CARSON CITY — Preliminary estimates suggest that Nevada’s medical marijuana program could generate as much as $10 million in excise taxes to the public schools in the upcoming two-year budget.
The estimate, which does not include potential revenue from out-of-state residents who might purchase the product while visiting Nevada, was provided Friday to the state Economic Forum.
Nevada’s law does allow individuals in medical marijuana programs in other states to use Nevada’s dispensaries when they visit. The presentation included information showing that California, who comprised 33 percent of visitors to Las Vegas in 2013, has 77,000 medical marijuana patient cardholders.
“We don’t know what the reciprocity piece will be when the dispensaries actually open up,” said Steve Gilbert, program manager for the medical marijuana program overseen by the Nevada Division of Public and Behavioral Health.
The estimate of about $4 million in excise taxes in fiscal year 2016 and $6 million in 2017 is based on several assumptions.
One is the number of Nevada residents who will purchase the product at a licensed medical marijuana dispensary. There are 6,500 patients currently who have a state-issued medical marijuana card. That number is expected to grow steadily and reach 21,102 by July 1, 2017, as dispensaries offering the drug open in urban areas around the state.
Adding in the potential maximum purchase of 2.5 ounces of marijuana every two weeks, and a price estimated at $200 an ounce, and the agency produced its rough estimates.
“The numbers that we have provided in this presentation today, we understand are extremely rough,” said Laura Freed, deputy administrator of the agency. “And they will probably change as we discuss the factors that go into the guesstimate of the excise tax. There are so many unknowns as we roll out this program.”
Legislation creating the program established a 2 percent excise tax on the wholesale sale of marijuana, and another 2 percent on retail sales.
Twenty-five percent of the excise taxes will go to operate the program. The other 75 percent, which in this estimate would total $7.5 million, will go to fund public education.
Retail customers will also pay sales tax on their purchases, a separate calculation that has not yet been projected.
Gilbert said the state will being issuing its provision licenses for labs, cultivation facilities and dispensaries early next month. Local governments will then go through the zoning and licensing processes for the establishments to open for business.
It could be early next year before dispensaries actually open for business around Nevada.
The Economic Forum, which is charged with predicting tax revenue for the state budget, will not be involved in the excise tax estimates for medical marijuana. The tax revenue will not flow to the general fund and so is not within the panel’s purview.
Contact Capital Bureau reporter Sean Whaley at email@example.com or 775-687-3900. Find him on Twitter: @seanw801