The Great Nevada Cannabis Shortage has already begun.
That’s right, it took less than two weeks for the dispensaries to run through their existing inventory, and now the “Great Nevada Cannabis Shortage” has begun. Yes, we’re kind of poking fun at all of this, but it’s definitely no laughing matter for dispensaries or the tax man.
Nevada, a crazy place on the average Monday in July, has found itself in a bit of a jam… the gears aren’t turning on their own, and it’s up to the governor, Brian Sandoval, to help set things right again.
If you’re not familiar with the current Nevada laws regarding adult usage sales, it’s like a big Vegas show, full of dancers and singers and naked ladies and slot machines and, oh, sorry, I didn’t mean to get carried away to quite that degree. But it does all boil down to money, just like everything in Nevada seems to do.
How did the Nevada cannabis shortage get so far, so fast?
A judge interpreted the ballot initiative and subsequent regulations to mean that for the first 18 months of adult sales, liquor distributors are the only ones that can move marijuana from the grower to the dispensary – something that makes about as much sense as forcing people to pay two union guys $75 each per hour for a minimum of 2 hours to walk a box of flyers from your van to your trade show booth.
Why does it make no sense? For starters, there are a number of dispensaries that grow on property. So what are they supposed to do – hire a liquor distributor to hand carry the dope from the grow area to the sales area? Seriously? That’s a jacked up set of rules.
Next up on the nonsensical ideas situation is the fact that liquor distributors are operating with federal licenses, and we all know that the current regime isn’t exactly MMJ friendly, much less adult use approving. So pretty much none of the liquor distributors filed the paperwork that would enable them to become marijuana distributors (probably a smart idea if you think about it), yet the Independent Alcohol Distributors of Nevada went so far back in March as to file a claim with a judge and get some injunctive relief, disallowing others (more qualified and less risk averse) to become distributors.
The state plowed ahead with the plan to make July 1, 2017, the big day for adult use sales, and prior to that, every ounce of flower that could be stockpiled by the medical dispensaries that could sell adult use (most, but not all) was loaded up in the back rooms, ready to eek its way onto the sales floor… for about 15 minutes or so, judging from the sales figures.
The high demand resulted in about $3 million in sales revenue and $500,000 in tax revenue within the first four days of the recreational program’s launch, according to the Nevada Dispensary Association.
Yep, that’s right. Half a million bucks in tax revenues in four days. Go figure.
So now the state finds itself between a rock and a hard place. If the dispensaries run out of product, they’ll have to close. If the growers can’t move the product to the dispensaries, they risk losing the crop to any number of bad things like mildew, bugs, heat exhaustion or whatever.
What’s it going to take to fix this mess?
Interesting question, and one that could have a variety of answers. Sandoval has declared a state of emergency, and that may have some bearing on how things progress. Here are a couple of the options, as we see it:
- Liquor distributors relent on court ruling, with promises of greater windfalls down the road. They don’t transport any dope any time soon, but dispensaries get refills and sales go forward.
- Liquor distributors refuse to budge, following the lead of countless labor unions operating in the area, and the state finds a way to sidestep them; they don’t get anything but the right to tell their grandkids how they blew it years from now. Dispensaries get product, sales go forward.
- Crazy judge (possibly paid off by liquor distributors) decides to force the issue with the state and stops cannabis sales entirely – although that would be tough, since it appears that the usual supply chain for medical patients remains intact. There are dispensaries that haven’t started selling adult use, and those should be unaffected for medical clients. (Or not, it is Nevada, after all)
- Federal government steps in and does something. What, when, how, is completely unknown, but since the exalted AG is basically operating unsupervised at the moment, and well under the radar, it would not be surprising to see him rolling ATF and the DEA (along with Russian reinforcements, of course) onto the Strip in armored vehicles and shutting down Sin City in its entirety.
That last option doesn’t sound good.
If there’s anything that conservative Christians hate more than marijuana smoke, it’s people having a good time whilst blowing their money on Pai Gow and hookers.
It’s only been a couple of weeks since Wynn kicked the CEO of MassRoots out of the casino and told him to take his filthy drug money somewhere else to gamble. So it’s clear that there are at least a few folks in town who do believe that maybe there will be some federal intervention and their casino licenses could be at risk, if they know they’re taking non-CIA generated dope money for the aforementioned Pai Gow…
We’ll keep you updated as the situation unfolds. Currently there’s a meeting scheduled for Thursday (which will probably be past by the time you read this article), and it’s very likely that the first salvo across the bow will be tossed by then, unless a judge steps in and speeds things along. Or the troops are deployed, long shot but these days, who knows?
Marketing your business is critical to growing your business and mobile is the most effective way to manage your campaigns. It’s also the cheapest and takes the least amount of your time. If you’re interested in banking services and consulting, head over here for that info.