick Segerblom, Patricia Farley, Pat Spearman and David Parks and Assemblyman-elect Steve Yeager. Burdick advised the legislators to keep the tax rate “fair” — no more than 25 percent — to avoid allowing black-market sellers dealing at a lower price a chance to creep back into Nevada’s marijuana market.

“I think everything is in line for your state to succeed,” Burdick said.

Buying medical

• Oregon: Up to 24 ounces per visit or up to 1 ounce of concentrates or the equivalent strength in infused edibles.

• Nevada: Up to 1 ounce per visit or up to an eighth of an ounce of concentrates or the equivalent strength in infused edibles.

Taxing medical

• Oregon: There is no sales tax on medical marijuana in Oregon.

• Nevada: In the Las Vegas Valley, the total tax can be up to 17.15 percent (2 percent excise tax to the state and 8.15 percent sales tax to Clark County, and either an additional 3 percent excise tax to Clark County or 5 percent municipal tax to Henderson or 5-7 percent municipal tax to the city of Las Vegas). That has brought in about $125,000 in tax revenue a month, according to 2016 stats from the Nevada Department of Taxation.

Buying recreational

• Oregon: Up to a quarter of an ounce per visit or up to 5 grams of concentrates or the equivalent strength in infused edibles. That will change Jan. 1, allowing the purchase of up to 1 ounce of marijuana per visit or up to half an ounce of concentrates or edibles.

• Nevada: Up to 1 ounce per visit or up to an eighth of an ounce of concentrates or the equivalent strength in infused edibles.

Taxing recreational

• Oregon: 25 percent sales tax, though it will dip to between 17 and 20 percent on Jan. 1.

• Nevada: Same sales tax as medical, but dispensary owners will be subject to a 15 percent excise tax on wholesale purchases, according to Nevada Dispensary Association President Andrew Jolley, and likely will pass some costs onto customers.


• Oregon: Recreational marijuana is sold at a lower grade than medical marijuana, with some products failing state testing.

• Nevada: Recreational marijuana will be sold at the same grade and be subject to the same testing as medical marijuana.

Tax revenue

• Oregon: $54 million just from sales of marijuana flower for recreational use from January to October of this year. (That number is expected to dip to as low as $35 million when the sales tax is lowered.)

• Nevada: $116 million annually, according to projection statistics from Las Vegas-based RCG Economics.

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