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Political Eye: Marijuana could equal tax revenue for Nevada

http://www.reviewjournal.com/politics/political-eye-marijuana-could-equal-tax-revenue-nevada


LAS VEGAS REVIEW-JOURNAL

There could be gold in cannabis in terms of tax revenue if Nevada voters in 2016 ultimately approve the recreational use of marijuana for adults, based on estimates for Oregon and Alaska.

Estimates made by Arcview Market Research’s team for the two states, which passed marijuana legalization initiatives Nov. 4, show projected first-year retail sales of nearly $200 million in Oregon, which has a population of 3.9 million.

Projected excise tax revenue is $20 million, with total demand estimated at 158,897 pounds.

The Oregon Market Potential, defined as the market’s value if 100 percent of all current demand for cannabis went to the legal regulated market, is estimated at $569 million.

For Alaska, with about 750,000 residents, first-year retail sales are estimated at nearly $80 million with excise tax revenue of $10 million. Total demand is estimated at 40,928 pounds with the market potential estimated at $187 million.

Backers of a proposal to legalize the recreational use of marijuana in Nevada turned in nearly 200,000 signatures Wednesday to get the proposal on the 2016 ballot. The process of checking the signatures to make sure there are enough to qualify the measure is now underway.

The Nevada Legislature will get the first crack at the proposal in the 2015 session if it qualifies. If lawmakers fail to act, voters will decide in about two years’ time.

The Oregon and Alaska projections are based on estimated existing demand from marijuana consumers, new marijuana consumer demand and demand from out-of-state visitors.

Oregon adult-use stores will enter a highly competitive market with established retail competition from Washington State, existing medical marijuana stores in Oregon and cheap black-market supply from Northern California, the Arcview report says.

The Alaska market has less overall demand but also less competition from legal sources, leading to more demand being met by adult-use stores. Market prices will be higher because of geography and limited alternative supply.

ArcView Market Research says it has been producing the definitive market data and analysis for the cannabis industry since 2011.

— Sean Whaley

— Las Vegas Review-Journal