Startup funding advances for Nevada medical marijuana dispensaries

CARSON CITY — Nevada’s medical marijuana dispensary program got a major boost Tuesday when a state board approved more than half a million dollars for the state Tax Department to implement tax collection efforts on the sale of the drug next year.

The state Board of Examiners, including Gov. Brian Sandoval, approved the $529,000 funding request by the agency.

The request now goes to the Legislature’s Interim Finance Committee on Aug. 29.

A dispensary law passed in the 2013 legislative session and sales will begin next year.

Sandoval and other members of the board voiced no objections to the request.

The medical marijuana dispensary bill signed into law by Sandoval in June imposes a 2 percent excise tax on both the wholesale and retail sale of medicinal marijuana and related products that will be collected by the Tax Department. Buyers will also pay sales tax on their purchases.

Chris Nielsen, executive director of the Tax Department, said most of the cost to start the collection process involves one-time changes to its tax system at a cost of $496,000. The agency also is seeking ongoing funding of about $52,000 a year to hire a new tax examiner, he said.

Nielsen told the board that the agency did not initially have a fiscal concern with the bill, which was sought by Sen. Tick Segerblom, D-Las Vegas. But late in the legislative process the excise tax was added, creating the cost to the agency, he said.

Three-quarters of the revenue collected from the excise tax will be deposited in the state school fund, while 25 percent will pay for the costs of the program operated by the Nevada Division of Public and Behavioral Health.

The health agency has until April 1 to craft regulations to allow the creation of up to 40 medical marijuana dispensaries in Clark County and smaller numbers in other counties.

Contact Capital Bureau reporter Sean Whaley at swhaley@reviewjournal.com or 775-687-3900.