It looks like they’re running out of weed faster than they’re running out of water in the desert. Nevada Governor Brian Sandoval has declared a “state of emergency” over a pot shortage, which began just a week after the state’s adult use marijuana program went into effect.
While voters approved legalizing weed in November, the industry didn’t open up until July 1. In the first weekend alone, it brought in more than $3 million, according to the Nevada Dispensary Association. Even though dispensaries stocked up in advance, they hadn’t foreseen that there would be this much demand. Some say they sold twice as much weed as they had estimated.
Today, the Nevada Tax Commission is deciding on emergency provisions, which would entail distributing more licenses.
“Based on reports of adult-use marijuana sales already far exceeding the industry’s expectations at the state’s 47 licensed retail marijuana stores, and the reality that many stores are running out of inventory, the Department must address the lack of distributors immediately,” the Nevada Tax Commission said in a statement.
According to the agency, unless the distributor licensing issue gets resolved quickly, the current distributors’ inability to meet demand could result in people losing their jobs and bringing Nevada’s nascent legal weed industry to a sudden hiatus. “A halt in this market will lead to a hole in the state’s school budget,” the Nevada Tax Commission stated.
The new regulations could also instigate a battle between the state of Nevada and its liquor industry, which has already sued for the right to sell weed. According to the Nevada Tax Commission, most liquor wholesalers don’t meet the licensing requirements to sell weed.
“Right now, only companies that are also licensed to distribute liquor in Nevada are able to bring marijuana to dispensaries,” according to NPR’s Casey Morell. “The dispensaries say that’s why they’re running out of the drug.” Currently, 47 shops in Nevada are licensed to sell weed. In that first weekend, they made more than 40,000 retail transactions. Now they need new weed to restock their shelves. While at least seven wholesale liquor dealers have applied to become marijuana distributors, they’ve so far been deemed unqualified.
The state expects cannabis sales to generate at least $100 million in revenue over the next two years, but new regulations need to be implemented as soon as possible. Otherwise, as Deonne Contine, executive director of the state’s Taxation Department, warns, customers could revert to the black market and the industry could collapse.
