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Nevada bill to allow medical pot tax collection draws no opposition

CARSON CITY — No opposition was raised Tuesday during a hearing on a bill that would allow the state Department of Taxation to move forward with the collection of excise taxes on the sale of medical marijuana.

Assembly Bill 70, heard by the Assembly Taxation Committee, outlines the procedures that would be used by the agency to collect the tax, issue any refunds or perform audits.

Deonne Contine, executive director of the agency, said the bill is needed because the 2 percent tax on wholesale sales and a separate 2 percent tax on the retail sales of medical marijuana at licensed dispensaries was added late in the 2013 session and so the Tax Department did not have a chance to include language needed for the collection of the tax.

She described the measure as more of a “cleanup” bill so the agency can perform its collection duties.

The committee did not take immediate action on the legislation.

The dispensaries were authorized by the 2013 legislation sponsored by Sen. Tick Segerblom, D-Las Vegas, but no dispensaries are operating yet as those granted licenses go through the local government zoning processes in communities around the state.

Kiera Sears, representing Black Rock Nutraceuticals, testified in support of the bill, saying the company supports the use of the taxes collected to support public education. Seventy-five percent of the revenue will go directly to the public schools. The other 25 percent will be used by the state to operate the medical marijuana program.

“It is our goal as a participant in this industry to create and maintain conservative legislation moving forward, so that Nevada may one day become a leader for the rest of the country — that the action we take here in this session may serve as a template that both future states and the federal government may feel confident in following,” she said.

The committee did not address the current status of the program or the amount of revenue that might be generated once the dispensaries, cultivation facilities and related businesses begin operating.

Preliminary estimates made in October by the Nevada Division of Public and Behavioral Health suggested that Nevada’s medical marijuana program could generate as much as $10 million in excise taxes in the upcoming two-year budget. The estimate does not include potential revenue from out-of-state residents who might purchase the product while visiting Nevada. California, which comprised 33 percent of visitors to Las Vegas in 2013, has 77,000 medical marijuana patient cardholders.

Assumptions used in the estimate suggest that the number of Nevadans using medical marijuana will reach 21,102 by July 1, 2017. There were 8,575 patient cardholders as of January, with 6,195 of those in Clark County.

The revenue assumption is also based on a potential maximum purchase of 2.5 ounces of marijuana every two weeks with a price estimated at $200 an ounce.

Contact Sean Whaley at swhaley@reviewjournal.com or 775-687-3900. Find him on Twitter: @seanw801.

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